Image source: Restoration Hardware.

High-end home furnishings retailer Restoration Hardware (RH -0.85%) has struggled along with many of its industry peers recently. Sluggish performance in high-end retail has stemmed from a loss of purchasing power among customers in many areas of the country that were tied to the success of the energy markets, and when oil prices plunged, so too did disposable income among many shoppers. Yet coming into its fiscal second-quarter financial report, Restoration Hardware shareholders are hopeful that some of the adverse trends that have held the company back will finally start to work in its favor again, and perhaps that will result in a boost to the stock price.

Let's take an early look at what we're likely to see from Restoration Hardware and what its future looks like.

Stats on Restoration Hardware

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Data source: Yahoo! Finance.

What's next for Restoration Hardware earnings?

In recent months, investors have grown even more pessimistic about the prospects for Restoration Hardware earnings. They've cut their full-year fiscal 2017 projections by more than $1 per share, and they've slashed their second-quarter earnings expectations by more than half. Yet even with those concerns, the stock has held its own, remaining essentially unchanged since late May.

The bad news for Restoration Hardware started after it released its fiscal first-quarter results in May. The company posted reasonably solid sales results, growing revenue by 8%, but comparable brand revenue growth of just 4% was much slower than the double-digit percentage pace investors had grown used to seeing. Even worse, Restoration Hardware surprised investors by reporting a loss for the quarter, which executives blamed on slowing conditions in the luxury consumer market as well as production delays that prevented the retailer from implementing its RH Modern strategy fully. Restoration Hardware's guidance for the quarter and the remainder of the year marked a huge departure from what those following the stock were looking to see, and comments about the company's long-term strategy fell on deaf ears as Restoration Hardware's share price fell more than 20% the day following the announcement.

Since then, though, investors have looked more favorably on Restoration Hardware's future prospects. In June, some speculated that the company should merge with fellow home-furnishings specialist Williams-Sonoma (WSM -0.19%) in order to create a powerhouse brand that could withstand competitive pressures from industry peers. Those rumors haven't proved out, but the opportunity for consolidation in retail certainly exists, and combining the two companies' store networks would create a formidable opponent for their rivals.

At the same time, Restoration Hardware has some investors actually excited about its own business prospects. In early August, analysts at Goldman Sachs upgraded the retailer and added it to its conviction list. Some of the motivation for the pick was simply the fact that expectations for Restoration Hardware are so low that anything other than a worst-case scenario could end up looking favorable for shareholders. Yet Goldman also believes that catalog offerings that feature member-based pricing, as well as the ramp-up of the RH Modern concept as the holiday season approaches, could help bolster sales for Restoration Hardware. Moreover, the retailer has done a good job in building an online presence, and that will be important to future growth.

In the Restoration Hardware report, shareholders will want to see proof that the positive comments its executives have made about future prospects will actually start to pan out. Although investors have been patient for the past several months, Restoration Hardware needs to show progress toward reaching its long-term goals. If it can't, then the share-price stability the retailer has enjoyed recently could come to an abrupt end.