Summary of Some Important Points from Restoration Hardware's Q1 Earnings Conference Call
Below are some highlights from Restoration Hardware's (NYSE: RH) Q1 results:
- Once again, we delivered industry leading sales growth with a net revenue increase of 38% on top of an 18% increase last year.
- strong top-line growth was an outstanding 41% comparable store sales increase, which was on top of a 26% comp increase in the year-ago quarter.
- less than 20% of our current assortment is displayed in our retail galleries today. And this number becomes even smaller when you consider the continued evolution of our assortment.
- We now have five Full Line Design Galleries, and the results from all of them continue to exceed our expectations.
- We just returned from a great ICSC conference in Las Vegas, and our deal pipeline is robust, a further confirmation of this enthusiasm.
- we now see opportunities to have Full Line Design Galleries in even more than the 50 markets that we originally targeted. Currently, we are in negotiations for sites in over 30 markets in North America, including New York, Chicago, Miami, Denver, Nashville, New Orleans, and San Diego, among many others.
- Richard Harvey has joined our team as Chief Merchandising Officer of our new business, RH Kitchen and Tableware. Richard had a distinguished career at Williams-Sonoma, most recently as President of the $1 billion Williams-Sonoma brand. our next generation Design Galleries and will be launched with a distinctive and unique catalog and online experience in late 2014.
- Also announced today is our plans to launch RH Antiquities. Our plan is to develop an online platform of curated antiques that will fill customer demand that we currently see in our galleries.
- plan is to launch this business in late 2014 or early 2015.
- We also operated fewer stores overall with 70 galleries open at the end of the first quarter versus the 74 we had open last year.
- Our direct sales increased 38% to $142 million on top of the 20% increase for the same period last year.
- All of our product categories experienced significant growth during the period, with our furniture business leading the way.
- Turning to expenses, our total adjusted SG&A expenses were at $97.3 million in the first quarter versus $75.9 million in the prior year.
- The increase in SG&A dollars was primarily driven by increases in employment, store opening and corporate occupancy costs and other variable expenses based on our increased revenue.
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