What happened Luxury furniture retailer RH (NYSE: RH) reported blockbuster first-quarter earnings last night, and the stock is reflecting the financial update. As of 11:45 a.m. EDT, shares in the company formerly known as Restoration Hardware had surged more than 14%. So what As the economy rebounds, consumers continue to spend on home furnishings at the high-end retailer. Net revenue increased 78% while diluted earnings per share of $4.89 beat analyst predictions and represented a 285% increase versus the year-ago period. RH also raised its fiscal 2021 outlook on the strong results. Image source: Getty Images. Now what The significant gain in bottom-line profit came as the company increased its adjusted operating margin to 22.6%. That's a jump of 1,260 basis points versus the 10% rate in the prior year period. The results prompted RH to raise its year-over-year revenue growth estimate for fiscal 2021 to a midpoint of 27.5% compared to the previous outlook of 17.5%. It also bumped up its outlook for gains in adjusted operating margin. RH chairman and CEO Gary Friedman attributes the strong results to pent-up demand in the housing and renovation markets. On the investor conference call, he added, "the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance." Friedman also said he believes the RH brand could command a valuation of $20 billion to $25 billion "and possibly larger if aspects of our ecosystem become meaningful revenue streams." If that prediction comes true, it would give owners of the almost $15 billion market cap company additional strong returns. 10 stocks we like better than RHWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and RH wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 7, 2021 Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends RH. The Motley Fool has a disclosure policy.Source