Restoration Hardware Posts Profit

Furniture, hardware and bath ware retailer Restoration Hardware Inc. said Monday that it climbed into the black in its fiscal second quarter as sales grew.

For the quarter ended July 29, the company earned $236,000, or a penny a share, compared with a net loss of $2.5 million, or 7 cents, a year earlier. Quarterly sales rose 24% to $179.3 million.

The recent quarter included a charge of $600,000 stemming from an internal review that found incorrect measurement dates in accounting for stock options grants, mostly made between 2002 and 2004. Also included in the quarter was a charge of $700,000 for stock-based compensation.

Analysts, on average, were expecting a net loss of 5 cents a share on sales of $171.2 million, according to a poll by Thomson Financial.

Same-store sales -- or sales at stores open at least a year -- rose 4.3% during the quarter. Direct-to-customer revenue increased 58% to $67.9 million.

For the third quarter, the company said it expected total sales to grow by 17% to 20%, and a net loss between 13 cents and 19 cents a share. The retailer also expects same-store sales to grow in the mid-single digits, and direct-to-customer sales to increase by 30% to 35%.

Analysts are expecting a loss of 13 cents a share on sales of $153.9 million.

For the full year, the company expects sales to grow by 19% to 23% and same-store sales growth in the mid-single digits.

Shares jumped 86 cents, or 14%, to $7 in after-hours trading. The stock had earlier closed up 2 cents at $6.14.