Restoration Hardware Holdings Inc. (RH) Wednesday reported a profit for the third quarter, compared with a loss last year, as the home furnishings retailer benefited from strong growth in revenues as well as absence of one-time charges recorded in the year-ago period. The company's quarterly earnings and revenues came in above Street estimates.
Restoration Hardware, which made its debut on the NYSE last month, sells furniture, bath linen, and other items through its stores and website. The company competes with retailers such as Williams Sonoma Inc (WSM) and Ethan Allen Interiors Inc.(ETH).
The company's revenues for the quarter rose 22 percent to $284 million from $233 million in the prior year. Analysts expected revenues of $282.39 million.
On a same-store basis, sales were up 29 percent.
The Corte Madera, California-based company reported third-quarter net income of $1.7 million, compared with net loss of $4.8 million last year.
Results for the prior year included non-cash compensation expense of $6 million.
Excluding items, adjusted earnings for the quarter were $2.7 million or $0.07 per share for the quarter.
On average, six analysts polled by Thomson Reuters expected earnings of $.04 per share for the quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter contracted to about 36 percent from 36.6 percent in the prior year.
The company said it is in the early stages of transforming its legacy mall real estate into new full line Design Gallery concept. It plans to open new full line Design Galleries in Boston, Indianapolis, Greenwich and Atlanta and is scouting for locations in other key markets. At the end of the quarter, the company operated a total of 73 retail stores, compared with 84 retail stores in the prior year.
Restoration Hardware made its debut on the NYSE on November 2, 2012, with its stock priced at $24. It reported solid gains on the first day of trading itself. On Wednesday, the stock closed at $36.64, up 1.61%. In after hours, the stock gained 0.84%.
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