The luxury home furnishings retailer company reported adjusted earnings of 98 cents per share, lower than Wall Street's estimates for $1.39 per share. Revenue of $647.2 million missed analysts' estimates for $710.9 million.
Restoration Hardware projected 2016 first quarter earnings to range between 4 cents per share to 6 cents per share, while analysts were expecting earnings of 17 cents per share. Revenue is expected to range between $452 million to $456 million, lower than Wall Street's forecasts for $459.52 million.
The company's first quarter results will be negatively affected by higher investments to improve customers' experience, Restoration Hardware said in a statement. The company's RH Modern brand has been affected by shipping and production delays.
"While the initial response to RH Modern has been outstanding, we are experiencing shipping delays as certain vendors are struggling to ramp up production of this new product line," CEO Gary Friedman said in a statement. "We expect these vendors to be substantially caught up by the end of the first half."
Restoration Hardware stock is up by 4.15% to $40.64 in after-hours trading.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.
You can view the full analysis from the report here: RH