Restoration Hardware Goes from Loss to Profit in Q1
CORTE MADERA, Calif.-Strong gains in revenues, especially on a comparable-brand basis, led Restoration Hardware from red ink to black ink on its bottom line for the first quarter, which ended on May 3.
Net income for the quarter totaled $1.8 million, compared to a net loss of $161,000 for last year's first quarter. Net revenues reached $366.3 million, up 21.5 percent. Comparable-brand revenues jumped 18 percent.
Gary Friedman, Restoration Hardware's chairman and CEO, noted that this quarter's gains came on top of increases of 38 percent in net revenues and 39 percent in comparable-brand growth in last year's first quarter--"representing an industry-leading 57 percent increase (in comparable-brand revenues) over the two-year period," Friedman said.
Gross margin edged up 20 basis points to 34 percent. Selling, general and administrative expenses rose 18 percent in dollars but were down 90 basis points as a percentage of sales, to 32.7 percent.
Friedman said Restoration Hardware now expects net revenues for the fiscal year as a whole to finish up 20 to 22 percent. "The business momentum and strong trends we are seeing thus far in 2014 give us further confidence in our financial outlook for the year," he said.