RH is looking into a $ 300 million notes offering to pay down debt

RH, formerly known as Restoration Hardware, announced Thursday it is considering a $ 300 million convertible notes offering due in 2024.

RH said in a press release, the proceeds of the offering would be primarily $ 200 million from second lien debt and reduce outstanding borrowings from its credit facility. The move was $ 6.5 million in the back half of fiscal 2019, and about $ 18 million on an annual basis.

If it goes through the offering, it will boost its earnings between 20 cents and 25 cents per share this year and between 65 cents and 70 cents per share in fiscal 2020.

RH reported second-quarter earnings that beat expectations. It earned $ 3.20 per share, excluding items, on revenue of $ 707 million, topping estimates of $ 2.70 per share on $ 697.8 million in revenue.

In the report, the company hinted that even though it is comfortable with its balance sheet, market conditions for convertible debt seemed attractive to them.

RH Beach House, a collection of coastal living furnishings. Its gallery in New York, which opened in 2018, has continued to "exceed $ 30 million in annual revenue for fiscal 2019 and $ 30 million in its first full fiscal year," it said.

The company said it's on its way to its mansion-like, multi-story galleries with restaurants and rooftop parks in locations including Minneapolis, Columbus, Ohio, and Edina, Minnesota by the end of the year.

Prior to be halted for Thursday, RH shares hit at 52-week high. The stock briefly pared its earnings when trading resumed, but shares are up about 3% in midday trading. Its stock is up 44% since the beginning of the year, bringing it to a market cap of $ 3.2 billion.