Restoration Hardware Holdings Inc. said its fourth-quarter earnings suffered from a “pullback by the high-end consumer” and weak performance in markets hurt by energy prices.
Stock-market volatility may have hurt results in January, usually the biggest month of the quarter for furniture sales, the company said in its earnings release.
The upscale seller of home furnishings said earnings excluding items for the three-month period ended Jan. 30 were 99 cents a share, down from $1.02 in the year-ago period. That is below the guidance of $1.37 to $1.42 a share the company gave in December.
The Corte Madera, Calif., company said revenue rose 11 percent to $647.2 million, compared with guidance of $708 million to $718 million. Comparable-brand revenue increased 9 percent.
The company said the response to its new RH Modern concept has been “outstanding,” but it has experienced shipping delays as “certain vendors are struggling to ramp up production.”
Restoration Hardware has been investing in new product lines and replacing stores in malls with larger showrooms. at Cherry Creek Shopping Center last fall.
RH Modern and RH Teen have followed other new businesses like RH Interiors, RH Lighting and RH Baby & Child.
On Wednesday, the company said it would “optimize” its core business and doesn’t plan to introduce any incremental new businesses in fiscal 2016.
In its release, the company also said it plans to change its “promotional cadence” and launch a new membership program this spring.
Restoration Hardware noted that “much of how we behave promotionally is left over from the Great Recession.” Frequent promotional activity can skew customer behavior, with spikes in volume, the company said. The new membership model will include a set discount and an annual fee, “much like the high-end interior design trade.”
Restoration said it continues to see “underperformance in markets affected by energy, oil, or currency fluctuations.”
Restoration Hardware’s net income for the fourth quarter was $33.8 million, or 80 cents a share, down from $42.5 million, or $1.02 a share, in the year-earlier period.
