Dive Brief:

• Restoration Hardware shares declined 2.3% Tuesday after the furniture retailer reported that Q4 earnings fell to $33.3 million, or 79 cents per share, from $42.5 million/$1.02 per a year ago. Revenue rose to $647.2 million from $582.7 million.

• The results missed FactSet’s estimate of earnings of $1.39 per share and revenue of $711 million. Q4 same-store sales rose 11% compared to a 20% increase year over year. 

• In a conference call with analysts, Restoration Hardware executives said the company is experiencing delays in shipments to customers due to vendor delays and inventory issues, especially with its new RH Modern line aimed at urban and millennial customers.

Dive Insight:

Until now, Restoration Hardware has been telling a comeback story, despite ignoring much of the conventional wisdom of today’s retail world. After struggling, going private to regroup and then going public again, the home furnishings retailer has dedicated its efforts to expanding its brick-and-mortar strategy and its huge paper catalog, leaving its social media strategy to customers and fans.

But Restoration Hardware has slipped of late, and logistics struggles are leaving customers waiting months for orders just as expectations of swift delivery have expanded to large items like furniture. An insider told the Wall Street Journal that Restoration Hardware rushed its RH Modern concept to market, forcing tight supplier deadlines that proved unmanageable.

Restoration Hardware Chairman and CEO Gary Friedman told analysts Tuesday that its inventory and shipping issues would be corrected by Q2 this year, and that the retailer is less concerned with with those snafus that it is financial pressures from capital markets and the strong dollar, which is tempering spending among wealthier consumers.

Restoration Hardware is especially affected by headwinds in South America (where markets are particularly sensitive to falling oil prices) and Canada, Friedman said. He also noted that the retailer’s new $100 membership program, dubbed the Grey Card, will help smooth out its sales everywhere.

“I think another important point to note is that the vast majority of our revenues are driven by customers who spend more than $500 with RH,” Friedman said. “And we believe the $100 cost of the program is set to maximize conversion.” 

Restoration Hardware expects Q1 revenue between $452 million to $456 million and adjusted earnings per share of 6 cents to 4 cents, compared to Wall Street estimates of revenue of $460 million and EPS of 17 cents. For its fiscal 2016 full year, the company expects revenue to grow by low to mid-single digits and flat or slightly lower EPS compared with the previous year.