Investing.com -- Shares in Restoration Hardware (NYSE:RH) plunged nearly 20% in after-hours trading after the luxury home furnishing company unexpectedly swung to a loss and lowered its full-year outlook, amid considerable headwinds from the currency and commodity markets.
During the First Quarter of Fiscal Year 2016, the Corte Madera, California-based company lost $2.1 million or 0.05 per share, down considerably from net profits of $9.8 million or 0.23 per share over the same period a year earlier. For the quarter, Restoration Hardware increased comparable store sales 4% building on comparable store revenues of 15% last year.
Consequently, the company finished with revenues of $455.5 million over the three-month period ending in late-April, up considerable from sales of $422.4 million in last year's first quarter.
Analysts expected to see revenue of $452 million on earnings per share of 0.05.
Restoration Hardware CEO Gary Friedman blamed the weak quarter in part on a general slowdown in the luxury goods industry.
"The costs associated with RH Modern production delays and investments to elevate the customer experience, the timing of recognizing membership revenues related to the transition from a promotional to a membership model, and a more aggressive approach to rationalizing our SKU count to optimize inventory, are expected to negatively impact our fiscal 2016 adjusted diluted EPS outlook," Friedman said. "While there is uncertainty regarding the headwinds impacting revenues, we expect many of the cost and margin related issues to be short term in nature."
Moving forward, Restoration Hardware lowered its full-year outlook to a range of EPS of 0.28-0.33 and revenue between $505 and $520 million. Analysts have projected earnings per share of 0.79 on revenue of $532 million.
“Despite our recent difficulties, we remain the leading luxury home brand in the world, with a clear path to $4 billion to $5 billion in North American revenues with mid-teens operating margins," Friedman added. "The two fundamental strategies that get us there - the expansion of our product offer and the transformation of our real estate - remain well on track."
Restoration Hardware shares plummeted 6.86 or 19.22% to 29.20.