RH (RH) saw its loss narrow to $3.37 million, or $0.09 a share for the quarter ended Apr. 29, 2017. In the previous year period, the company reported a loss of $13.47 million, or $0.33 a share. On an adjusted basis, net profit for the quarter stood at $1.79 million, or $0.05 a share compared with a net loss of $2.07 million, or $0.05 a share in the last year period.
Revenue during the quarter grew 23.41 percent to $562.08 million from $455.46 million in the previous year period. Gross margin for the quarter expanded 230 basis points over the previous year period to 30.29 percent. Operating margin for the quarter period stood at positive 1.23 percent as compared to a negative 2.52 percent for the previous year period.
Operating income for the quarter was $6.90 million, compared with an operating loss of $11.48 million in the previous year period.
However, the adjusted operating income for the quarter stood at $8.28 million compared to $0.71 million in the prior year period. At the same time, adjusted operating margin improved 132 basis points in the quarter to 1.47 percent from 0.16 percent in the last year period.
For fiscal year 2017, RH forecasts revenue to be in the range of $2,400 million to $2,450 million. It expects adjusted net income to be in the range of $60 million to $70 million. It expects diluted earnings per share to be in the range of $1.67 to $1.94 on adjusted basis for the same period.
For the second-quarter, RH forecasts revenue to be in the range of $595 million to $610 million. It expects adjusted net income to be in the range of $13 million to $15 million. It expects diluted earnings per share to be in the range of $0.38 to $0.43 on an adjusted basis for the same period.
Operating cash flow turns positive
RH has generated cash of $125.06 million from operating activities during the quarter as against cash outgo of $90.35 million in the last year period.
Cash flow from investing activities was $167.24 million for the quarter as against cash outgo of $7.33 million in the last year period.
The company has spent $299.09 million cash to carry out financing activities during the quarter as against cash outgo of $0.01 million in the last year period.
Cash and cash equivalents stood at $80.15 million as on Apr. 29, 2017, down 65.85 percent or $154.52 million from $234.67 million on Apr. 30, 2016.
Debt moves up
RH has witnessed an increase in total debt over the last one year. It stood at $556.27 million as on Apr. 29, 2017, up 5.92 percent or $31.07 million from $525.21 million on Apr. 30, 2016. Total debt was 28.55 percent of total assets as on Apr. 29, 2017, compared with 69.22 percent on Apr. 30, 2016. Debt to equity ratio was at 0.89 as on Apr. 29, 2017, down from 4.69 as on Apr. 30, 2016.
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