RH Revenues Jump 7.2% as Retailer Begins Resolving Shipping Woes

September 9, 2016  by Jane Chero in Business Strategy, Industry   

The most recent quarter’s revenues of $543.4 million, up from $506.9 million in the same quarter a year ago, was recorded despite a 3% drop in comparable-brand revenues and a 2% drop in direct-to-consumer revenues, which include catalog and Internet sales.

Revenues from its brick-and-mortar retail stores rose 15% and accounted for 57% of total revenues.

Net income was $6.92 million or 17 cents per share, which was well below the $29.9 million or 75 cents per share in the same quarter last year. The most recent quarter had a variety of one-time charges, including reorganization costs of $3.3 million and a $3.4 million adjustment in the value of inventory of its recently acquired Waterworks chain.

“As previously communicated, we are making several strategic investments and changes to our business model in fiscal 2016 that are temporarily depressing financial results in the short term, which we believe will strengthen our brand and position the business for accelerated revenue and earnings growth in 2017 and beyond,” said Gary Friedman, Chairman and CEO.

“These temporal issues include the costs related to the launch of RH Modern; the timing of recognizing membership revenues related to the transition from a promotional to a membership model; efforts to reduce inventories and rationalize our SKU count; and the decision to push our Source Book mailing from the spring to the fall.”

For the six months ended July 30, revenues were $998.8 million, up from $929.4 million in the first half of the previous fiscal year.

The retailer recorded a six-month net loss of $6.55 million or 16 cents per share. In the comparable period, the company had net income of $37.1 million or 93 cents per share.