This excerpt taken from the RSTO 8-K filed May 25, 2006.
Restoration Hardware, Inc. Reports First Quarter Results
Corte Madera, Calif., May 25, 2006 Restoration Hardware, Inc. (NASDAQ: RSTO) today announced its financial results for the first quarter ended April 29, 2006. Earnings were consistent with the Companys guidance issued on March 30, 2006. Results include the following:
First Quarter ended April 29, 2006
Net revenue for the first quarter increased 14 percent to $133.4 million compared to net revenue of $117.5 million for the same period last year.
Comparable store sales increased 4.0 percent for the first quarter against a 5.0 percent increase for the same period last year.
Direct-to-customer revenue increased 29 percent to $42.3 million in the first quarter compared to a 50 percent increase in the same period last year.
Loss from operations improved to $3.5 million for the first quarter compared to a loss from operations of $4.3 million for the same period last year. The loss from operations for the first quarter of fiscal 2006 included a $0.9 million non-cash charge associated with the expensing of stock options as required by SFAS 123R during the quarter.
The net loss for the first quarter was $4.9 million, inclusive of the $0.9 million non-cash charge associated with the expensing of stock options required under SFAS 123R. The fiscal 2006 first quarter results did not include any income tax benefit as a result of the Companys establishment of a valuation allowance against the Companys net deferred tax asset. In the same period last year, the net loss was $3.1 million inclusive of a net $2.1 million tax benefit.
Net loss per share in the first quarter was $0.13. The net loss includes a non-cash charge of approximately $0.02 per share associated with the expensing of stock options required under SFAS 123R. In the same period last year, the loss was $0.09 per share, inclusive of recording a tax benefit of $0.06 per share.
Inventory was $194.6 million at the end of the first quarter compared to $144.2 million in the same period last year due to planned growth and the acceleration of in-transit orders for the second quarter as part of our efforts to improve in-stock positions for seasonal transitions. This has created a variance in the timing comparison of year over year inventory levels at the end of each quarter, but does not effect overall inventory investments for the year. The Company expects to end the year with inventories up 5 to 10 percent year over year versus a sales increase of 18 to 22 percent.
Gary Friedman, the Companys President, Chief Executive Officer and Chairman, stated, We are pleased with our results for the quarter as we significantly improved our operating results year over year. Our direct revenues grew 29 percent in the quarter on top of a 50 percent increase in the same period last year due in part to customer response to our first category extension, the Restoration Hardware outdoor catalog introduced in March. Our retail business delivered a solid 4.0 percent comparable store increase on top of a 5.0 percent increase in the first quarter last year. The 4.0 percent comparable store sales increase was revenue deferral
neutral as the expected pick up in comparable store sales of 2 to 3 percent from a reduction in revenue and order deferral was not realized due to a greater than anticipated revenue deferral at the end of the first quarter due to the strength of our furniture business.
Mr. Friedman continued, Our business continues to be healthy as sales trends accelerate in the second quarter. We expect retail comparable store sales to increase in the mid single-digits versus a 5.6 percent increase last year and direct to customer sales to increase 35-40 percent against a 50 percent increase last year. We remain on-track against our objective of full-year revenue growth of 18 to 22 percent and operating margins of 1.5 percent to 2.0 percent, inclusive of the estimated impact of adopting SFAS 123R.
This excerpt taken from the RSTO 8-K filed Nov 22, 2005.
Restoration Hardware, Inc. Reports Third Quarter Results
Corte Madera, Calif., November 22, 2005 Restoration Hardware, Inc. (Nasdaq: RSTO) today announced its financial results for the third quarter ended October 29, 2005, which are consistent with the Companys prior updated guidance. The Companys financial results included the following:
Net revenue increased 9% to $128.4 million for the third quarter of fiscal 2005 versus net revenue of $118.2 million for the same period last year.
Comparable store sales for the third quarter of fiscal 2005 decreased 2.1% compared to an 8.7% increase in the third quarter of fiscal 2004.
Direct-to-Customer net revenue increased 27% in the third quarter of 2005 on top of a 78% increase in the same period a year ago.
Net results for the third quarter of fiscal 2005 reflected a net loss of $4.2 million ($0.11 per share), compared to a net loss of $3.1 million ($0.09 per share) in the third quarter of the prior year.
Inventory was $164.1 million as of the end of the third quarter, up 4% from the prior years third quarter.
Gary Friedman, the Companys Chairman, President and CEO, stated, While we were disappointed with our sales for the quarter, primarily due to the sales from our Fall Lighting Sale, our fundamental business model continues to improve. Our Upholstered Furniture Event, which occurred earlier in the quarter, performed above plan with a much higher than planned shift to special orders due to the Companys advertised 45 day delivery. The sales from this event were also much higher than planned in the final weeks, which resulted in a greater than planned deferral of revenues into future quarters.
Mr. Friedman continued, Due to the fact that our Fall Lighting Sale generates a disproportionate amount of our third quarter sales compared to other quarters, we do not expect the lighting business to have a negative effect on future quarters. Also, due to the fact that lighting is a non-seasonal core business, we are comfortable with our inventory levels in this category. In addition, while we expect a positive impact to our fourth quarter sales from the increased deferral of third quarter transactions into fourth quarter revenue, our special order furniture sales continue to trend above plan which also is likely to drive higher levels of revenue deferral from the fourth quarter into future quarters.
Mr. Friedman concluded, Our product margins in both the retail and direct channels increased over last year and our overall gross margins expanded by 240 basis points in the third quarter compared to the same quarter last year consistent with our strategy to expand higher margin core businesses and the editing of lower margin discovery items and accessories. We also continue to make significant progress in our Supply Chain and Distribution Centers, where we have both improved service and have reduced costs for the quarter compared to a year ago.
For the nine months ended October 29, 2005, net revenue was $390.6 million, a 16% increase versus the same period a year ago. Comparable store sales for the nine months increased 2.7%
on top of a 9.0% increase in the first nine months last year. Direct-to-customer sales increased 42% to $111.8 million following a 91% increase in the same period a year ago.
The Companys net results for the nine months ended October 29, 2005 was a loss of $9.8 million ($0.28 per share), compared to a loss of $8.9 million ($0.27 per share) for the same period last year. The net results for the nine months ended October 29, 2005 include a pre-tax, non-cash charge of $1.6 million ($1.0 million, after tax) associated with the removal of store fixtures from the store remodeling effort that was charged in our second quarter earnings.
The Company provides the following guidance for the fourth quarter of fiscal 2005:
Comparable store sales in the low negative single digits compared to an increase of 5.7% comparable store sales in the prior years fourth quarter.
Direct-to-customer net revenue increase of 15% to 20% on top of a 51% increase in the prior years fourth quarter.
Earnings per share for the fourth quarter of $0.29 to $0.33 versus earnings per share of $0.28 a year ago.
Inventory at the end of fiscal 2005 is expected to be up approximately 5% compared to a year ago.
Capital expenditure is expected to be $27 million to $29 million for the full year.