Credit & Capital

Berkshire Hathaway Buys New Stake in Restoration Hardware

The furniture retailer’s shares are up more than more than 40% already this year.
Lauren MuskettNovember 15, 2019
Berkshire Hathaway Buys New Stake in Restoration Hardware

Berkshire Hathaway, the conglomerate led by Warren Buffet, owned 1.2 million shares in the furniture retailer RH, formerly known as Restoration Hardware, at the end of the third quarter.

RH shares increased more than 5% on Friday. The company’s shares are up more than more than 40% already this year.

Berkshire Hathaway said its stake was worth $206.3 million at the end of September, making it the fourth biggest RH stakeholder. BH made the disclosure in a filing with the Securities and Exchange Commission.

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Restoration Hardware changed its name to RH two years ago as part of an initiative to rebrand itself as a lifestyle company, and it has outperformed earnings expectations this year. The company has opened about 70 expansive museum-style stores, or so-called RH Galleries, and has adopted a membership model.

In September, Restoration Hardware Holdings reported earnings of $3.20 per share, compared with a consensus estimate of $2.7. It also beat the consensus revenue estimates, according to Zacks.

Berkshire Hathaway also owns Nebraska Furniture Mart, RC Willey Home Furnishings, Jordan’s Furniture, and Star Furniture. Its own furniture unit is the seventh-largest in the United States, with estimated sales of $2.1 billion in 2018, according to the trade publication Furniture Today.

Berkshire Hathaway also disclosed a new 7.5 million-share stake in Occidental Petroleum, and it said it sold stakes Apple, Phillips 66, and Wells Fargo. Berkshire Hathaway owns 248 million shares of Apple, valued at about $55.7 billion. The stake in Apple is still BH’s largest investment, despite the cut.

Berkshire Hathaway financed the takeover of Anadarko Petroleum by Occidental last year. The investment firm committed a $10 billion preferred stock investment in Occidental to help finance the Anadarko acquisition. Its new stake was worth about $332 million.

Large positions in Coca-Cola, American Express, Kraft Heinz, and Bank of America were untouched.

Rick Kern/WireImage