In the first quarter, Restoration Hardware posted a net loss and lower revenues, while beating Wall Street forecasts, and introduced new programs that will enhance its offering to consumers and the design trade.
Net loss was $13.7 million, or 73 cents per diluted share, versus net earnings of $8 million, or 40 cents per diluted share, in the year-previous quarter, the company reported. Adjusted for one-time events, net loss was $37.2 million, or $1.97 per diluted share, versus net earnings of $2.6 million, or 13 cents per diluted share in the year-before period.
A Marketbeat analyst consensus estimate called for an adjusted diluted loss per share of $2.13 and revenue of $792.6 million.
Net revenues were $800.3 million versus $814 million in the year-prior quarter, according to RH. Operating income was $34.2 million versus $55.9 million in the year-earlier period.
RH stated that it expects revenue growth of 4.5% to 8% for the current fiscal year and adjusted free cash flow of $300 million to $400 million.
In a letter to stakeholders, Gary Friedman said that RH’s results were hit by tariff-related resourcing costs, which contributed $75 million more to the company’s backlog and special order balances year over year.
Friedman also noted that the company is launching RH Estates, which will update its assortment of classic and traditional merchandise and make products that might otherwise be available only to the design trade accessible to the company’s retail customers. At the same time, RH is rolling out RH Bespoke Furniture and RH Couture Upholstery, which are aimed more at architects and designers and offer customization and sizing capabilities, delivering products made to specifications and even with materials sourced from professionals.
