After completing a strong fourth quarter and fiscal year, Restoration Hardware is responding to the COVID-19 crisis by adjusting operations including capital spending and deferring executive salaries.
Net income for the fourth quarter was $68.4 million, or $2.66 per diluted share, versus $27.3 million, or $1.06 per diluted share, in the year-before period. Adjusted for one-time events, net income was $91.2 million, or $3.72 per diluted share, versus $74 million, or $2.92 per diluted share, in the year-previous quarter. RH topped an analyst consensus adjusted earnings per diluted share estimate of $3.59 in the period.
Revenues were $665 million versus $670.9 in the year-earlier quarter. Income from operations was $101 million versus $89.5 million in the year-prior period.
In the fiscal year, net income was $220.4 million, or $9.07 per diluted share, versus $135.7 million, or $5.12 per diluted share, in the year before. Adjusted net income was $276.3 million, or $11.66 per diluted share, versus $204.3 million, or $7.80 per diluted share, in the year prior.
Revenues were $2.65 billion versus $2.51 billion in the year earlier. Income from operations was $362.8 million versus $261.7 million in the year prior.
In a note to shareholders, Gary Friedman, Restoration Hardware CEO, stated, “While proud of the outstanding results our team achieved in 2019, clearly everything has changed as a result of the rapid spread of COVID-19 around the world… Due to the significant disruption to financial markets and retail business operations, we are withdrawing all prior guidance and outlook statements that relate to the performance of our business with respect to fiscal year 2020. Additionally, in light of the current crisis and the concurrent financial hardships being experienced by so many at this time, the executive leadership team, including myself and our nine president level leaders have chosen to forgo our salaries until business conditions stabilize.”
He added, “Like others, we will take the expected steps of deferring new business introductions and capital spending, while reducing costs to navigate through the short-term challenges of this crisis. Our galleries, restaurants, and outlets, which were originally planned to be closed from March 17th through March 27th, will remain closed until further notice as multiple counties and states have imposed shelter in place, or stay at home orders through mid to late April. We initially communicated that we would pay our associates who were not able to work due to the closings through March 27th, and have also extended that date through April 3.”
Friedman continued, “Looking beyond the current crisis, we continue to see a clear a path to over $5 billion in North America revenues. We also believe there is an opportunity to build a $20 billion global brand as we expand internationally, and further develop the RH ecosystem moving the brand beyond creating and selling products to conceptualizing and selling spaces.”