Restoration Hardware 4Q results beat expectations

Restoration Hardware results beat expectations in first post-IPO quarter, stock jumps

Associated Press

CORTE MADERA, Calif. (AP) -- Home products chain Restoration Hardware Holdings Inc. reported a loss for the fourth quarter, hurt by costs related to its initial public offering.

But its adjusted results beat expectations and the company gave better-than-expected guidance. Its shares jumped nearly 8 percent in aftermarket trading.

The company, which went public in November 2012, has rebranded itself as RH and is focusing on high-end furnishings rather than its Americana, nostalgia-based roots.

Based in Corte Madera, Calif., Restoration Hardware is several years into a turnaround. Restoration Hardware was losing money when it was bought by a private equity firm in in 2008. It has since redesigned stores, revamped its product line and focused on a higher-end market.

Company CEO Carlos Alberini said the company's results show the turnaround is paying off.

"We are well positioned to continue to gain market share and further disrupt the highly fragmented home furnishings marketplace," he said.

He said new collections and finishes in furniture, lighting and textiles, as well as a larger baby-and-child offering, drove results.

Restoration Hardware reported a loss of $28.4 million, or 79 cents per share in the three months ending Feb. 2, compared with net income of $24 million in the prior year. Excluding one-time items, net income totaled 64 cents per share, 2 cents higher than analyst expectations, according to FactSet.

Revenue rose 30 percent to $398.1 million from $305.2 million last year. Analysts expected net income of $390.5 million. Revenue in stores open at least one year rose 26 percent. The measure is a key gauge of a retailer's financial health because it excludes stores that open or close during the day.

For the year, net loss totaled $12.8 million, or $1.36 per share, from net income of $20.6 million in the prior year. Revenue rose 25 percent to $1.19 billion from $958.1 million.

Looking forward, the company expects a loss of 2 cents per share to break even per share on revenue of $280 million to $285 million in its first quarter. Analysts expect a loss of 5 cents per share on revenue of $253.2 million.

For the year, the company expects net income of $1.29 to $1.37 per share on revenue of $1.42 billion to $1.45 billion. Analysts expect net income of $1.26 per share on revenue of $1.38 billion.

Restoration Hardware's stock rose $2.49 to $35.24 in aftermarket trading following the release of the earnings report. They ended the regular trading session down 5 percent at $32.75.

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