MILAN — Shares of RH, formerly known as Restoration Hardware, surged 17 percent on the New York Stock Exchange after the California-based luxury home goods retailer raised its full-year guidance and returned to profit in the third quarter.

The company’s confident outlook sent RH shares soaring more than 17 percent in Friday trading, outperforming the NYSE index, which traded down 0.17 percent midday.

More from WWD

• Robert Wilson to Design Salone del Mobile.Milano Centerpiece Around Michelangelo's Last Pietà

• Elie Saab to Open First Branded Hotel in the Swiss Alps

• Salon Art + Design Executive Director Eyeing New Destinations as Fair Expands to Dallas

On Thursday, RH reported swung to a net profit $33.2 million, or $1.66 a share, for the three months ended Nov. 2, compared with a loss of $2.2 million, or 12 cents a share a year earlier. Revenues rose 8.1 percent to $811.7 million in the third quarter.

It also raised guidance for the fourth quarter, forecasting growth in demand of 22 percent, up from a previous estimate of 20 percent. Revenue is expected to grow 20 percent versus a previous forecast of 18 percent growth. Operating margin is expected at 13.2 percent versus 12.2 percent and adjusted EBITDA margin is now seen at 19 percent versus a previous forecast of 18 percent.

“The positive inflection of our business continued to gain momentum with third quarter demand increasing 13 percent despite operating in the worst housing market in 30 years,” the company said in a statement.

During the conference call RH chief executive officer Gary Friedman highlighted plans to enlarge the company’s assortment and also hinted at altering its pricing strategy.

“And we talk about where is their leverage, where scale can create better margin, better pricing, more disruptive pricing, and so on and so forth. I think right now is that it is a better time to invest in disruptive pricing and disable competitors than it is to harvest the business and take lower sales,” he said, adding that competitors are mulling diverse strategies. “Different people are taking different paths. Some people are…giving up market share, not trying to take market share, and they’re harvesting, right? We could do that too,” he added.

In a report released Friday, TD Cowen kept its buy rating following the third-quarter conference call, raising their target price to $500 from $380, noting Friedman’s comments on disruptive prices were promising.

“Coming to the market with disruptive prices to in turn take market share from struggling peers. The view is that this strategy will be rewarded on the other side once demand comes back as RH will be in a significantly stronger market position with significant operational leverage. Despite the pivot, RH is expanding product margins as its scale and relationships with vendors are resulting in good margins even at lower price points,” the report said.