Earnings Insight and Analysis - Restoration Hardware Holdings

LONDON, September 12, 2014 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings insight and analysis on Restoration Hardware Holdings Inc. (NYSE: RH). The company announced its financial results for Q2 FY14 on Wednesday, September 10, 2014. During Q2 FY14, the company's net revenue grew 14% Y-o-Y, and adjusted diluted EPS increased 37% on year-over-year basis. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview  

During Q2 FY14, Restoration Hardware Holdings Inc. reported net revenue of $433.77 million, compared to $382.10 million in the preceding year quarter. Analysts from Bloomberg were expecting net revenue of $454.07 million in Q2 FY14. Comparable brand revenue, which includes direct, increased 13% in Q2 FY14, on top of a 30% Y-o-Y increase in Q2 FY13. Further, the company's direct revenues during the quarter increased 19% to $211.8 million, on top of a 33% increase in Q2 FY13. The free research on RH can be downloaded as in PDF format at:

www.Investor-Edge.com/RHFreeReport

The company's adjusted operating income for Q2 FY14 surged 43% to $48.94 million from $34.18 million in Q2 FY13. Restoration Hardware's adjusted net income the reported quarter increased to $27.70 million, or $0.67 per diluted share from $19.79 million, or $0.49 per diluted share in Q2 FY13. Including the impact of non-recurring and other items, GAAP operating income for Q2 FY14 stood at $48.94 million compared to a loss of $27.78 million in Q2 FY13. Further, on GAAP basis, the company swung into profits of $27.25 million, or $0.66 per diluted share, in Q2 FY14, compared to a net loss of $17.84 million, or $0.46 per diluted share in Q2 FY13. Analysts from Bloomberg were expecting GAAP net income of $25.87 million, or $0.63 per diluted share for Q2 FY14.

Gary Friedman, Chairman and CEO of Restoration Hardware Holdings commented that in Q2, the company achieved a record operating margin of 11.3%, a 240 basis point improvement over last year, while its comparable brand revenue growth of 13% for the quarter on top of a 30% increase a year ago, represented an industry-best 43% gain over the two-year period. He further said that the company is pleased with the early results from its new 2014 Source Books, and that although the books were in homes seven weeks later than last year, the business continued to accelerate into the second half, giving the company confidence to increase its earnings guidance for FY14. Sign up and read the free analyst's notes on RH at:

www.Investor-Edge.com/RH-12092014

According to Mr. Friedman, the company remains focused on its key value driving strategies including the expansion of its product offer, the transformation of its retail stores, and the continued enhancement of its multi-channel platform and operating infrastructure. In relation to the transformation of its retail stores, the company will be opening a new, larger Full Line Design Gallery in Los Angeles and its first next generation Full Line Design Gallery in Atlanta in late 2014.

Mr. Friedman concluded that the company is constantly evolving and working to create a superior business model, and claimed that it is well on track towards achieving its long-term goal of $4 billion to $5 billion in North American sales, mid-teens operating margin, and significant free cash flow generation. Visit Investor-Edge and access the latest research on RH at:

www.Investor-Edge.com/RHEarningsCoverage

Restoration Hardware provided guidance for its third quarter and as well as for FY 14. For Q3 FY14, the company expects net revenues in the range of $475 million to $485 million. Adjusted net income is forecasted in the range of $19 million to $20 million, and adjusted diluted EPS in the range of $0.46 to $0.48. For FY14, the company projects net revenues to range from $1.85 to $1.87 billion; adjusted net income in the range of $94.9 to $96.7 million, and adjusted diluted EPS in the range of $2.29 to $2.33.

Stock Performance  

On Thursday, September 11, 2014, a day after the earnings release, shares in Restoration Hardware Holdings Inc. fell by 2.51%, ending the session at $79.99. A total of 5.45 million shares were traded, significantly above its three months average volume of 1.25 million shares. Over the previous three trading sessions and in the last one month, the company's shares have declined 1.61% and 5.15%, respectively. However, since the start of this year, the stock has gained 18.86%. Shares in Restoration Hardware Holdings Inc. are trading above their 200-day moving average and the stock's 50-day moving average of $84.82 is greater than its 200-day moving average of $71.25. Moreover, the company's stock traded at a PE ratio 50.63 and has a Relative Strength Index (RSI) of 43.50.

Sneak Peek to Corporate Insider Trading  

In the last one month, there were twelve insider transactions made by Carlos Alberini, Director at Restoration Hardware Holdings Inc. between August 14 and September 08, 2014, Mr. Alberini sold a total of 100,000 shares of the company for $8,505,927, at an average price of $85.06, per share. Complimentary in-depth research on RH is available at:

www.Investor-Edge.com/RHInsiderTrading

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