Restoration Hardware reported a year-over-year, second-quarter earnings slide on higher revenues with both metrics surpassing Wall Street estimates.
Net income was $29 million, or $1.45 per diluted share, versus $76.5 million, or $3.36 per diluted share, in the year-previous period. Adjusted for one-time events, net income was $33.5 million, or $1.69 per diluted share, versus $88.7 million, or $3.93 per diluted share in the period a year before, the company stated.
RH beat a Zacks Investment Research analyst consensus estimate of $1.53 per adjusted diluted share and a revenue estimate by 0.33%
Net revenues were $829.7 million versus $800.5 million in the year-prior quarter. Income from operations was $96.1 million versus $151.3 million in the year-earlier period.
In a letter to stakeholders, RH Chairman and CEO Gary Friedman said the 90,000-square-foot RH Newport Beach will open in California with four levels of indoor and outdoor space during November, as will RH Raleigh in North Carolina, at 50,000 square feet of indoor and outdoor space over three levels; and the first RH Interior Design Office in Palm Desert, CA. RH Montecito bows in California during early December
Friedman said, “We are pleased to report that demand was up 7% in the second quarter and has continued to inflect positive, gaining momentum each month with July finishing up 10%. Demand accelerated into the third quarter with August up 12% and product margins inflecting positive despite operating in the most challenging housing market in three decades. Our investments in the most prolific product transformation and platform expansion in our history are now resulting in RH gaining significant market share in North America while building the foundation for our long-term global expansion across Europe, Australia and the Middle East over the next decade.
“While our inflection developed a couple of quarters later than expected, we believe the important measure is not the timing, but rather the size of the vector we are creating in comparison to our industry,” Friedman continued. “Vectors are measured in magnitude and direction, and can be effective in forecasting strategic separation and future market share gains. It is now clear that our vector is increasing by both measures as we are outperforming the industry by 15 to 25 points. We expect our performance will continue to gain momentum in the second half of 2024 fueled by our multi-year effort to elevate our product and a multi-decade effort to elevate and expand our platform.”
