Restoration Hardware Profit Rises, Lifts FY Outlook; Shares Up 6%

(RTTNews) - Home furnishings retailer Restoration Hardware Holdings Inc.(RH), Wednesday reported a surge in profit for the third quarter, as revenues jumped 22 percent and margins improved, with both earnings and revenues topping Wall Street estimates.

Moving ahead, the company lifted its full year outlook. Following the news, Restoration Hardware's stock gained 6 percent in after-hours trade.

Corte Madera, California-based Restoration Hardware's third-quarter profit rose to $19.4 million or $0.47 per share from $9.5 million or $0.23 per share last year.

Excluding one-time items, adjusted earnings for the quarter rose to $20.3 million or $0.49 per share from $13.0 million or $0.32 per share a year ago. On average, 18 analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter climbed 22 percent to $484.7 million from $395.8 million a year ago. Analysts had a consensus revenue estimate of $481.91 million for the quarter.

Comparable brand revenues, which includes direct increased 22 percent on top of a 38 percent increase last year.

Gross margins improved to 37.2 percent from 35.6 percent last year, while operating margins advanced to 7.6 percent from 6.1 percent last year.

Looking forward to the fourth quarter, the company expects adjusted earnings of $0.99 to $1.01 per share and revenues of $575 million to $585 million. Analysts currently expect earnings of $1.00 per share on revenues of $582.84 million for the quarter.

For the fiscal year 2015, the company now expects adjusted earnings of $2.33 to $2.35 per share and revenues of $1.86 billion to $1.87 billion. Analysts currently expect earnings of $2.33 per share on revenues of $1.86 billion for 2015.

Previously, the company expected adjusted earnings of $2.29 to $2.33 per share and revenues of $1.85 billion to $1.87 billion.

CEO Gary Friedman said, "The business momentum and strong trends we are seeing for the remainder of the year give us further confidence in our financial outlook for fiscal 2014.

RH closed Wednesday's trading at $86.18, down $0.22 or 0.25%, on the NYSE. The stock, however, gained $5.33 or 6.18%, in the after-hours trade.