Restoration Hardware Holdings, Inc. announced double digit growth in its fiscal first quarter for this year, ended May 3, 2014. The retailer reported a net revenue increase of 22%— $366.3 million from $301.3 million in the first quarter of fiscal 2013— on top of a 38% increase for the same period last year. Comparable brand revenue growth was 18% on top of 39% for the same period last year.
Adjusted operating income increased 204% to $14.0 million and adjusted net income increased 217% to $7.2 million.
“RH continued to outperform the home furnishings industry by a wide margin in the first quarter of 2014,” said Gary Friedman, chairman and CEO of Restoration Hardware, noting that comparable brand revenues increases represent an industry-leading 57% increase over a two-year period. “These results are even more impressive considering the fact that we eliminated the mailing of our Fall 2013 Source Book.”
Friedman continued, “The business momentum and strong trends we are seeing thus far in 2014 give us further confidence in our financial outlook for the year. We are increasing our net revenue guidance for 2014 to grow in the range of 20% to 22%, and expect adjusted net income to grow in the range of 33% to 37%. Looking forward, we remain focused on our key value-driving strategies including the expansion of our product offer and the transformation of our retail stores. While we are still in the early stages of reading the results of our 2014 Source Books, we are very pleased with the initial response to our new products, and continue to believe that the design and presentation of these new books will be transformative to our business.”
On new store openings, Friedman commented that initial reaction to the company’s recently opened Full Line Design Gallery at The Historic Post Office in Greenwich, CT, has been “outstanding,” and that new larger Full Line Design Gallery in Los Angeles Atlanta later this year are on track. Additionally, the company is expanding the size of our New York Gallery, adding two additional floors to the top-performing store.
“We now have signed leases for six next-generation Full Line Design Galleries and are in negotiations for more than 25 additional locations,” Friedman said. “Once our real estate transformation is complete in North America, we believe we will deliver $4 billion to $5 billion in annual sales, achieve mid-teens operating margins, and generate significant free cash flow.”
As of May 3, 2014, the company operated a total of 69 retail stores, consisting of 61 Galleries, 5 Full Line Design Galleries and 3 Baby & Child Galleries, as well as 17 outlet stores throughout the United States and Canada.