=Restoration Hardware (RH) reported earnings on Wed 6 Sept 17 (a/h)

Restoration Hardware beats by $0.18, beats on revs; guides Q3 EPS above consensus, revs in-line; raises FY18 guidance

• Reports Q2 (Jul) earnings of $0.65 per share, excluding non-recurring items, $0.18 better than the Capital IQ Consensus of $0.47; revenues rose 13.2% year/year to $615.3 mln vs the $606.38 mln Capital IQ Consensus.
• Co issues guidance for Q3, sees EPS of $0.68-0.80, excluding non-recurring items, vs. $0.38 Capital IQ Consensus Estimate; sees Q3 revs of $575-590 mln vs. $598.78 mln Capital IQ Consensus Estimate.
• Co issues raised guidancefor FY18, sees EPS of $2.43-2.67 from $1.67-1.94, excluding non-recurring items, vs. $2.09 Capital IQ Consensus Estimate; sees FY18 revs of $2.42-2.46 bln from $2.40-2.45 bln vs. $2.44 bln Capital IQ Consensus Estimate.
• Comparable brand revenues increased 7% compared to a 3% decrease last year. "Our profit margins in the second quarter continued to be affected by efforts to
  rationalize our product offer and reduce inventories. Outlet revenues were up 46% in the quarter on significantly reduced margins versus last year."
• As previously discussed, we believe there is an opportunity to improve our financial results and return on invested capital by having a more disciplined approach to capital allocation. Accordingly, we plan to reduce our new Gallery opening cadence to a range of 3 to 5 per year, which is expected to drive high-quality sustainable growth, while lowering capital requirements and execution risk over the course of our real estate transformation. In fiscal 2017, we expect to open 3 next generation Design Galleries, all with an integrated food and beverage experience, and 3 to 5 Design Galleries in 2018.