Restoration Hardware RH shares are trading higher by $4.11 (11 percent) at $42.11 in Wednesday's session.
The rally is coming after the company reported Q4 adjusted EPS of $0.68, which didn't compare to the $0.05 estimate. Sales came in higher than expected by just over $100 million. The company forecasts Q1 sales to be up 16-20 percent.
The report has caught the 40 percent short interest in the issue completely off guard and shorts are scrambling to cover in today's session.
After a higher open, RH rallied to $44.00 before reversing course, which matches its May 2, 2016 high. The ensuing decline has taken the issue to $41.57 and is now trying to remain in the $42.00 handle.
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