Restoration Hardware (RH) Tops Q3 EPS by 1c; Guides In-Line

Restoration Hardware (NYSE: RH) reported Q3 EPS of $0.49, $0.01 better than the analyst estimate of $0.48. Revenue for the quarter came in at $484.7 million versus the consensus estimate of $482 million.

Restoration Hardware sees Q4 2014 EPS of $0.99-$1.01, versus the consensus of $1.00. Restoration Hardware sees Q4 2014 revenue of $575-585 million, versus the consensus of $582.84 million.

Restoration Hardware sees FY2014 EPS of $2.33-$2.35, versus the consensus of $2.33. Restoration Hardware sees FY2014 revenue of $1.86-1.87 billion, versus the consensus of $1.86 billion.

Gary Friedman, Chairman and Chief Executive Officer, commented, “Our ability to curate and integrate new products, categories and businesses, then test and rapidly scale them across our multi-channel platform, is at the core of our ability to gain significant share and outperform our peers in the home furnishings marketplace. In the third quarter, net revenue growth accelerated to 22% on top of a 39% increase last year. Our adjusted net income growth of 56% in the quarter demonstrates the earnings power of our business model, and our team’s drive to deliver industry-leading results.”

Mr. Friedman added, “The business momentum and strong trends we are seeing for the remainder of the year give us further confidence in our financial outlook for fiscal 2014. We are increasing our adjusted EPS guidance to a range of $2.33 to $2.35, and expect to deliver our fifth consecutive year of net revenue growth in excess of 20%.”

Mr. Friedman continued, “We recently introduced the newest physical expressions of our brand, RH West Hollywood - The Gallery on Melrose Avenue, and our first next generation Design Gallery, RH Atlanta - The Gallery at The Estate in Buckhead. Our vision is to create spaces that blur the lines between residential and retail, indoors and outdoors, online and offline, transforming the traditional retail model from a way to shop to inspiring a new way to live. These new galleries feature garden courtyards and loggias, reflecting pools and trickling fountains, conservatories and rooftop parks with stunning views of the Hollywood Hills and Atlanta skyline. The Atlanta Gallery features our first ever retail presentation of RH Small Spaces plus a full floor dedicated to RH Baby & Child. We are extremely pleased with the early performance of these recently opened galleries - and believe that after seeing and experiencing them, one can truly understand the opportunity that lies ahead for RH.”

Mr. Friedman concluded, “Looking forward, we remain focused on our key value driving strategies including the expansion of our product offer, the transformation of our retail stores, and the continued enhancement of our multi-channel platform and operating infrastructure. While still in the early stages of building RH into the leading luxury home brand, we see a clear path toward $4 billion to $5 billion in North American sales, mid-teens operating margin, and significant free cash flow. I would like to thank all of our team members for their commitment to our cause, and our partners and shareholders for your continued support and belief in our brand. We wish all of you a holiday full of hope and happiness.”

For earnings history and earnings-related data on Restoration Hardware (RH) click here.

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