Restoration Hardware Swings To Profit, Outlook Strong; Shares Up – Update

Home furnishings retailer Restoration Hardware Holdings Inc (RH: Quote), Thursday said it swung to a fourth-quarter profit, driven largely by growth in revenue and gross margins, while the prior year was weighed down by one-time charges. Earnings for the period came in line with Wall Street analysts' estimates, while revenues fell short of expectations.

Nonetheless, shares of the company surged nine percent in extended hours, after it detailed first-quarter and full year earnings outlook above the Street's current estimates.

Corte Madera, California-based Restoration Hardware reported fourth-quarter profit of $26.6 million or $0.65 per share, compared to a loss of $28.4 million or $0.79 per share last year.

Last year's loss mainly reflects non-cash compensation expense and other charges related to Restoration Hardware's IPO in November 2012.

Adjusted earnings for the quarter improved to $34 million or $0.83 per share from $24 million or $0.64 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings of $0.83 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues increased 18 percent to $471.7 million from $398.1 million last year. Thirteen analysts had a consensus revenue estimate of $493.09 million for the quarter.

Comparable store sales grew 17 percent year-over-year on top of a 26 percent growth last year.

Gross margins improved to 37.1 percent from 36.5 percent last year.

Looking forward the the first quarter, the company expects adjusted earnings of $0.09 to $0.11 per share and revenues of $345 million to $350 million. Analysts currently expect earnings of $0.07 per share on revenues of $350.11 million.

For the fiscal 2014, the company expects adjusted earnings in of $2.14 to $2.22 per share and revenues of $1.83 billion to $1.86 billion. Analysts currently expect full-year earnings of $2.17 per share on revenues of $1.89 billion.

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Restoration Hardware Swings To Profit, Outlook Strong; Shares Up - Update