by The ‘It’s good to be a retailer” edition, despite supply chain headaches
Net income for the luxury home furnishings retailer RH quadrupled to $184 million in its fiscal third quarter from $46 million for the same period a year ago. Earnings per share jumped to $5.88 from the previous $1.64. Net revenues increased 19% to $1.01 billion and gross margin increased to 50.2% from 48.4% for the same period a year ago.
“Our performance demonstrates both the desirability of our exclusive products and our ability to overcome the compounding supply chain challenges that led us to delay the launch of RH Contemporary, the opening of our first RH Guesthouse and several Galleries, and the mailing of our fall Source Books until spring of 2022,” CEO Gary Friedman said in the earnings release.
The Corte Madera, Calif.-based company upped its outlook for the full fiscal year slightly, tightening revenue growth guidance to 32% to 33% from the previous 31% to 33% and adjusted operating margin to the 25.3% to 25.5% range from the previous 24.9% to $25.5%.
Arhaus, new to the public-company realm, reported third-quarter net income of $14.4 million, or 13 cents per share, up from $783,000, or a one-cent loss, for the same period a year ago. Net revenue increased 68.7% to $203 million, “driven primarily by increased demand in both showroom and e-commerce channels as well as the delivery of orders in the backlog as our supply chain begins to catch up with client demand,” the company said. Comp-sales increased 61.3%.
“At a time when consumers are investing in their homes and looking for more functional living spaces, our globally curated assortment of hand-crafted products made by leading artisan vendors around the world is clearly resonating with consumers, said John Reed, co-founder and CEO of the Boston Heights, Ohio-based retailer.
The company ended the quarter with 77 showrooms in 28 states.
Hooker Furnishings posted a fiscal third-quarter net loss of $1.2 million, or 10 cents per share, vs. net income of $10.1 million, or 84 cents per share, for the same period in fiscal 2021. Consolidated net sales dipped 11% to $133.4 million.
The Martinsville, Va.-based company noted the revenue decline followed two consecutive quarters of double-digit sales and income gains and “was driven by significantly reduced shipments in the Home Meridian segment (HMI) due to Covid-related factory closures in Vietnam and Malaysia.” The HMI sales decrease, it said, was partially offset by double-digit sales gains in its Hooker-branded and domestic upholstery segments, both boasting five consecutive quarters of increases.
Consolidated operating income and margin decreased in the quarter primarily due to the sales declines at HMI, along with higher freight and product costs. HMI had three unusual charges during the period, including $2.6 million in one-time order cancellation costs to exit the ready-to-assemble category, a move it made to improve long-term profitability. It also saw higher than expected chargebacks with two club channel customers.
“Despite favorable demand for home furnishings and a historically strong order backlog triple typical levels … we were challenged by ongoing supply chain disruptions, especially the slower-than-expected reopening of Vietnam and Malaysia factories,” said Hooker CEO Jeremy Hoff. Factories there didn’t begin reopening until late in the quarter and at only about 25% capacity, he said, adding the company expects them to “approach 50% capacity in the near future.”
Inflation pressures were also a factor in reduced income, he added.
Lovesac, the Stamford, Conn.-based company best known for its modular “sactionals” upholstery and bean-bag-chair-like “Sacs,” reported an 11% increase in third-quarter net income to $2.8 million from $2.5 million. Earnings per share increased to 17 cents from 16 cents. Sales for the quarter ended Oct. 31, jumped 56.1% to $116.7 million. Showroom and internet sales increased nearly 70% and 40%, respectively.
“This performance is a testament to the team’s exceptional execution and affirms that our personalized shopping experience, whether in person, online or directly to customers’ homes through our recently launched mobile concierge service, is resonating and meeting customers where they prefer to shop,” said CEO and Founder Shawn Nelson.
“We generated strong top-line growth against the backdrop of macro supply chain disruption that reveals some of the many advantages of our unique business model with a concentrated SKU count and redundant manufacturing spread across multiple geographies, delivering customers’ orders within days.”
Conn’s reported third quarter net income more than doubled to $18.2 million, or 60 cents per share, from $7.4 million, or 25 cents per share in the third quarter last year. Total revenues were up 21.3% to $405.5 million and retail revenues jumped nearly 29% to $334.8 million. The Woodlands, Texas-based company, a credit-oriented retailer of furniture, bedding, appliances, electronics and other products, said its retail revenues increased nearly 29% to $334.8 million, and same-store sales increased 20.6% — 9.7% on a two-year basis. Furniture and mattresses was not the strongest category, but still managed an 18.8% same-store sales gain with revenues increasing nearly 29% to $106.8 million.
CEO Chandra Holt said the strong retail performance reflects “our success expanding our addressable market, as we serve customers across the spectrum of payment options, scale our digital platform and maintain -in-stock inventory levels …”
And one from this past Friday: Columbus, Ohio-based Big Lots posted a fiscal third-quarter net loss of $4.3 million, or 14 cents per share. The results fell into its guidance range but was down from a profit of $29.9 million, or 75 cents per share, for the third quarter a year ago.
Net sales decreased 3.1% to $1.3 million and were up 14.4% from two years ago. Big Lots said the decline from the previous year was driven by a 4.7% comp-store-sales decrease, after having lapped a 17.8% comp gain from the year before. On a two-year basis, comps increased 12.3%.
President and CEO Bruce Thorn said the company was pleased with the two-year comps “despite supply chain challenges and the expiration of stimulus benefits…
“Supply chain challenges will continue in the near-term, but we are aggressively managing through them by partnering closely with our manufacturing and transportation partners, strategically prioritizing receipts, creating new capacity with our forward distribution centers and CD by-pass program, and ensuring we are competitive recruiting and retaining DC associates.”
Big Lots also has taken “pricing actions and will continue to do so in response to volatile supply chain costs, while continuing to deliver great value for our customers,” he added.
