Revenue grew by 7% to $598.42 million. Net of the about 2 points negative drag from eliminating fringe promotions, adjusted net revenues increased 9.4% in the first quarter fiscal 2019. Revenue growth was driven by its real estate transformation, the elevation, and expansion of its product offering, and investments in RH Interior Design will continue to leverage SG&A and Occupancy costs.
Looking ahead into fiscal 2019, the company lifted its adjusted net revenue outlook to the range of $2.643 billion to $2.663 billion from the prior range of $2.585 billion to $2.635 billion. Adjusted earnings guidance is raised to the range of $8.76 to $9.27 per share from the previous $8.05 to $8.69 per share range.
Adjusted operating income estimates are increased to the range of $332.5 million to $350.5 million from the previous range of $309.4 million to $331.6 million. For fiscal 2019, the adjusted net income forecast is narrowed to the range of $206.2 million to $218.2 million from the prior range of $204 million to $220 million.
Looking forward, the company expects to accelerate its real estate transformation to a rate of 5 to 7 new galleries in fiscal 2020 and a minimum of 7 new galleries in fiscal 2021. RH continues to see a clear path to $4 billion to $5 billion in North America revenues, and an international opportunity that could lead to RH becoming a $7 billion to $10 billion dollar global brand.
The company’s long-term targets are net revenue growth of 8% to 12%, adjusted operating margins in the mid-to-high teens, and adjusted net income growth of 15% to 20% annually. Return on invested capital (ROIC) is predicted to be in excess of 50% for the long term.
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