In the third quarter, Restoration Hardware came up short of analyst earnings estimates, but it forged on, debuting a new location in Metro Detroit.
Net income in the quarter was $36.3 million, or $1.83 per diluted share, versus $33.2 million, or $1.66 per diluted share, in the year-before period. Adjusted for one-time events, net income was $33.9 million, or $1.71 per diluted share, versus $49.3 million, or $2.48 per diluted share, in the year-previous quarter, according to RH.
An analyst consensus estimate from Zacks Investment Research called for earnings per adjusted diluted share of $2.13 and revenues of $883 million.
Net revenues were $883.8 million versus $811.7 million in the year-earlier quarter. Operating income was $105.9 million versus $101.5 million in the period a year prior, while adjusted operating income was $102.6 million versus $121.9 million.
In its fiscal 2025 guidance, RH anticipated revenue growth of 9% to 9.2% and an adjusted operating margin of 11.6% to 11.9% versus a prior outlook for revenue growth of 9% to 11% and an adjusted operating margin of 13% to 14%.
In a letter to shareholders, chairman and CEO Gary Friedman said that, although tariffs have disrupted the market, the company has continued to evolve its strategic initiatives, including a new concept launching in the spring that should have a transformative effect on the business. Although he did not provide details, RH has previously alluded to a new gallery concept it has been developing.
Friedman noted that the new metro Detroit gallery “reflects our ongoing quest to elevate and expand the brand through immersive spaces that activate all of the senses and an experience that cannot be replicated online.”
