Earnings in Focus: Restoration Hardware Holdings, Inc. (RH)

Restoration Hardware Holdings, Inc. (NYSE:RH) reported earnings for the three months ended April 2016 on June 08, 2016. The company earned $-0.05 per share on revenue of $455.46M. Analysts had been modeling earning per share of $0.05 with $452.14M in revenue.

Restoration Hardware Holdings, Inc. (NYSE:RH) announced financial results for the first quarter ended April 30, 2016.

The Company will post a video presentation between approximately 1:15 p.m. – 1:30 p.m. PT (4:15 p.m. – 4:30 p.m. ET) today highlighting its continued evolution and recent performance on the RH Investor Relations website at ir.restorationhardware.com.

First Quarter Highlights

  • Net revenues increased 8% on top of a 15% increase last year
  • Comparable brand revenues increased 4% on top of a 15% increase last year
  • GAAP net loss of $13.5 million compared to net income of $7.2 million for the same period last year
  • Adjusted net loss of $2.1 million compared to adjusted net income of $9.8 million last year
  • GAAP diluted loss per share of $0.33 compared to diluted earnings per share of $0.17 for the same period last year
  • Adjusted diluted loss per share of $0.05 compared to adjusted diluted earnings per share of $0.23 last year

First Quarter Fiscal 2016 Results

Revenue – Net revenues for the first quarter of fiscal 2016 increased 8% to $455.5 million from $422.4 million in the first quarter of fiscal 2015.

  • Comparable brand revenue growth, which includes direct, was 4% in the first quarter of fiscal 2016 on top of 15% for the same period last year.
  • Stores revenues increased 19% to $256.1 million in the first quarter of fiscal 2016. This growth is on top of a 13% increase in stores revenues in the first quarter of fiscal 2015.
  • Direct revenues decreased 4% to $199.4 million in the first quarter of fiscal 2016. Direct revenues during the first quarter of fiscal 2016 represented 44% of total net revenues.

Operating Income and Margin** – On an unadjusted basis, GAAP operating loss was $11.5 million in the first quarter of fiscal 2016 compared to GAAP operating income of $17.0 million for the same period last year and GAAP operating margin was -2.5% compared to 4.0% for the same period last year.

Adjusted operating income in the first quarter of fiscal 2016 was $0.7 million compared to $18.6 million in the first quarter of fiscal 2015. Adjusted operating margin in the first quarter of fiscal 2016 was 0.2% compared to 4.4% for the same period last year.

Net Income (Loss) ** – On an unadjusted basis, GAAP net loss for the first quarter of fiscal 2016 was $13.5 million compared to GAAP net income of $7.2 million for the same period last year.

Adjusted net loss in the first quarter of fiscal 2016 was $2.1 million compared to adjusted net income of $9.8 million in the first quarter of fiscal 2015.

Earnings (Loss) Per Share** – On an unadjusted basis, GAAP diluted loss per share for the first quarter of fiscal 2016 was $0.33 compared to GAAP diluted earnings per share of $0.17 for the same period last year.

Adjusted diluted loss per share for the first quarter of fiscal 2016 was $0.05 compared to adjusted diluted earnings per share of $0.23 for the same period last year.

A reconciliation of GAAP to non-GAAP financial measures is provided in the tables accompanying this release.

Restoration Hardware Holdings, Inc. earnings per share showed a decreasing trend of -2% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 235%.Analysts project EPS growth over the next 5 years at 19.5%. It has EPS annual growth over the past 5 fiscal years of 63.9% when sales grew 22.2. It reported 7.8% sales growth, and -294.6% EPS decline in the last quarter.

The stock is trading at $27.92, up 12.81% from 52-week low of $24.75. The stock trades down -73.78% from its peak of $106.49 and % below the consensus price target of $40.07. Its volume clocked up at 2.84 million shares which is lower than the average volume of 2.97 million shares. Its market capitalization currently stands at $1.12B.

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