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Restoration Hardware Widens Loss Outlook

October 29, 2005|From Reuters

Restoration Hardware Inc. on Friday widened its loss outlook for the fiscal third quarter, citing a new sales program that shifted furniture revenue into the fourth quarter. The company also lowered its expectations for same-store sales.

The company, based in Corte Madera in the Bay Area, foresees a loss of 10 cents to 12 cents a share for the period ending Oct. 29, compared with its forecast in August of a loss of 3 cents to 5 cents a share.

Restoration Hardware also said it expected a decline in comparable-store sales, a key benchmark for retailers, in the range of 3% to 4%, after earlier forecasting an increase in the mid-single digits.

The company said its lowered financial outlook reflected a decline of 4 cents a share from the greater-than-planned shift in furniture sales to a new special-order program, as well as a decline of 4 cents a share from diminished lighting sales.

According to Reuters Estimates, analysts expected the company to post a loss of 4 cents a share, excluding exceptional items, for the third quarter.

Chief Executive Gary Friedman said special-order furniture sales were above expectations and likely to drive higher levels of revenue deferral from the fourth quarter into future quarters.

The company said it would release its third-quarter results on Nov. 22.

Shares of Restoration Hardware reached $6.03, up 25 cents, after earlier falling as much as 9%.

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