RH (RH) Company Report

Luxury furniture retailer RH reported Q2 2025 revenue of approximately $899 million, an 8.4% year-over-year increase, which was slightly below analyst expectations, and non-GAAP profit of $2.93 per share, 8.9% below consensus estimates.
The company revised its full-year revenue growth outlook downward to 9% to 11% from an earlier forecast of 10% to 13%, with current guidance for the next quarter also falling short of estimates.
Despite the revenue miss and lowered guidance, RH's operating margin improved to 14.3% in Q2 2025, and free cash flow turned positive at $80.68 million, a significant improvement from the prior year.
Financial metrics reveal some concerns, including a low Altman Z-Score of 1.41 and a quick ratio of 0.29, suggesting potential bankruptcy risk and liquidity pressures, despite a strong gross margin of 44.5%.

Sep 11, 2025, 9:08 PM

Bloomberg

RH Reports Strong Q2 2026 Results and Updates Fiscal 2025 Guidance

Earnings

Guidance Update

New Projects/Investments

RH reported strong Q2 2026 financial performance, with revenue increasing 8.4% and demand up 13.7%, contributing to a 79% increase in net income and $81 million in free cash flow.
The company revised its fiscal year 2025 outlook, now expecting revenue growth of 9%-11% and adjusted operating margin of 13%-14%, with free cash flow projected between $250 million-$300 million. This guidance incorporates a $30 million cost from incremental tariffs and a $40 million revenue shift from Q3 to Q4 2025 and Q1 2026 due to delayed source book distribution.
RH is expanding its global presence, highlighted by the successful September 5th opening of RH Paris, which has seen traffic surpass RH New York, and plans for additional galleries in London and Milan in spring 2026, with the European expansion potentially doubling RH's size in 5-7 years.
To address tariff challenges, RH is significantly shifting its supply chain, aiming to reduce receipts from China to 2% by Q4 from 16% in Q1, and increasing US production of upholstered furniture to 52% by the end of fiscal 2025.

Sep 11, 2025, 9:00 PM

Transcript

RH Reports Strong Q2 2026 Results and Updates Fiscal Year 2025 Outlook

Earnings

Guidance Update

New Projects/Investments

RH reported strong financial performance for Q2 2026, with revenue increasing 8.4% and demand up 13.7%. The company also saw significant margin expansion, with adjusted operating margin reaching 15.1% and adjusted EBITDA at 20.6%.
The company revised its fiscal year 2025 outlook, now projecting revenue growth of 9% to 11%, adjusted operating margin of 13% to 14%, adjusted EBITDA margin of 19% to 20%, and free cash flow between $250 million and $300 million. This outlook incorporates an approximate 200 basis point operating margin impact from international expansion investments and a 90 basis point impact from tariffs.
Tariff uncertainty has led to a $30 million cost of incremental tariffs net of mitigation in the second half of 2025 and the delay of a new brand extension launch to spring 2026. RH is actively shifting sourcing out of China and India, and projects 52% of its upholstered furniture will be produced in the United States by the end of fiscal year 2025.
International expansion continues with the September 5th opening of RH Paris, which has shown a strong start, and plans to open galleries in London and Milan in spring 2026. RH anticipates its European and Middle Eastern operations could double the size of the company over the next five to seven years.
RH expects adjusted capital expenditures to decrease to a range of $200 million to $250 million in 2026 and $150 million to $200 million in 2027 and beyond. The company also plans to monetize approximately $500 million in real estate assets and convert $300 million in excess inventory into cash over the next 12 to 18 months.

Sep 11, 2025, 9:00 PM

Transcript

RH Reports Strong Q2 2026 Results and Updates Fiscal Year 2025 Guidance

Earnings

Guidance Update

New Projects/Investments

RH reported strong Q2 2026 results, with revenue increasing 8.4% and demand up 13.7%. Adjusted operating margin reached 15.1% and net income increased 79%. The company provided revised fiscal year 2025 guidance, expecting revenue growth of 9% to 11% and adjusted operating margin of 13% to 14%, with free cash flow between $250 million and $300 million.
The company is actively managing tariff impacts, anticipating a $30 million cost of incremental tariffs net of mitigation in the second half of fiscal 2025. Sourcing from China is expected to decrease from 16% in Q1 to 2% in Q4, and RH is addressing 50% tariffs imposed on India, which affects 7% of its business.
International expansion is progressing, highlighted by the successful September 5th opening of RH Paris, which has seen traffic exceed RH New York and a strong design pipeline. RH England's demand increased 76% in Q2, and the company plans to open four additional design galleries in North America in 2025, with London and Milan openings slated for spring 2026.
The launch of a new brand extension, originally planned for the second half of 2025, has been delayed to spring 2026 due to tariff uncertainty, and the fall interior source book was also delayed by eight weeks.

Sep 11, 2025, 9:00 PM

Transcript

RH Reports Strong Q2 2026 Results, Updates Fiscal Year 2025 Guidance, and Details International Expansion

Earnings

Guidance Update

New Projects/Investments

RH reported strong Q2 2026 results, with revenue increasing 8.4% and demand up 13.7%, alongside a 79% increase in net income and $81 million in free cash flow.
The company revised its fiscal year 2025 outlook, projecting revenue growth of 9% to 11%, adjusted operating margin of 13% to 14%, and free cash flow between $250 million and $300 million.
International expansion is progressing with the successful opening of RH Paris on September 5th, which has seen traffic exceed RH New York and a design pipeline greater than the first five European galleries combined in their initial six days. RH expects European expansion to double its size over the next five to seven years.
Tariffs continue to impact the business, with an estimated $30 million cost of incremental tariffs net of mitigation in the second half of 2025, leading to a delay in the new brand extension launch to spring 2026 and a shift of $40 million in Q3 revenues to Q4 and Q1 2026. The company is shifting sourcing out of China and increasing US upholstered furniture production to 52% by the end of fiscal 2025.

Sep 11, 2025, 9:00 PM

Transcript

RH Reports Strong Q2 2025 Results and Updates Fiscal 2025 Guidance

Earnings

Guidance Update

New Projects/Investments

RH reported strong financial results for Q2 2025, with net income increasing 79% to $51.7 million on net revenues of $899.2 million, an 8.4% increase, and generated $80.7 million in free cash flow.
Demand for Q2 2025 increased 13.7%, and on a two-year basis, revenues increased 12% and demand increased 21%.
The company revised its fiscal year 2025 outlook, now expecting revenue growth of 9% to 11%, adjusted operating margin of 13.0% to 14.0%, adjusted EBITDA margin of 19.0% to 20.0%, and free cash flow of $250 million to $300 million. This revision is partly due to a $30 million cost of incremental tariffs and delays in product launches and sourcebook distribution.
RH continues its global expansion, having opened RH Paris on September 5, 2025, and plans to open four additional Design Galleries in North America for the remainder of 2025.

Sep 11, 2025, 8:18 PM

8-K

RH Amends Credit Agreement, Extends Maturity Date

Debt Issuance

RH's wholly-owned subsidiary, Restoration Hardware, Inc., entered into a Second Amendment to its Twelfth Amended and Restated Credit Agreement on July 31, 2025, which extends the maturity date by four years.
The amended Credit Agreement provides a revolving line of credit of up to $600 million, with sub-limits of $10 million for Restoration Hardware Canada, Inc. and $100 million for RH Geneva Sàrl.
An accordion feature allows for an additional $300 million, potentially increasing the total revolving line of credit to up to $900 million, and First-Citizens Bank & Trust Company has joined as a new lender.
A Consolidated Fixed Charge Coverage Ratio (FCCR) Covenant, set at 1.0, applies if unused credit availability falls below the greater of $40 million or 10% of total borrowing availability.

Aug 6, 2025, 12:00 AM

8-K

RH publishes Q1 fiscal 2025 results and confirms FY2025 outlook

Earnings

Guidance Update

New Projects/Investments

Q1 fiscal 2025: revenue +12%, adjusted EBITDA margin 13.1%, and positive free cash flow $34 M
Maintained FY2025 guidance: 10–13% revenue growth, 20–21% adjusted EBITDA margin, $250–$350 M free cash flow; Q2 guidance: 8–10% revenue growth, 20.5–21.5% EBITDA margin
International demand acceleration: RH England Gallery demand +47%, online demand +44%; Europe comparable Galleries demand +60%; RH Paris opening early September on Champs-Élysées
Supply‐chain rebalancing to mitigate tariffs: China sourcing down from 16% in Q1 to 2% in Q4; aiming for 52% U.S. and 21% Italy upholstery production by end of FY25
Strategic capital actions: $2.2 B of share repurchases financed by debt, with $500 M real estate equity and $200–$300 M excess inventory to monetize

Jun 12, 2025, 12:00 AM

8-K

RH Appoints Lisa Chi as President, Co-Chief Merchandising & Creative Officer

Management Change

Executive Compensation

RH has appointed Lisa Chi as President, Co-Chief Merchandising & Creative Officer, effective May 20, 2025.
Lisa Chi rejoining RH brings extensive merchandising experience, having previously served in senior roles at RH and leading merchandising operations at Arhaus.
Her compensation package includes a $1,000,000 base salary with guaranteed annual increases, RSU grants of 20,000 shares, and options for 50,000 shares along with participation in a leadership incentive program.

May 27, 2025, 12:00 AM

8-K

RH Clarifies Tariff Impact and Updates Fiscal 2025 Outlook

Guidance Update

Revenue Acceleration/Inflection

RH provided clarifications on the reciprocal tariffs announced on April 2, 2025, noting that its sourcing shift to Vietnam and its own North Carolina factory has mitigated the impact of the long-standing 25% tariffs from China.
The company reported an 18% net revenue increase in the fourth quarter (on a 13‐week comparable basis) and a 19% increase in RH Brand demand in January, reflecting strong market performance despite challenging conditions.
RH introduced a free cash flow outlook for fiscal 2025 in the range of $250M to $350M, highlighting its positive financial guidance amid market volatility.

Apr 8, 2025, 12:00 AM

8-K

Earnings Transcripts

Quarterly earnings call transcripts for RH.

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