Restoration Hardware Notches a New Sales Record – But Signals Caution

Restoration Hardware (Corte Madera, CA) reported a record $957 million in revenue for its first quarter, an 11% increase from the year-ago period. The retailer’s net income increased 54% to $201 million.

In a letter to shareholders, CEO Gary Friedman said the company expects the next several quarters to pose a “short-term challenge” as pandemic-driven spending behaviors begin to change. RH is also forecasting SG&A (selling, general and administrative) expenses to peak in the second and third quarters as it returns to mailing Source Books after a two-year hiatus.

In the letter, Friedman also lamented the return to discounting across the home furnishings landscape:

“While there has been a widespread return to discounting across our industry as evidenced by the barrage of sale emails filling our inboxes, and there may be short-term risk of market share loss by choosing not to promote, we believe there is certain long-term risk of brand erosion and model destruction once you begin down that path.”