Restoration Hardware Holdings, Inc. (RH) has reported an 87.85 percent plunge in profit for the quarter ended Oct. 29, 2016. The company has earned $2.52 million, or $0.06 a share in the quarter, compared with $20.71 million, or $0.49 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $8.02 million, or $0.20 a share compared with $27.74 million or $0.65 a share, a year ago. Revenue during the quarter grew 3.18 percent to $549.33 million from $532.41 million in the previous year period. Gross margin for the quarter contracted 382 basis points over the previous year period to 32.01 percent. Total expenses were 97.20 percent of quarterly revenues, up from 91.57 percent for the same period last year. That has resulted in a contraction of 563 basis points in operating margin to 2.80 percent.
Operating income for the quarter was $15.39 million, compared with $44.88 million in the previous year period.
However, the adjusted operating income for the quarter stood at $18.15 million compared to $49.95 million in the prior year period. At the same time, adjusted operating margin contracted 608 basis points in the quarter to 3.30 percent from 9.38 percent in the last year period.
Gary Friedman, chairman and chief executive officer, commented, "Third quarter fiscal 2016 net revenues of $549 million and adjusted EPS of $0.20 were ahead of our guidance for the quarter. Net revenues were driven by a higher conversion of orders into sales than expected given our strong in stock levels and supply chain improvements. In addition, our margins continued to be negatively impacted by many of the temporal factors impacting our fiscal 2016 earnings in addition to one-time costs associated with the remodel and refresh of our legacy Galleries during the quarter."
For fiscal year 2016, Restoration Hardware Holdings, Inc. forecasts revenue to be in the range of $2,110 million to $2,140 million. The company expects diluted earnings per share to be in the range of $1.19 to $1.29 on adjusted basis.
For the fourth-quarter 2016, Restoration Hardware Holdings, Inc. forecasts revenue to be in the range of $562 million to $592 million. The company expects adjusted net income to be in the range of $24.50 million to $28.50 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.60 to $0.70.
Operating cash flow remains negative
Restoration Hardware Holdings, Inc. has spent $29.12 million cash to meet operating activities during the nine month period as against cash outgo of $17.63 million in the last year period.
The company has spent $263.38 million cash to meet investing activities during the nine month period as against cash outgo of $182.84 million in the last year period.
The company has spent $2.31 million cash to carry out financing activities during the nine month period as against cash inflow of $278.54 million in the last year period.
Cash and cash equivalents stood at $55.43 million as on Oct. 29, 2016, down 75.58 percent or $171.55 million from $226.98 million on Oct. 31, 2015.
Debt moves up
Restoration Hardware Holdings, Inc. has witnessed an increase in total debt over the last one year. It stood at $540.52 million as on Oct. 29, 2016, up 5.47 percent or $28.01 million from $512.51 million on Oct. 31, 2015. Restoration Hardware Holdings has witnessed an increase in long-term debt over the last one year. It stood at $540.52 million as on Oct. 29, 2016, up 5.47 percent or $28.01 million from $512.51 million on Oct. 31, 2015. Total debt was 25.07 percent of total assets as on Oct. 29, 2016, compared with 24.89 percent on Oct. 31, 2015. Debt to equity ratio was at 0.60 as on Oct. 29, 2016, down from 0.61 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 1.39 for the quarter from 4.08 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
