Restoration profits slump 18 percent
Home & Textiles Today Staff -- Home Textiles Today, March 26, 2004
With margins thinning out and costs rising, fourth-quarter profits at Restoration Hardware Inc. fell by 18.7 percent, to $7.9 million from $9.7 million last year.
Acting as a drag were lower-than-expected holiday sales and higher markdowns to clear the shelves of holiday merchandise, the retailer said.
Helped by a surging catalog and Internet business, overall sales increased by 6.3 percent, to $165 million from $155.2 million.
In a big lift to the top line, direct-to-consumer sales shot up by 50.8 percent, to $26.6 million from $17.6 million last year. The company's store sales were relatively flat, however, edging up just 0.6 percent, to $138.4 million from $137.6 million. Same-store sales decreased by 0.7 percent.
Gary Friedman, president and CEO, commented, "While holiday sales in seasonal items were disappointing, our January 2004 comparable-store sales increase of 23 percent and direct-to-customer division growth of 51 percent in the fourth quarter demonstrate the underlying strength of our core businesses."
Restoration Hardware Inc.
|Qtr. 1/31 (x000)||2003||2002||% chg|
|(...) - denotes decline
a-12-month results include an income-tax benefit of $1.8 million, compared with $8.5 million a year ago. Prior-year results include a charge of $289,000 stemming from a change in the fair value of warrants; and a preferred shareholder dividend of $358,000.
|Oper. income (EBIT)||13,791||15,665||-12.0|
|Per share (diluted)||0.21||0.26||-19.2|
|Average gross margin||35.8%||36.7%||—|
|52 weeks||2003||2002||% chg|
|Oper. income (EBIT)||(2,590)||(9,025)||—|
|Per share (diluted)||(0.10)||(0.13)||—|
|Average gross margin||30.2%||29.3||—|
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