Shares of Restoration Hardware Holdings plummeted after-hours Wednesday after the company announced preliminary earnings results well below analyst estimates.
The luxury furniture retailer reported that it saw fourth quarter adjusted earnings of 99 cents per share on $647 million in revenue. Analysts expect Restoration Hardware to report earnings of about $1.39 on $711 million in revenue, according to a consensus estimate from Thomson Reuters.
Shares of Restoration Hardware fell as much as 23 percent in after-hours trading. The report apparently dragged Williams-Sonoma stock down as much as 8 percent after-hours in sympathy.
Gary Friedman, chairman and CEO of Restoration Hardware, attributed the company's worse-than-expected fourth quarter results to market volatility.
"Our sense is the increased volatility in the U.S. stock markets, especially the extreme conditions in January, which is historically our biggest month of the quarter for furniture sales, contributed to our performance," Friedman said in a statement on Wednesday.
Friedman added that the company is experiencing shipping delays with some of its vendors unable to keep up with production of its new product line. Canada, Texas, and Miami markets were particularly weak, he said, and the company will "begin to cycle the underperformance, and the negative drag should be mitigated."
Despite the slew of bad news, Friedman reported some good news on Restoration Hardware's growth front.
"Despite the economic headwinds, our two key growth strategies — the expansion of our product offer and the transformation of our real estate — are working exceptionally well," Friedman said.