RH reports stronger sales, jump in earnings

CORTE MADERA -- Restoration Hardware Holdings, Inc. (NYSE: RH) announced a 92 percent increase in net income for its fiscal year ended Feb. 1.

Excluding one-time costs largely connected to its initial public offering, the Corte Madera-based retailer of high-end home furnishings earned $69.1 million for its fiscal year 2013. Those earnings were equivalent to $1.71 per share.

"In 2013, RH continued to outperform the home furnishings industry by a wide margin. We increased net revenues 33 percent on a comparable week basis, and comparable brand revenue increased 31 percent on top of 28 percent last year, delivering our fourth consecutive year of over 25 percent comparable brand revenue growth," said Gary Friedman, chairman and chief executive.

RH saw $1.56 billion in revenue in its recent fiscal year. Store sales increased 27 percent for the year, following a 28 percent increase in fiscal year 2012.

"Over the past three years we've continued to innovate, test and prove that we can build a retail experience that defies the current conventional wisdom that everyone is moving to the web and retail stores are dead," Mr. Friedman said on a conference call with investment analysts Thursday. "We have proven just the opposite and continue to develop new and more exciting concepts that will create an even more compelling and highly experiential environment for our customers."

The company said it expected net revenue between $345 million and $350 million for the first quarter, along with net income from $3.7 million to $4.5 million and earnings-per-share between nine and 11 cents. The company anticipates approximately 40.7 million shares outstanding at the end of its upcoming fiscal quarter.

RH justified the inclusion of results excluding one-time costs like those of its IPO as providing a better picture of the company's ongoing activities. Including those costs would result in net income of $18.2 million for the year, up from a net loss of $12.8 million in fiscal year 2012.

The company's stock was trading up 0.55 percent when markets closed on Thursday, at $63.81 per share.

RH also announced the appointment of Doug Diemoz as chief development officer. Mr. Diemoz joins the company after 20 years at brands such as MEXX, Williams-Sonoma, Inc. and Gap, Inc., and will be responsible for guiding the company's future international growth and global expansion efforts.

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