RH shares fell 3.8% after earnings, signaling investor concern around still-modest underlying revenue growth and a heavily back-end-loaded outlook despite the quarter exceeding company guidance. The updated forecast also relies on tariff benefits and significant future contributions from RH Estates, new galleries, and international expansion.
- Second-quarter GAAP revenue was $922.2 million, up 2.6% year over year and above the high end of guidance; normalized adjusted EBITDA margin was 13.4%, also above guidance.
- Fiscal 2026 revenue growth guidance is 5.5%–7%, with adjusted EBITDA margin of 15%–16.2%; the outlook includes an approximately 340-basis-point margin drag from international preopening and startup costs.
- Third-quarter guidance calls for 5%–6% revenue growth, including a 2.5-point contribution from backlog reduction and a 2-point contribution from RH Estates, with adjusted EBITDA margin of 12.5%–13.5%.
- Fourth-quarter revenue growth guidance of 16.1%–21.2% highlights the degree of back-end loading, including 6.5 points from backlog reduction and 8 points from RH Estates.
- RH recognized a $55.1 million tariff benefit in the quarter and expects another $13.9 million in the second half, using proceeds to offset $50 million of unplanned supply-chain costs; free cash flow, asset sales, and investment distributions are forecast at $300 million–$400 million for fiscal 2026.
Community Discussion