Restoration Hardware - (RSTO) Message Board

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Non-Tech : Restoration Hardware - (RSTO)

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To: Glenn Petersen who wrote (63)	12/14/2002 11:12:40 AM
From: Glenn Petersen	Read Replies (1) of 76

Makers & Breakers: How Quaint Christopher Helman, 12.23.02 forbes.aol.com Source: FT Interactive Data via FactSet Research Systems. As a home furnishings chain, Restoration Hardware (nasdaq: RSTO - news - people ) (8) prefers the classic American look. The stock is up 28% this year. Struggling to avoid Chapter 11, and under President Gary Friedman, brought in from Williams-Sonoma, the 105-store retailer has a classic business problem: lots of competition. It is working a tough niche against the likes of Pottery Barn and Crate&Barrel. Then there are the accounting questions. Restoration claims that losses are shrinking, to $13.2 million for 2002's first three quarters, from $24 million for the year-before period. But the company would have shown less progress without adding a $13.5 million "income tax benefit" to the bottom line. Restoration explains that this bizarre item is a noncash number representing how much it could save in future profitable quarters by carrying forward today's losses. If it remains unprofitable, Restoration will be facing a big charge. Somehow, the company expects 41 cents a share in the Christmas quarter. But it hasn't made money since 1998 and lost 45 cents in the 2001 holiday quarter. It has just $2 million in cash left. Short the stock and cover at $4.

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