Analyst: Restoration Hardware To Add Kids' Stuff

Restoration Hardware Holdings Inc RH shares gained 4 percent Friday after the retailer forecast slower revenue growth but said it will launch two new businesses.

The luxury home furnishings retailer closed at $96.92, up $3.78. During the past 12 months, shares are up about 50 percent.

Details on the new businesses were sparse, but Stifel's David A. Schick said one may entail baby and children's products.

"The other may be bigger," Schick said, although he could offer little further insight, noting merely "the absence of talk of art gallery or apparel."

The company had planned to launch a kitchens and tableware business by the end of 2014. But Schick, who maintained a Hold rating on Restoration Hardware, said it's "continuing to research into the model."

Schick said the company's "story continues to be its ability to remain focused on home deco fashion while "managing through the inevitable macro pullbacks in discretionary spending" that will occur.

"The story hasn't changed much, but it has evolved" said Schick, noting a slight shift from emphasizing revenue growth to profits.

Restoration Hardware told investors that 2015 will be "bridge year" with revenue growth of about 15 percent and below expectations.