In the first quarter, ended May 2, Restoration Hardware suffered a sales slide associated with the COVID-19 pandemic but is looking forward to a second quarter rebound.
RH posted a net loss in the quarter of $3.2 million, or 17 cents per diluted share, versus net income of $35.7 million, or $1.43 per diluted share, in the year-before period.
Adjusted for one-time events, net income was $29.9 million, or $1.27 per diluted share, versus $48.2 million, or $1.97 per diluted share, in the quarter a year before. RH topped a Zacks Investment Research analyst consensus estimate of 80 cents per adjusted diluted share for the quarter.
Net revenues were $482.9 million versus $598.4 million in the year-earlier quarter. Operating income was $35.5 million versus $68.6 million and adjusted operating income was $48.1 million versus $70.5 million, in the year-previous quarter.
In a statement, RH CEO Gary Friedman said the first quarter, “presented challenges that were unimaginable when the quarter began.”
He asserted that, although the company’s galleries, restaurants and outlets were closed from March 17 through the end of the quarter, RH interior design teams across North America continued to find creative ways to help customers “reimagine” their interior spaces while sheltering at home. Core RH business demand, inclusive of Baby & Child plus Teen, fell 11% in the first quarter, Friedman maintained, while total company demand, inclusive of both restaurants and outlets, which don’t have an online component, slid 17% in the first quarter. He added, however, that RH experienced a strong rebound in the second quarter. The company continues to reopen galleries, outlets and restaurants. As of June 3, he pointed out RH had reopened approximately 74% of its galleries, 68% of its outlets and 50% of its restaurants.
The RH first quarter earnings announcement reiterated key elements of Friedman’s previously published annual letter to shareholders detailing how the company will move forward and thrive in the years ahead including through initiatives in hospitality, housing and international development.