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Larry Thomas

Restoration Hardware revenues soar 39%

Corte Madera, Calif. - Driven by 29% same-store sales growth and a 47% increase in its catalog and Internet business, Restoration Hardware posted record earnings and revenues for the quarter ended Nov. 2.
     The company said revenues for the quarter totaled $395.8 million, up 39.3% from $284.2 million in the same quarter last year, while net income jumped to $9.55 million or 23 cents per share.
     In the same quarter a year ago, net income was $1.69 million. Restoration Hardware went public on Nov. 7, 2012, and earnings per share would have been 5 cents per share had it been public for the entire comparable period.
     "We are pleased to report another quarter of record financial results," said Gary Friedman, chairman and CEO. "Our exclusive products, dominant assortments, taste and style continue to resonate with consumers across all channels."
     Noting that 46% of the company's revenues came from catalog and Internet sales during the quarter, he said the recent revamping of its Source Book catalog proved to be a big hit with consumers.
     "We believe that the significant growth in our direct (to consumer) and total business provides the initial data points demonstrating that the most recent evolution of our Source Book strategy was a highly profitable decision," Friedman said.
     Revenues for the nine months ended Nov. 2 totaled $1.08 billion, up 35.8% from the first nine months of the previous fiscal year.
     The retailer reported a nine month net loss of $8.45 million or 22 cents per share. In the comparable period, it showed a profit of $15.6 million.
     Restoration Hardware also boosted its sales and earnings projections for the fiscal year ending Feb. 1. It now projects revenues of $1.57 billion to $1.58 billion and adjusted earnings per share of $1.71 to $1.74.
     Those are slightly above September projections of revenues of $1.56 billion to $1.58 billion and adjusted earnings per share of $1.65 to $1.70.

RESTORATION HARDWARE

Earnings per share are fully diluted, and all figures in parentheses are losses or declines.

Quarter ended 11/2

2013
2012

Change

Revenues

$395,832,000
$284,171,000
39.3%

Operating income

23,860,000
1,994,000
1096.6%

Net income

9,549,000
1,685,000
466.7%

Earnings per share (a)

0.23
NA
--

9 months ended 11/2

Revenues

$1,079,267,000
$794,991,000
35.8%

Operating income

(3,409,000)
19,559,000
--

Net income

(8,447,000)
15,573,000
--

Earnings per share (a)

(0.22)
NA
--

(a) Company went public Nov. 7, 2012. Earnings per share not available for prior years

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