For Restoration, a rough road
December 1, 2003,
Rising costs made for an ugly quarterly picture for Restoration Hardware. The retailer saw its net loss for the quarter widen to $2.9 million from $2.4 million in third quarter 2002, and its operating loss deepen from $2.9 million in 2002 to $4.2 million this year.
The inflation in SG&A negated a fairly positive sales performance. Third-quarter checkouts rose 5.6 percent, to more than $95.8 million, and same-store sales climbed 2.9 percent.
"Customers' reaction to our annual autumn furniture sale and our new special-order upholstery program created overall demand which exceeded our expectations," said Gary Friedman, president and ceo. "During the quarter, we opened two new Restoration Hardware prototype stores [in Cleveland and Richmond, VA], which have been designed to showcase our existing and new core businesses with greater clarity and authority."
For the first nine months, Restoration trimmed its net loss from $13.3 million in 2002 to $10.8 million this year, and its operating loss from $24.7 million to $16.4 million. Sales rose an impressive 11.6 percent for the first three quarters, to almost $273.6 million.
Restoration Hardware Inc.
|Qtr. 11/1 (x000)||2003||2002||% chg|
|Earnings per share||-0.09||-0.08||—|
|Average gross margin||30.0%||29.9%||—|
|Nine months||2003||2002||% chg|
|Earnings per share||-0.36||-0.46||—|
|Average gross margin||26.9%||24.6%||—|