In its recently announced second quarter financial statement, Restoration Hardware posted a 30% net revenue increase over the same quarter last year, where it saw a 24% increase over 2011. Comparable store sales also soared 26% higher than 2012 Q2, where the company had increases of 31% over 2011’s Q2 sales.
Adjusted net income was up 62% to $19.8 million from $12.2 million in the same quarter last year.
“We are pleased to announce record financial results for the second quarter. Our industry-leading performance is a reflection of our ability to innovate, curate and integrate new products and businesses offering an unmatched customer experience,” Gary Friedman, chairman, creator, curator, and co-CEO, said, noting that the company has achieved this growth while continuing to invest in its infrastructrure and new businesses to support future growth.
To facilitate continued growth, Friedman said, the company is eliminating the fall edition of its Source Book and moving to an annual mailing business model. The annual edition will be mailed in the spring.
“Due to the current strength of our business, the continued evolution of our Source Book model, and the enhanced ability to connect with our customers through digital and electronic marketing, we are moving to a once per year mailing of our Source Books,” Friedman said. “We believe this decision will result in a step change effect in our earnings and cash flow model, allowing us to reach double-digit operating margins and free cash flow positive significantly ahead of our prior expectations. Concurrently, we are raising our earnings estimates for the remainder of 2013 to reflect our current business trends and the associated cost savings.”
Carlos Alberini, co-CEO, added, “Our business momentum remains very strong and provides good visibility into the back half of the year. “As we look forward, the transformation of our real estate remains our top priority and the true key to unlocking the value of our dominant assortment. Our existing Full Line Design Galleries continue to be highly productive and are driving strong results in each market. We plan to open new Full Line Design Galleries in Greenwich, Atlanta and Los Angeles in 2014 and are currently in negotiations for more than 30 locations in other key markets,” Alberini said.
Beyond 2014, Restoration Hardware plans to open more than 10 locations, beginning in 2015. The next generation of Full Line Design Galleries will be larger and showcase dominant assortments and new businesses, Alberini noted.