RH (NYSE:) posted blowout earnings for its first quarter as income rose 11% and gross margins elevated sharply.

The designer furnishings retailer’s adjusted web revenue rose 59% to $7.78 per share, versus the consensus of $5.38. was $957 million, versus the consensus of $924.81 million. The was up 11% from final yr and 98% from 2020.

Gross margin elevated 480 foundation factors within the quarter to 52.1%. This was pushed by a 390 foundation level improve in product margins and the agency’s resistance to advertise the enterprise as demand traits started to gradual.

“Whereas there was a widespread return to discounting throughout our trade as evidenced by the barrage of sale emails filling our inboxes, and there could also be short-term danger of market share loss by selecting to not promote, we consider there’s sure long-term danger of name erosion and mannequin destruction as soon as you start down that path,” the corporate stated in a letter to shareholders.

Whereas the primary quarter was robust, the corporate is seeing softening demand traits and consequently, is revising its second quarter and monetary 2022 steering.

RH sees second-quarter web income within the vary of (1%) to (3%). They see Fiscal 2022 web income development within the vary of 0% to 2%.

Shares of RH fell 2% after-hours.