Two Earnings Reports, Two Stocks Heading In Vastly Different Directions

Moving on to Restoration Hardware Holdings Inc (NYSE:RH), the firm surpassed Wall Street’s revenue estimates with reported revenues of $506.9 million for its fiscal second quarter, ended on August 1, against estimates of $503 million, posting 17% year-over-year (YOY) growth. Its earnings per share of $0.85 beat the market expectations by $0.01 and amounted to 27% YOY growth. On the back of its strong second quarter results, the company’s management upgraded its revenue estimates for fiscal year 2015 to lie between $2.16 billion and $2.18 billion, compared to previous guidance of between $2.15 billion and $2.18 billion. Restoration Hardware Holdings Inc (NYSE:RH) increased it EPS guidance for fiscal 2015 to lie between $3.06 and $3.16 in comparison with previous EPS guidance of $3.02 to $3.15.

On top of these quarterly results, Restoration Hardware announced the launch of multiple business units, starting in September with the launch of RH Modern and RH Teen, along with its individual source book, website, and retail presence. RH Teen will include modern furniture options suited for the taste of teenagers. The company is planning the launch of four next generation Design Galleries in Chicago, Denver, Tampa, and Austin, followed by RH Modern in Los Angeles, among other new units. Restoration Hardware Holdings Inc (NYSE:RH) will launch these new business in the third and fourth quarter of 2015. The company is expecting higher growth figures fueled by these launches in fiscal year 2016.

The hedge funds that we track at Insider Monkey held 23.40% of the available common shares of Restoration Hardware Holdings Inc (NYSE:RH) at the end of the second quarter, indicating huge interest in the company. The number of hedge funds holding positions was up by six to 41 hedgies, having aggregate holdings worth $914.26 million. The aggregate holdings declined by 4.80%, while the shares of Restoration Hardware dropped by 1.57% during the second quarter. Tiger Global Management LLC, led by Chase Coleman, and Miura Global Management, led by Richard Tumure and Pasco Alfaro, held large stakes in Restoration Hardware Holdings Inc (NYSE:RH) of 3.19 million shares and 1.12 million shares, respectively.

Disclosure: None