I hope that you acted on your reevaluation. News outs today:
biz.yahoo.com
Thursday May 6, 8:01 am Eastern Time
Company Press Release
SOURCE: Restoration Hardware, Inc.
Restoration Hardware Announces First Quarter Sales and Estimated Loss
Per Share for First Quarter
CORTE MADERA, Calif., May 6 /PRNewswire/ -- Restoration Hardware, Inc.
(Nasdaq: RSTO - news) today announced net sales for the first quarter
ended May 1, 1999 of $60.0 million, an increase of 84.0% from net sales
of $32.6 million for the same period a year ago. Comparable store net
sales for the first quarter increased 18.4% from the same period a year
ago. At the end of the period, 41 stores were included in the comparable
store sales base versus 19 stores at the end of the same period a year
ago.
The first quarter included the ''Turn Back the Century'' sale and
generated a significant increase in furniture sales over the previous
year and over the Company's expectations. Sale items were marked down
between 10 to 25% off the regular retail price. While the sale event
bolstered overall sales and comparable store sales growth, the impact of
the merchandise discounts on gross margin was also more than
anticipated. In addition, as a customer service accommodation, the
Company honored the discount on some sales made prior to the sale event.
The estimated first quarter merchandise margin percentage for non-sale
merchandise was comparable to a year ago.
The Company was unable to immediately meet the extraordinary demand for
the sale items and many customer orders are expected to be manufactured
and delivered during the second quarter of 1999. The Company also
expects that gross margin in the second quarter will be negatively
impacted.
During the first quarter, the Company incurred higher procurement,
warehousing and distribution costs than anticipated. The Company
utilizes third party warehouses across the country to supply furniture
and lighting inventories to its stores. The Company was challenged
during the first quarter in managing the costs associated with these
warehouses and the handling of merchandise.
Due to the factors listed above, the Company expects to report a first
quarter net loss of between $.14 and $.18 per share and does not
anticipate that it will be able to recover this shortfall during the
remainder of the year. Final financial results for the first quarter
will be announced on May 19, 1999.
Stephen Gordon, Chairman and Chief Executive Officer said, ''We are
taking steps to lower the overall cost of goods as a percentage of sales
in future quarters. We are in the process of reducing the overall square
footage in third party warehouses and moving to a more centralized
distribution network that is expected to reduce the current overall
level of warehouse expenses, decrease total inventories per store and
improve customer service. These initiatives, coupled with the
implementation of a new warehouse management information system in the
third quarter of 1999 are not expected to affect current expense levels
until the second half of the year.''
During the first quarter, the Company opened a store in Tampa, Florida,
and a second store in Norfolk, Virginia. As of May 1, 1999, the Company
operated 67 retail stores in 24 states, the District of Columbia and
Canada. The Company expects to open seven stores during the second
quarter of 1999 and anticipates opening a total of 30 stores during
1999. The Company circulated approximately 700,000 Spring/Summer
catalogs during the first quarter of 1999. The Company anticipates
circulation of approximately four million catalogs during 1999. A copy
of the Company's Summer catalog featuring a variety of gift items, home
accessories, hardware, furniture and lighting can be obtained by calling
1-800-762-1005. In addition, the Company maintains a Web site at
www.restorationhardware.com designed to promote consumer awareness of
Restoration Hardware and generate store traffic. The Company plans to
commerce enable its Web site by late summer 1999 with over 400 SKUs
across all merchandise categories.
Restoration Hardware, Inc. is a specialty retailer of home furnishings,
functional and decorative hardware and related merchandise that reflects
the Company's classic and authentic American point of view.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: This release contains forward-looking statements regarding
anticipated quarterly results that involve risks and uncertainties.
Among the important factors which could cause actual results to differ
materially from those in the forward-looking statements are the
following: any accounting adjustments made during the quarterly close.
Other important risk factors include: competition, new product offerings
by competitors and price pressures; seasonality; fluctuations in
operating results and economic cyclicality; effects of changes in
merchandise mix; effects of weather; changes in consumer preferences;
the Company's ability to implement its growth strategy, including
management of growth and expansion of its distribution network; ability
to implement cost savings initiatives; dependence on key personnel,
independent manufacturers and key suppliers; international sources of
merchandise, and other factors detailed in the Company's filings with
the Securities and Exchange Commission including its recent filings on
Forms 10-K and 10-Q including those described in ''Risk Factors,''
''Management's Discussion and Analysis of Financial Condition and
Results of Operations'' under the captions ''Quarterly Results of
Operations and Seasonality'' and ''Liquidity and Capital Resources'' and
in ''Business'' under the captions ''Business Strategy,''
''Competition'' and ''Government Regulation.''
SOURCE: Restoration Hardware, Inc. |
