From Home Furnishing Business
RH Boosts Revenue, Earnings Projections
Retailer RH (NYSE: RH), formerly known as Restoration Hardware, has raised its revenue and adjusted net income projections for the third and fourth quarters of its fiscal year as the company continues to gain momentum from its new membership business model and a host of other initiatives.
For the fiscal third quarter, which ended in late October, revenues are now projected at $592.5 million, an 8% increase from last year’s third quarter and above a September projection of $575 million to $590 million.
Third-quarter adjusted net income is now projected at $24 million to $24.5 million, up from a September projection of $16 million to $19 million.
The company said the improvements are projected despite the impact of Hurricanes Harvey and Irma, which decreased revenue about 1% and cost RH an estimated $1.3 million on the bottom line.
Adjusted earnings per share for the quarter are now projected at $1.02 to $1.04, up from the September forecast of 68 cents to 80 cents.
For the fourth fiscal quarter, which ends in late January, RH increased its adjusted net income projection to $37 million to $41 million despite lowering its revenue projection because of a delay in opening a new Design Gallery in New York.
Fourth-quarter revenues are now projected at $655 million to $680 million, down from a September projection of $664 million to $689 million. The company said the delayed New York store opening will cause RH to lose about $9 million in revenue.
Despite the decision to delay the New York opening because of extensive road construction in the area, RH increased its adjusted net income projection for the fiscal year to $82 million to $87 million. In September, the projection was $70 million to $77 million.
“Over the past 18 months, we transformed our business from a promotional to a membership model that is enhancing our brand, streamlining our operations, and improving the customer experience, said Gary Friedman, CEO. “Simultaneously we began the redesign of our supply chain network, rationalizing our product offer, and transitioning inventory into fewer facilities, creating a more capital efficient model.”