Restoration Hardware Holdings, Inc. has announced record financial results for the second quarter ended August 2, 2014. According to the company, net revenues increased 14% on top of a 30% increase for the same period last year. Adjusted operating margin increased 240 basis points to 11.3%; GAAP operating margin was 11.3% compared to -7.3% for the same period last year.
Adjustted net income increased 40% to $27.7 million; GAAP net income of $27.3 million compared to a net loss of $17.8 million for the same period last year, and adjusted operating income increased 43% to $48.9 million; GAAP operating income of $48.9 million compared to a loss of $27.8 million for the same period last year, the company reported. Comparable brand revenues increased 13% on top of a 30% increase in last year’s Q2.
“Our ability to innovate, curate and integrate new products, categories and businesses, then test and rapidly scale them across our multi-channel platform, is at the core of RH becoming a disruptive brand in the home furnishings marketplace,” Gary Friedman, chairman and CEO, said. “Looking forward, we remain focused on our key value driving strategies including the expansion of our product offer, the transformation of our retail stores, and the continued enhancement of our multi-channel platform and operating infrastructure. Regarding the transformation of our retail stores, we will be opening a new, larger Full Line Design Gallery on Melrose Avenue in Los Angeles and our first next generation Full Line Design Gallery in Atlanta later this year. We now have signed leases for 8 next generation Full Line Design Galleries and have identified and are in negotiations for more than 30 additional locations.”
Friedman concluded, “From the continued evolution of our Source Books, to the transformative economics of our Full Line Design Galleries, to how we source, price, present and deliver products across our multi-channel platform, we are constantly evolving and working to create a superior business model. While still in the early stages of building RH into the leading luxury home brand, we are well on track towards our long-term goal of $4 billion to $5 billion in North American sales, mid-teens operating margin, and generating significant free cash flow.”
As of August 2, 2014, Restoration Hardware operated 68 retail stores, consisting of 59 Galleries, 6 Full Line Design Galleries and three Baby & Child Galleries, as well as 17 outlet stores throughout the United States and Canada.