Restoration Hardware's Wear and Tear

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This is not my beautiful house. Over the last five years, shares of home décor retailer Restoration Hardware (Nasdaq: RSTO) have tanked some 80%. You might say the concept has gone promptly from hip to hip replacement, which is troublesome when you think of how well things should be going for the company.

Last night, the company missed its quarterly earnings target. The $0.21 a share earned was well below last year's $0.26 but also on the low end of the company's guidance that called for $0.20 to $0.24. That soft showing is huge because for the last few years the fourth quarter has been the only profitable period in the company's fiscal year.

Pity.

Stacked up against rivals Pier 1 (NYSE: PIR) or Williams-Sonoma (NYSE: WSM), the contrast is huge. Both of those have seen their stock more than double over those same five years.

That makes sense. These should be banner times for retailers looking to spice up our homes. Between a surging housing market and folks flocking to refinance and remodel their present digs, Restoration Hardware's fixtures should be brisk sellers. Instead, you have a company that produced a meager 0.7% increase in comps over the holidays.

Management is about the future. And personally, I've been impressed with the concept the two times I've ventured into the store, but the company needs to address the underperformance. If it can't flourish now, how will it fare once interest rates start climbing and the remodeling wave crashes? My free tip of the day? More Restoration. Less Hardware.

Have you done any shopping at Restoration Hardware lately? Where do you go to make your homestead spiffy? All this and more -- in the Building/Maintaining a Home discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz has never seen a complete episode of While You Were Out or Trading Spaces. He does not own shares in any companies mentioned in this story.