Restoration Hardware doesn’t operate many stores, but it is enjoying tremendous momentum at the ones it does operate.
The home furnishing retailer’s new upscale positioning contributed to a 29% increase in same store sales for the period ended October 27 on top of a 36% same store sales increase during the comparable period the prior year. It was the company’s first quarterly report since a triumphant return to public ownership on November 2 when it sold roughly 115 million shares at $24 a share. Profits on an adjusted basis during the third quarter increased 147% to $2.7 million from $1.1 million.
"We are very pleased with our third quarter financial results, as we delivered a 22% revenue increase on top of the 25% increase a year ago," said Restoration CEO Carlos Alberini. "This performance, which is consistent with the 22% growth achieved for the year-to-date period, marks our 11th consecutive quarter of double-digit revenue growth. During the period, we also drove significant earnings growth, contributing to a 95% increase in adjusted net income year-to-date. As we look forward, we remain focused on the execution of our growth initiatives, including the transformation of our real estate and the expansion of our offering."
Restoration Hardware was taken private in June 2008 and since then set out to rapidly reposition itself as an operator of upscale design galleries, as opposed to predominantly mall-based real estate, with a highly integrated multichannel capability. The company is focused on product categories such as furniture, lighting, textiles, bathware, décor, outdoor and garden, as well as baby and child products.
The company is in the early stages of transitioning its real estate to a larger format design gallery concept which, at 21,500-sq.-ft., is roughly three times the size of its typical store. Currently, design gallery stores are located in Los Angeles, Houston and Scottsdale and in the coming years new units are planned for Boston, Indianapolis, Atlanta and Greenwich, CT. However, the company said it has identified 50 urban markets suitable for the larger format stores.
"We believe our brand is redefining the luxury home furnishings market, and our proven ability to innovate, curate, and integrate new product categories and businesses will position us to continue our industry-leading growth," said Gary Friedman, the company’s chairman emeritus, creator and curator.
According to the company, it operates as a curator of the finest historical design the world has to offer and its collections of timeless, updated classics and reproductions are presented consistently across sales channels in sophisticated and unique lifestyle settings it believes are on par with world-class interior designers.