RH shares skyrocketed on Tuesday after the luxury home goods retailer reported first-quarter earnings well-above estimates and raised its forecast for the year.

Shares rose more than 28 percent, putting it on pace for its best day since Nov. 16, 2017.

RH was formerly known as Restoration Hardware and has recently shifted its brand to the higher end of the home furnishings marketplace. It also is focusing on a membership model and made changes to its supply chain this quarter. The better-than-expected performance is likely increasing confidence in the company’s new model.

In the latest quarter, the Corte Madera, California-based company reported net income of $28.1 million, or $1.11 per share, up from a loss of $3.4 million, or 9 cents a share, a year ago.

Excluding items, the company earned $1.33 per share, beating analyst estimates of $1.02 per share from a Thomson Reuters survey.

Still, the company’s revenue fell slightly from the year-ago period, to $557.4 million, and was shy of estimates of $563.1 million.

Despite weak revenue, RH raised its full-year adjusted earnings forecast to a range of $6.34 to $6.83 per share and reiterated its revenue forecast of between $2.53 billion to $2.57 billion.

In the second quarter, the retailer expects to earn between $1.70 and $1.77 per share on an adjusted basis, surpassing analysts’ forecast of $1.51 per share.

The company recently opened a flagship location in West Palm Beach, Florida, that shows off its new approach. The 80,000-square-foot space includes fountains and an in-store cafe.

RH shares have been on the rise, gaining 76 percent since the start of the year. On Monday, shares traded as high as $152.94.

Source: Investment Cnbc
Restoration Hardware-owner shares soar on signs its shift to luxury is working