Damian Dovarganes | AP
A shopper checks a price at a Restoration Hardware store in Pasadena, California.
Shares of Restoration Hardware closed more than 24 percent higher Friday, after the company's preliminary fourth-quarter results beat expectations.
The upscale home goods company also authorized a $300 million share repurchase program.
Shares of Restoration Hardware hit an all-time low earlier this month, following removal from Goldman Sach's "conviction buy list" in January and a downgrade by Buckingham Research on Feb. 7.
Short interest in the stock, or bets that it will fall, were a high 40.9 percent of shares available for trading, according to FactSet data from Thursday. When traders rush to cover shorts, or buy back shares, that leads to a short squeeze that sends shares higher.
One-year RH performance
On Thursday, the California-based company reported unaudited adjusted earnings of 68 cents a share for the quarter, topping a Thomson Reuters consensus estimate of 65 cents. Quarterly sales also beat forecasts, coming in an $587 million versus a $583.5 million Reuters estimate.
Companies can issue preliminary financial statements at any given time, to indicate their fiscal health ahead of an official audit or official earnings release.
"We expect sales to re-accelerate, operating margins to expand, and to generate free cash flow in 2017," CEO Gary Friedman said in a release.
With Friday's gains, the stock is up about 2 percent for the year. In the last 12 months, though, shares have dropped more than 39 percent.