Net revenues increased 11% to $957 million vs. $861 million in the same period in 2021. Net income came in at $201 million, a 54% increase compared with $131 million last year, while adjusted diluted earnings per share for the quarter were $7.78, a jump of 59% from $4.89.
In the executive statement accompanying the results, Gary Friedman, chairman and CEO of RH, said the Corte Madera, Calif.-based retailer saw value in going against the grain, and the quarter’s results show the wisdom of that mindset.
“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,” Friedman said. “It’s that discipline and long-term thinking that has enabled us to set new standards for financial performance in the home furnishings industry and our results now reflect those of the leading luxury brands as first quarter adjusted operating margin reached 24.7% vs. 22.6% a year ago.”
Friedman called 2022 “The Year of The New” for RH and noted a number of initiatives that have either taken place or are on the books for this year, including the opening of RH San Francisco and the launch of RH Contemporary as well as the unveiling of the first RH Guesthouse in New York; the debut of The World of RH, its new digital portal; the lift-off of RH1 and RH2, customized Gulfstream G650 and G550 that will be available for charter later this year; the christening of RH3, a luxury yacht that will be available for charter in the Mediterranean and Caribbean; and new Galleries planned in the UK, in Palo Alto, Calif. and more.
Noting the softening in consumer demand, Friedman adjusted second quarter guidance: net revenue down in the range of 1% to 3% (up 39% last year), with adjusted operating margin in the range of 23% to 23.5%, vs. 26.6% a year ago. Fiscal 2022 net revenue growth in the range of 0% to 2%, compared with up 32% last year, with adjusted operating margin in the range of 23% to 24%, compared with 25.6% a year ago.
Thomas Lester is Retail Editor for Furniture Today and Digital/Managing Editor for Home Accents Today. A graduate of Emory & Henry College’s Mass Communications program, Lester spent a dozen years working for newspapers in Virginia and North Carolina covering an array of subjects, ranging from community news, government, education, ACC sports, professional baseball and more before joining Furniture Today in 2013. Reach out to me with your story ideas, tips and more at firstname.lastname@example.org.