Restoration Hardware Holdings Inc (NYSE:RH) posted 26% sequential earnings growth for 4Q13 yesterday, a 23% increase over 4Q2012, with GAAP net revenues up 18%, beating the already high expectations as one of the few US retailers showing significant growth. Restoration Hardware’s stock price jumped from $63 to $70 following the news, compared to a $72 price target set by Goldman Sachs analyst Matthew Fassler just ahead of earnings.

Restoration Hardware Holdings

2013 net revenues up 33%

Operating income was up 41% year-on-year, increasing from $41.4 million in 4Q12 to $58.3 million in 4Q13, and adjusted net income increased 52% on a comparable week basis to $34 million. Diluted EPS increased 38% to $0.83, while GAAP diluted earnings per share jumped to $0.65 compared to a loss of $0.79 in 4Q12.

Full year 2013 earnings were just as impressive, with net revenues increasing 33%, beating the high standard of 22% growth that Restoration Hardware Holdings Inc (NYSE:RH) set in 2012. Operating income was up 76% in 2013, hitting $120.9 million, while GAAP operating income went from a $69 million loss in 2012 to a $54.9 million increase in 2013. Adjusted net income nearly doubled, increasing 92% in 2013, while GAAP net income was an $18.2 million gain in 2013 as opposed to a $12.8 million loss in 2012. Diluted EPS was up 76%, reaching $1.71, and GAAP diluted EPS went from a $1.36 loss in 2012 to a positive $0.45 in 2013.

“Throughout fiscal 2013, we continued to take market share and outperform our expectations,” wrote Restoration Hardware Holdings Inc (NYSE:RH) chairman and CEO Gary Friedman, explaining that the company is still looking to expand. “We believe we have a $4 to $5 billion Company trapped in billion dollar legacy real estate… This year, we will open new Galleries in Greenwich, Los Angeles, and our first next generation Full Line Design Gallery in Atlanta.”

Restoration Hardware has generated interest from hedge funds

Restoration Hardware Holdings Inc (NYSE:RH) attracted a lot of interest from top hedge funds at the end of last year. George Soros and Tiger Global are just two examples of companies that expected to see outsized returns from the company, even though its share price has had a rocky couple of months. While it’s still down from the mid-$70s in late November, Restoration Hardware has seen its stock price double since this time last year. It went public in late 2012 in a well-received IPO that saw its shares jump from the IPO price of $24 to more than $30 by the time the market closed.