Shares of RH, formerly known as Restoration Hardware, soared 23% in premarket trading Thursday after the company crushed earnings expectations and raised its full-year outlook as the brand's turnaround begins to pay off.

The furnishing retailer attributed its performance to its strategy of transforming into a luxury lifestyle brand. RH dropped the "Hardware" from its name and began opening high-end furniture galleries with restaurants. The company also recently debuted RH Beach House, which focuses on outdoor furniture.

RH's stock, which has a market value of $1.9 billion, is down 39% this year.

"We saw our business come back in the second half of the first quarter, and we've also got early indications on RH Beach Houses," CEO Gary Friedman told analysts on the quarterly conference call.

Despite increased tariffs and negative housing trends, the company said it remains optimistic that momentum will continue.

Late Wednesday, the retailer reported fiscal first-quarter adjusted earnings of $1.85 per share, topping analyst estimates of $1.55 per share. RH also reported revenue of $598 million, beating Wall Street's forecasts of $584 million.

RH raised its fiscal 2019 earnings outlook to a range of $8.76 to $9.27 per share from a prior range of $8.05 to $8.69. RH is now also expecting revenue in a range of $2.64 billion to $2.66 billion. The company slashed its forecast last quarter, citing the downturn in the high-end housing market.

RH also said it has hiked prices selectively to mitigate the impact of tariffs on Chinese goods. The company is also moving some production and development out of China.