RH Updates First Quarter Fiscal 2017 Guidance
The Company now expects net revenues in the range of
Adjusted net income for the first quarter of fiscal 2017 is now expected
to be in the range of
Adjusted diluted earnings per share is expected to be in the range of
Mr. Friedman continued, "As we look forward to fiscal 2017, we expect sales growth to continue, operating margins to expand, and to generate significant free cash flow. We remain confident in our ability to drive long-term sustainable growth, improved returns on capital, and tremendous value for our shareholders.”
The Company has not completed its quarter end closing and review process with respect to preparation of its first quarter 2017 financial results and the actual results may differ from the outlook provided in this press release. Further commentary on the Company’s first quarter financial results and 2017 outlook will be provided as part of its first quarter earnings release and video presentation.
Note: The Company’s adjusted net income and adjusted diluted earnings per share guidance does not include certain charges and costs. The adjustments to net income and diluted earnings per share in future periods are generally expected to be similar to the kinds of charges and costs excluded from adjusted net income and adjusted diluted earnings per share in prior periods, such as unusual non-cash and other compensation expense; one-time income tax expense or benefits; legal claim related expenses; reorganization costs including severance costs and related taxes; non-cash amortization of debt discount; and charges and costs in connection with the acquisition of Waterworks, among others. The exclusion of these charges and costs in future periods will have a significant impact on the Company’s adjusted net income and adjusted diluted earnings. The Company is not able to provide a reconciliation of the Company’s non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the uncertainty and variability of the nature and amount of these future charges and costs.
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP financial measures: adjusted net revenue, adjusted gross margin, adjusted operating income, adjusted net income, adjusted operating margin and adjusted diluted EPS (collectively, “non-GAAP financial measures”). We compute these measures by adjusting the applicable GAAP measures to remove the impact of certain recurring and non-recurring charges and gains and the tax effect of these adjustments. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measures used by the Company in this press release may be different from the non-GAAP financial measures, including similarly titled measures, used by other companies.
About
Forward-Looking Statements
This release contains forward-looking statements within the meaning of
the federal securities laws including statements related to: our future
financial outlook and guidance, including for the first quarter of
fiscal 2017, for fiscal year 2017 and over the longer term, including
net revenues, net income, cash flow, costs and expenses, inventory
mark-downs and reserves, operating margins, adjusted net income and
adjusted earnings and EPS; our expectation that our results of operation
in fiscal 2017 will include further increases in sales growth, operating
margin expansion and significant free cash flow; the anticipated
benefits and impact of our business investments and strategies including
efforts to optimize inventories and rationalize SKUs; the anticipated
benefit from mailings of our Source Books; our share repurchase program
or any expectations concerning any repurchases of our shares now or in
the future; our expectations concerning the Company's confidence in its
ability to drive long-term sustainable growth, improved returns on
capital, and tremendous value for our shareholders; and any statements
or assumptions underlying any of the foregoing. You can identify
forward-looking statements by the fact that they do not relate strictly
to historical or current facts. These statements may include words such
as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,”
“believe,” “may,” “will,” “should,” “likely” and other words and terms
of similar meaning in connection with any discussion of the timing or
nature of future events. We cannot assure you that future developments
affecting us will be those that we have anticipated. Important risks and
uncertainties that could cause actual results to differ materially from
our expectations include, among others, that the financial outlook
provided for the first quarter of fiscal 2017 does not represent actual
financial results and is subject to change based upon the preparation of
our financial statements; our allocation of capital toward different
initiatives including the repurchase of shares of our common stock; our
inventory optimization efforts and other current operational
initiatives; our ability to retain our ability to retain key personnel;
successful implementation of our growth strategy; our ability to take
advantage of the transaction with Waterworks; uncertainties in the
current performance of our business including a range of risks related
to our operations as well as external economic factors; the capital
requirements of our business and the possible need to fund our business
with the use of incremental borrowings and indebtedness; general
economic conditions and the impact on consumer confidence and spending;
changes in customer demand for our products; factors affecting our
outstanding convertible senior notes and the requirement to repay those
notes; our ability to anticipate consumer preferences and buying trends,
and maintaining our brand promise to customers; changes in consumer
spending based on weather and other conditions beyond our control; risks
related to the number of new business initiatives we are undertaking;
strikes and work stoppages affecting port workers and other industries
involved in the transportation of our products; our ability to obtain
our products in a timely fashion or in the quantities required; our
ability to employ reasonable and appropriate security measures to
protect personal information that we collect; our ability to support our
growth with appropriate information technology systems; risks related to
“conflict minerals” compliance and its impact on sourcing, if any, as
well as those risks and uncertainties disclosed under the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in RH’s most recent Form
10-K filed with the
View source version on businesswire.com: http://www.businesswire.com/news/home/20170511005477/en/
Source:
RH
Cammeron McLaughlin, 415-945-4998
SVP, Investor Relations
and Strategy
cmclaughlin@rh.com