Restoration Hardware Cuts Forecast
June 08 2016 - 6:10PM
Dow Jones News
Restoration Hardware Holdings Inc. made a deep cut to its annual
guidance as it swung to a loss in the latest quarter, hurt by a
slowdown in luxury shopping.
Shares of Restoration Hardware, which had already fallen 62% in
the past year, dropped 14% in after-hours trading to $31.
The company said it now expects full-year earnings on a
per-share basis between $1.60 and $1.80, down from a previous
estimate of $2.69 to $2.72.
And it expects revenue to increase by 1% to 3%, slightly under
its previous projection of sales between $2.15 billion and $2.21
billion and under the 5% rise to $2.21 billion predicted by
analysts.
Restoration Hardware also offered a dour outlook for the current
quarter, saying it expects adjusted earnings between 28 cents and
33 cents on revenue in the range of $505 million to $520 million.
Analysts expected earnings of 80 cents on revenue of $532
million.
"Our near-term business performance is being pressured by the
continued headwinds in the markets impacted by energy and currency,
as well as a general slowdown in the luxury consumer market," said
Gary Friedman, CEO of the company.
Mr. Friedman said that he expects the company's fortunes to turn
around in the final quarter of the year, helped in part by a
cost-cutting effort that aimed to save $20 million annually. No
further details on the cost-cutting push were given.
The high-end retailer, which launched RH Modern last fall to
target millennial and city dwellers, has struggled to stock and
ship the merchandise. In March, the company said the problems would
linger into the latest quarter.
The company had said it expects investments related to "customer
accommodations due to RH Modern production delays" to reduce
first-quarter adjusted earnings by 12 cents to 15 cents a
share.
For the first quarter, Restoration Hardware reported a loss of
$13.5 million, or 33 cents a share, compared with a profit of $7.2
million, or 17 cents a share, a year earlier. On an adjusted basis,
the loss was 5 cents a share, down from a profit of 23 cents a
share.
Sales rose 7.8% to $455.5 million.
The company had forecast a profit of 4 cents to 6 cents for the
quarter, with sales between $452 million and $456 million.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
June 08, 2016 17:55 ET (21:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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