A Restoration Movement

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There was a time when home decor specialist Restoration Hardware (Nasdaq: RSTO) was a hot concept. Despite its laborious sounding moniker, the chain was once a hip hub of rustic bliss. Times, like shopping habits, change.

After closing out last year with a modest quarterly profit, Restoration Hardware is back where it usually is three quarters into the year -- in the red. And while there's some comfort in knowing that the company achieved a 9% spike in comps on a 21% jump in revenues -- and while the market seems pleased today -- a narrower loss is still a loss.

It shouldn't be that way. Rival Pier 1 Imports (NYSE: PIR) did warn earlier this month that profits would come in lower than expected -- but at least there were profits. Let's face it, if you're running a store geared towards accenting homes year-round, you're failing badly if folks are only shopping in numbers good enough to produce a profit during the holidays.

Williams-Sonoma (NYSE: WSM) releases its results next week, but like Pier 1, it too is expected to be comfortably in the black. Why not? Holidays are ripe with folks buying gifts for friends and families, but the rest of the year we make practical decisions when it comes to what we want in our homesteads. Pier 1 gets it. Williams-Sonoma gets it. Restoration isn't clicking on that front, and that's dangerous.

The housing market is booming and rock-bottom interest rates have folks scrambling to refinance and remodel. Yet, Restoration Hardware is guiding analysts to expect another loss in the current quarter. If the company peddled fruitcakes or tinsel, this would make perfect sense. It doesn't, and that just doesn't make sense. The company is trying to cater to spring cleanings, summer projects, and autumn makeovers, and all it has nailed is gift-wrapped winters?

That's not much of a present to investors. It better not stay that way.

If you're thinking of going to Restoration Hardware after you've found perfect digs, have you checked out our Home Center? If not, are you handy around the house? All this and more -- in the Building/Maintaining a Home discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz thinks baseball players are homesick. Why else would they always be trying to go home? He does not own shares in any company mentioned in this story.