Growth accelerating at Restoration Hardware
An astonishing 41% first quarter same store sales increase at Restoration Hardware propelled the company to significantly improved profitability and made the specialty retailer an increasingly desirable tenant.
Sales increased 38% to $301 million from $218 million for the first quarter of fiscal 2012 and that allowed the company to reverse a prior year loss. Operating income adjusted to exclude certain non-recurring expenses, was $4.6 million during the first quarter versus a prior year loss of $600,000. Net income on an adjusted basis was $2.3 million compared to a prior year loss of $1.3 million.
Restoration Hardware CEO Carlos Alberini said he was extremely pleased with the performance and that the company was receiving overwhelming support and interest from the landlord community with offers for leases with more favorable terms that are typically available only to anchor tenants in several of the most prestigious shopping centers in North America.
"We believe that over time, these new deals will enable us to deliver higher sales and increased earnings, reduce our capital investment, and achieve higher ROIC," Alberini said. "We now see opportunities to have Full Line Design Galleries in more than the approximately 50 markets we previously identified and are currently in lease discussions for over 30 locations in North America, including New York, Chicago, Miami, Denver, Nashville, New Orleans and San Diego, among many others."
As of May 4, the Company operated a total of 70 retail stores, consisting of 62 Galleries, 5 Full Line Design Galleries and 3 Baby & Child Galleries, as well as 14 outlet stores throughout the United States and Canada.
Later this year, the company plans to launch two new catalogs, RH Leather and RH Rugs that will include expanded and dominant collections presented in a dramatic and innovative context, according to the company. Those catalogs are in addition to a previously announced Contemporary Art catalog. The company is also announced the launch of two new businesses called RH Kitchen and Tableware and RH Antiquities.
"RH Kitchen and Tableware provides another logical opportunity for growth as we expand beyond our initial tableware offering and create a curated collection of kitchen furniture, appliances, lighting, cookware, tools, and food," said Gary Friedman, the company’s chairman Emeritus, creator and curator. "RH Antiquities will provide an opportunity to fill current customer demand with a curated collection of antiques as we enter this $25 billion highly fragmented market. These new businesses will further enhance our brand position and provide meaningful long-term growth opportunities."
The company’s optimistic outlook prompted it to increase its full year sales forecast to a range of $1.47 billion to $1.51 billion and adjusted net income in the range of $55.8 million to $58.2 million.