Although Restoration Hardware third-quarter earnings were a bit below analyst expectations, the retailer turned to profit in the period year over year while revenues beat a Wall Street forecast.
Net income was $33.2 million, or $1.66 per diluted share, versus a net loss of $2.2 million, or 12 cents per diluted share, in the year-before quarter. Adjusted for one-time events, the company noted, net income was $49.3 million, or $2.48 per diluted share, compared with a net loss of $7.8 million, or 42 cents per diluted share, in the year-previous period.
Despite the turnaround to profits, RH still came in under a Zacks Investment Research analyst consensus estimate for adjusted diluted earnings per share of $2.67. However, RH surpassed a Zacks revenue estimate of $810.9 million.
Net revenue was $811.7 million versus $751.2 million in the year-earlier quarter, the company reported. Income from operations was $101.5 million versus $51.2 million in the year-prior period.
In a letter accompanying the release of the third quarter financials, Gary Friedman, RH chairman and CEO said, “The positive inflection of our business continued to gain momentum, with third quarter demand increasing 13% despite operating in the worst housing market in 30 years. Our vector is increasing in both magnitude and direction with November demand up 18%, as the most prolific product transformation and platform expansion in the history of our industry continues to unfold. Our industry leading growth is being driven by the RH brand where November demand increased 24% with the introduction of our new RH Modern Sourcebook and has continued to accelerate into December with month to date demand up 30%, demonstrating the disruptive nature of our product transformation.”
He added the company has just opened RH Newport Beach with more than 90,000 square feet of indoor and outdoor space. The location will replace three legacy RH Galleries in the region.
