Restoration Hardware Sees Explosive Growth and So Will Share Prices

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Source: Thinkstock

Source: Thinkstock

Restoration Hardware Holdings Inc.’s (NYSE:RH) stock has done well in the last few years, but is set to rocket much higher on the back of incredible earnings and a strong outlook. Just how good was the report?

Restoration Hardware is primarily is involved in the retail of home furnishings. Its product categories include furniture, lighting, textiles, bathware, decor, outdoor and garden, tableware, and children’s furnishings. The company sells its products through its stores and catalogs, as well as through its websites, such as restorationhardware.com, rh.com, and rhbabyandchild.com. It operates approximately seventy retail stores consisting of galleries, full line design galleries, and baby and child galleries, as well as outlet stores in the United States and Canada.

The report was quite impressive. Adjusted diluted earnings per share increased 200 percent to $0.18. It saw GAAP diluted earnings per share of $0.04 compared to break-even for the same period last year. Net revenues increased 22 percent to $366.3 million from $301.3 million in the first quarter of fiscal 2013. Comparable brand revenue growth, which includes direct, increased 18 percent year-over-year on top of a 39 percent increase last year. Direct revenues increased 24 percent to $176.4 million for the first quarter of fiscal 2014.

This growth is on top of a 38 percent increase in direct revenues for the first quarter of fiscal 2013. Adjusted operating income increased 204 percent to $14.0 million compared to $4.6 last year. The company’s GAAP operating income was $4.8 million compared to $0.5 million for the prior-year period. Adjusted net income increased 217 percent to $7.2 million from $2.3 million last year. GAAP net income during the first quarter of fiscal 2014 was $1.8 million compared to a net loss of $0.2 million for the prior year period. Adjusted diluted earnings per share increased 200 percent to $0.18 from $0.06 during the prior year period.

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