NEW YORK (TheStreet) - Shares of Restoration Hardware (RH - Get Report) plunged more than 12% in after-hours trading after the high-end home furnishings retailer announced the surprise departure of co-CEO Carlos Alberini as third-quarter comp sales missed expectations.
Alberini, 58, who has been in Restoration Hardware's C-suite since 2010, has accepted an offer to become chairman and CEO of Lucky Brand, which has been acquired by Leonard Green & Partners from Fifth & Pacific (FNP). The deal is expected to close next year.
Alberini will remain on at Restoration Hardware until Jan. 31, continuing to serve as a member of the board of directors and remain a significant shareholder in the company. Alberini currently holds a 3.2% stake in Restoration Hardware, according to Bloomberg data.
"On behalf of myself, the board and the entire RH team, I want to express our deepest thanks to Carlos for the numerous contributions he has made as Co-Chief Executive Officer," Gary Friedman, chairman and co-CEO said in a statement. "His leadership has been invaluable, and we are delighted with his continuing service as a member of our Board of Directors.""We are developing a transition plan and will initiate a search for Carlos' replacement shortly," Friedman added. Shares were dropping 12.4% to $57.20 in post-markets trading, despite the Corte Madera, Calif.-based company exceeding expectations for its third quarter results and raising guidance for its fiscal year. Restoration Hardware said adjusted profit rose 389% to $13 million, or 32 cents a share. The company reported GAAP net income of $9.5 million, or 23 cents a share, for the period. Analysts, according to Thomson Reuters, were expecting earnings of 28 cents a share. Revenue rose 39% to $395.8 million, beating expectations of $391 million. Comparable store sales rose 29% in the quarter, below the mid-30's expectations from Wall Street. The company expects full year adjusted earnings per share to be in the range of $1.71 to $1.74. Analysts had expected $1.71 a share. Written by Laurie Kulikowski in New York. Follow @LKulikowski