CORTE MADERA, CA -- Restoration Hardware, a luxury furniture and decorative hardware manufacturer, saw its shares fall as its large investors cashed out, taking profits on the company's incredible growth since it went public for the second time last year.
According to reporting by The Wall Street Journal, the investment firms responsible for the managment-led purchase of the company in 2008 and for taking it public again in 2012, sold $560 million shares in July and are in the process of selling all of their remaining shares.
Restoration Hardware stock has more than doubled since its Nov. 2012 IPO and second quarter adjusted net income jumped to $19.8 million from $12.2 million for the same period last year.
In a financial statement annoucing second quarter earnings, Gary Friedman, Restoration Hardware chairman and co-CEO as well as member of the buyout group, said, “We continued to take market share during the quarter, delivering 30% growth in net revenues driven by a comp store sales increase of 26% on top of 31% comp growth last year and 17% percent in 2011. We significantly expanded our operating margin and increased adjusted net income by 62% while at the same time continued to invest in our infrastructure and new businesses to support our future growth.”
With long-term expectations of continued growth and momentum for the company, co-CEO Carlos Alberini, noted Restoration Hardware's design galleries will be an intergral part of its expansion plans.
"Our existing Full Line Design Galleries continue to be highly productive and are driving strong results in each market," Alberini said. "Los Angeles and Houston delivered comps in excess of 29% during the second quarter, ahead of the rest of our chain. Also, our new locations in Scottsdale, Boston and Indianapolis continue to perform ahead of expectations. We plan to open new Full Line Design Galleries in Greenwich, Atlanta and Los Angeles in 2014 and are currently in negotiations for more than 30 locations in other key markets. We continue to believe we can open more than 10 locations a year, beginning in 2015. Our next generation Full Line Design Galleries will be larger and showcase our dominant assortment and new businesses, and they will provide opportunities for higher sales, increased earnings, lower capital investment and higher ROIC in each market.”
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