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Larry Thomas

Restoration Hardware revenues jump 30.4% in quarter

CORTE MADERA, Calif. — Restoration Hardware said revenues shot up 30.4% in the quarter ended Feb. 2, but the retailer recorded a net loss of $28.4 million due largely to expenses from its November public stock offering.

Revenues for the 14-week quarter totaled $398.1 million, up from $305.2 million in the comparable 13-week quarter from the previous year. Excluding the extra week in the most recent quarter, revenues were up about 24%.

The company said nearly half its revenues came from catalog and e-commerce sales, but said it remains committed to brick-and-mortar stores through its new Full Line Design Gallery format.

Three of its 71 retail stores currently have the new format, and the company said it is in "active lease discussions" to open Full Line Design Gallery stores in more than 20 markets.

"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," said Carlos Alberini, CEO. "We are in the early stages of this transformation."

The most recent quarter's net loss, which equals 79 cents per share, compares with net income of $24.1 million in the same quarter the previous year, when the company was still private and didn't report comparable per-share figures.

Restoration Hardware said its adjusted net income, which excludes IPO expenses and certain other one-time costs, rose 24% to $24.2 million, or 64 cents per share.

For the 53-week fiscal year ended Feb. 2, revenues rose 24.5% to $1.19 billion. Excluding the extra week, revenues were up 22%, the retailer said.

Net loss for the fiscal year totaled $12.8 million, or $1.36 per share. In the previous year, the company had net income of $20.6 million.

"We are well positioned to continue to gain market share and further disrupt the highly fragmented home furnishings marketplace," Alberini said. "We have a powerful business model, have made investments to support future growth, and remain confident that we will continue to drive operating margin expansion in the future."

For the current fiscal year, which ends Feb. 1, 2014, the retailer is projecting revenues of $1.42 billion to $1.45 billion. It forecast earnings per share of $1.29 to $1.37.

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