From Home Furnishing Business
Restructuring Costs Squeeze Q4 Profits at Restoration Hardware
A variety of restructuring costs, as well as expenses stemming from the launch of RH Modern, erased much of Restoration Hardware’s fourth-quarter profit, according to preliminary financial results released by the lifestyle retailer.
The company, now officially known as RH (NYSE: RH), said net income for the quarter ended Jan. 28 totaled $8.75 million, or 21 cents per share. That’s down from $33.3 million or 79 cents per share in the fourth quarter of the previous fiscal year.
Gary Friedman, chairman and CEO, said the launch of RH Modern reduced earnings by about 30 cents per share, while the timing of recognizing membership revenues reduced the figure by another 25 cents per share. In addition, the retailer’s effort to reduce inventories and SKU count cost about 45 cents per share.
"As we exit fiscal 2016, we are now through the most uncertain stage of our transformation. As previously communicated, we have made several strategic investments and changes to our business model in fiscal 2016 that temporarily depressed financial results in the short term, and that we believe will strengthen our brand and position the business for accelerated growth in 2017 and beyond,” Friedman said.
Fourth-quarter revenues fell 9.3% to $586.7 million.
For the fiscal year ended Jan. 28, net income totaled $4.71 million or 12 cents per share. That was down from $91.1 million or $2.16 per share in the previous fiscal year.
The retailer has not announced a date to release complete financial results for the fourth quarter and fiscal year.