RH (formerly known as Restoration Hardware) delivered another stellar quarter that topped expectations despite supply chain disruption.
The luxe home furnishings retailer also reported that it will begin its global expansion in 2022 with the opening of RH England, at Aynhoe Park, a 73-acre historic estate in Banbury, England.RH said it has secured locations for stores (“galleries”) in London, Paris, Munich and Dusseldorf, and is in lease or purchase negotiations for ones in Milan, Madrid, Brussels and France.
Calling 2022 “the year of the new,” chairman and CEO Gary Friedman detailed the company’s upcoming initiatives, which, in addition to the opening of its first global outpost, include the lift off of RH1 & RH2, its customized Gulfstream G650ER and G550 that will be available for charter, and the christening of RH3, a luxury yacht that will be available for charter in the Mediterranean and Caribbean. The company will also open its delayed, first-ever boutique hotel, RH Guesthouse, in New York City, and unveil a new digital site, The World of RH.
Looking further out, Friedman said the company plans to open locations in every major market, generating revenues of $5 to $6 billion in North America, and $20 to $25 billion globally. During the quarter, it opened a 60,000-sq.-ft., three-level gallery at Oakbrook Center, in Oak Brook, Ill.
“While our plans for fiscal 2020 and 2021 were delayed by the virus, make no mistake, they were not disrupted by it,” he stated. “Quite the contrary. We refused to shelter and shrink, not allowing our culture to be shaped by stay-at-home mandates, or let collaboration be replaced by Zoom calls and isolation. No leaders of Team RH made their summer home their permanent home. There were no debates if we would return to work, only discussions of when we could.”
RH reported net income of $184.1 million, or $5.88 a share, for the quarter ended Oct. 30, compared with $46.4 million, or $1.64 a share, in the year-ago period. Adjusted earnings were $7.03 a share. Analysts had forecast earnings of $6.61 a share.
Revenue rose 19% to $1.01 billion from $844 million in the year-ago quarter. Analysts had expected revenue of $981.9 million. Sales rose 49% compared to the third quarter of 2019.
Friedman said that the company’s record performance demonstrates “both the desirability of our exclusive products and our ability to overcome the compounding supply chain challenges” that led it to delay the launch of RH Contemporary, the opening of its hotel and several locations, and the mailing of its fall source books until spring of 2022.
RH once again raised its outlook for fiscal 2021. It now expects fiscal 2021 revenue growth of 32% to 33% versus its prior outlook of 31% to 33%, and adjusted operating margin in the range of 25.3% to 25.5% versus its prior outlook of 24.9% to 25.5%.
“While we believe a conservative view of revenues in the fourth quarter is prudent due to the uncertainties posed by the new virus variant, the postponed opening of our new San Francisco Gallery until the spring, and the continued shipping and port delays, the power of our operating model gives us the confidence to raise our outlook for fiscal 2021 for the third time this year,” Friedman stated.