Restoration Hardware exceeds expectations in Q4
Furniture Today Staff -- Furniture Today, April 19, 2013
Corte Madera, Calif. - New collections in textiles, furniture and lighting, coupled with expanded Baby & Child category offerings and the introduction of Small Spaces were all key contributors to Restoration Hardware Holdings Inc.' double-digit net revenues and comps in both the fourth quarter and full fiscal year.
For the fourth quarter, ended February 2, results included: a net revenue increase of 30% to $398.1 million from $305.2 million a year ago; a 26% comp store sales gain; a GAAP net loss of $28.4 million diluted share of $0.79, which the company said was primarily driven by one-time IPO related charges; and a 24% increase in adjusted net income to $24.2 million, with adjusted diluted earnings per share of $0.64 - the latter of which "contributed to the company's best year ever," said Carlos Alberini, ceo, and "our 12th consecutive quarter of double-digit net revenue growth."
For fiscal 2012, results included: a 25% boost in net revenues; a 28% gain in comps; GAAP net loss was $12.8 million and diluted share of $1.36; and an adjusted net income increase of 43% to $37.7 million, with adjusted diluted earnings per share of $1.01.
As it embarks on a new fiscal year, Restoration Hardware is keenly focused on several initiatives, of which real estate is top of mind.
As Alberini explained "The execution of our real estate transformation into our new Full Line Design Gallery concept remains our highest priority and is key to our long term growth strategy."
The company is still in the early stages of this transformation. Its existing Full Line Design Galleries "continue to outperform," he said, "with Los Angeles and Houston delivering store demand growth in excess of 25% since their first anniversary" and the new Full Line Design Gallery in Scottsdale "has delivered store demand growth in excess of 90% since its opening last November."
Most recently, on April 13, the company opened its largest Gallery to date at The Historic Museum of Natural History in Boston.
"This is our best expression of the RH brand to-date and represents the next evolution of our customer experience," Alberini noted.
Going forward, Restoration Hardware plans to open new Full Line Design Galleries in Indianapolis, Greenwich, and Atlanta, and it has identified locations and is in active lease discussions in over 20 markets, including New York, Chicago, Miami, Denver, and San Diego, "to name a few."
Also in the works: This Spring, Restoration Hardware's collection will be presented across six Source Book titles and will total over 1,600 pages.
As Gary Friedman, chairman emeritus, creator and curator, put it: "Our Interiors and Small Spaces Source Books include the addition of new furniture collections and finishes, the expansion and presentation of color across our upholstered furniture and textiles collections, and dramatic new lighting collections highlighted throughout the books. In addition, we are introducing two new businesses this spring -- RH Objects of Curiosity and RH Tableware, which we believe represent significant long-term opportunities for RH."
Restoration Hardware offered the following guidance for the first quarter of fiscal 2013:
--Net revenues in the range of $280 million to $285 million;
--Net income in the range of a loss of $1 million to breakeven;
--Diluted EPS in the range of ($0.02) to breakeven.
For the fiscal year ending February 1, 2014, Restoration Hardware's outlook includes:
-- Net revenues in the range of $1.42 billion to $1.45 billion;
-- Net income in the range of $51 million to $54 million;
-- Diluted EPS in the range of $1.29 to $1.37.
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