×

Restoration Hardware shares leap more than 11% after earnings beat

Restoration Hardward catalogs on display as print catalogs begin to make a comeback.
Adam Jeffery | CNBC
Restoration Hardward catalogs on display as print catalogs begin to make a comeback.

Shares of Restoration Hardware climbed to near one-year highs Wednesday after the upscale home furnishing company delivered a beat on earnings and sales.

At one point, the stock spiked more than 15 percent to hit a high of $44 a share, its highest since May 2, 2016. By late morning, the price was up more than 11 percent. With the day's moves, shares are up more than 41 percent over the last three months.

"2016 was a year of transformation and transition at RH," CEO Gary Friedman said in a release. "We transformed our business from a promotional to a membership model that we believe will enhance our brand, streamline our operations, and vastly improve the customer experience."

Five-day performance of RH

Source: FactSet

“We also began the redesign of our supply chain network, transitioning inventory into fewer facilities, which enabled us to forgo building a planned distribution center scheduled to open in 2017," Friedman said.

Late Tuesday, the company reported fourth-quarter 2016 adjusted earnings per share of 68 cents, beating the Thomson Reuters consensus estimate of 66 cents. Revenue of $587 million also topped the $585 million estimate.

Goldman Sachs and Telsey Advisory raised their price targets on Restoration Hardware's stock, according to Reuters, which pointed out that the median price target is now $43.