For the quarter ended Nov. 2, the Corte Madera, Calif., parent of Restoration Hardware reported profit reached $2.17 a share from 73 cents in the year-earlier quarter. Adjusted earnings were $2.79 a share versus $1.60. Shares outstanding declined 13% to 24.2 million.
Revenue reached $677.5 million from $636.6 million.
A survey of analysts by FactSet was looking for earnings of $2.13, or an adjusted $2.23, on revenue of $676.4 million.
Selling, general and administrative expense dropped to 28.7% of revenue from 32.7% in the year-earlier quarter.
At the same time, the company's GAAP operating margin widened 6.6 percentage points to 13.2%.
Inventory at the end of Q3 was $429 million, down 24% from $566 million in the earlier quarter.
The company does not expect the current tariffs to hinder its path to its financial goals. "We continue to receive pricing accommodations from vendors and have implemented price increases were necessary with little to no impact to our business," Chairman and CEO Gary Friedman said in a statement.
"We expect our operating margin to expand at least [two percentage points] in fiscal 2020 and now see a clear path to a 20% operating margin over the next several years," he said.
And the executive said RH is progressing toward the launch of RH International in 2021 or 2022. He said the company is "close to completing real estate transactions for five to seven initial locations across Europe."
For the fourth quarter, RH is looking for adjusted earnings of $3.50 to $3.62 a share on revenue ranging $703 million to $711 million.
The FactSet-derived survey is looking for adjusted earnings of $3.62 on revenue of $709.6 million.