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Cost Plus, Restoration post solid 4Q, year sales gains

Janice Chamberlain -- Furniture Today, April 10, 2005

Oakland, Calif. — Cost Plus World Market, based here, and fellow specialty retailer Restoration Hardware posted solid revenue gains in their fourth quarters and years ended Jan. 29, with Cost Plus's fourth-quarter revenues up 9.7% and Restoration's sales growing 13.9%.

For the year, sales gains were 13.3% for Cost Plus and 19.9% for Corte Madera, Calif.-based Restoration.

Fourth-quarter sales came to $342.9 million for Cost Plus, despite a same-store sales decrease of 1.3%.

Restoration increased revenues to $187.9 million from $165 million a year ago, including a 5.7% same-store sales gain.

For the 2004 fiscal year, Cost Plus reported sales of $908.6 million, with a 0.9% same-store sales improvement, and Restoration Hardware had a same-store sales gain of 7.8% and total revenues of $525.8 million.

Cost Plus posted fourth-quarter net income of $23.5 million, down 12.2% from earnings of $26.7 million in the year-earlier period. Annual net profits for Cost Plus were $30.2 million, down 7.5% from the previous year.

Restoration's net earnings in the latest quarter skyrocketed 32.7% to $10.6 million from $8 million a year ago. For 2004, the specialty retailer recorded net income of $1.7 million, compared with a net loss of $2.5 million in 2003.

Both retailers restated 2003 results to correct their lease-accounting practices to conform with the latest Securities and Exchange Commission guidelines.

Restoration Hardware President, CEO and Acting Chairman Gary Friedman said the company was pleased to report its "first full year of profitability since 1998, the year in which the company went public. While this is a key milestone, it merely represents the first of many important steps to transform Restoration Hardware into a high-performance home furnishings brand that will stand the test of time."

Looking ahead, Cost Plus expects 2005 first-quarter sales to grow to between $202 million to $206 million versus $186 million last year. The company expects net income in a range of $800,000 to $1.6 million, and plans to open five stores and close four.

For the full year, Cost Plus anticipates same-store sales growth between 1.5% and 2.3%, with total sales between $1.014 billion and $1.023 billion. Net income is expected to be in a range of $32 million to $34.5 million, measured against the $30.2 million reported in 2004.

Restoration Hardware
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
13 weeks ended 1/29	2005	(a)2004	Change
(a) Restated. (b) Based on average shares outstanding of 38.1 million in the 2005 13 weeks, 37.9 million in the 2004 13 weeks, 38.2 million in the 2005 52 weeks and 30.9 million in the 2004 52 weeks. (c) Includes income tax benefits of $100,000 in the 2005 52 weeks and $1.5 million in the 2004 52 weeks.
Revenues	$187,858,000	$164,955,000	13.9%
Operating income	17,197,000	13,939,000	23.4%
Net income	10,581,000	7,974,000	32.7%
Earnings per share (b)	0.28	0.21	33.3%
52 weeks ended 1/29	2005	(a)2004	Change
Revenues	$525,823,000	$438,508,000	19.9%
Operating income	4,076,000	(1,875,000)	—
Net income (c)	1,704,000	(2,518,000)	—
Earnings per share (b)	0.04	(0.08)	—

Cost Plus World Market
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
Quarter ended 1/29	2005	(a)2004	Change
(a) Restated.
Sales	$342,941,000	$312,569,000	9.7%
Operating income	38,271,000	69,427,000	(44.9%)
Net income	23,456,000	26,725,000	(12.2%)
Earnings per share	1.06	1.18	(10.2%)
Year ended 1/29	2005	(a)2004	Change
Sales	$908,560,000	$801,566,000	13.3%
Operating income	51,428,000	54,324,000	(5.3%)
Net income	30,221,000	32,687,000	(7.5%)
Earnings per share	1.35	1.46	(7.5%)

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