RH - Class A
Q2 2027 Earnings
Includes $13.6M non-cash loss from variable interest entities restructuring, exclusion of $17.98M share of equity method investment income (including $20M related to VIE restructuring), and $55.1M IEEPA tariff refund benefit in gross margins (excluded from normalized EBITDA but included in adjusted figures). Non-GAAP tax rate of 26.2% applied.
Market Reaction
Did RH Beat Earnings? Q2 2027 Results
RH delivered a blowout second quarter for fiscal 2026, with adjusted EPS of $2.70 beating the $0.46 Wall Street consensus by 483.28%, a result <a href="https://247wallst.com/investing/2026/09/10/live-will-rh-smash-q2-earnings-tonight-after-the-market-closes/">few analysts saw coming</a> heading into the print. Revenue of $922.15 million rose 2.6% year-over-year and edged past the $916.51 million consensus estimate, with management noting that growth accelerated 4.2 percentage points relative to Q1 as strategic initiatives gained traction. The single most consequential driver of the quarter was a $55.09 million IEEPA tariff refund benefit, equivalent to 600 basis points, recognized directly in gross margins, though the company flagged this as a discrete, one-time item and excluded it from normalized EBITDA. Looking ahead, RH raised its full-year revenue growth outlook to 5.5% to 7.0% with adjusted EBITDA margin of 15.0% to 16.2%, while projecting Q4 revenue growth of 16.1% to 21.2%, fueled in part by the early momentum of RH Estates, a new brand extension CEO Gary Friedman believes could double the company's total addressable market.
- Revenue growth accelerated 4.2 points over Q1 driven by growth strategies put into motion
- $55.1M IEEPA tariff refund benefit recognized in Q2 gross margins (600 bps)
- RH London design pipeline reached nearly $7M in first 8 weeks
- RH Estates Sourcebook arriving in homes late June through mid-July driving initial demand
“GAAP net revenues of $922.2 million exceeded the high end of our guidance increasing 2.6% versus last year and accelerating 4.2 points over the first quarter as our momentum begins to build from the significant growth strategies we have recently put into motion.”
RH CEO, on the earnings call
Forward Guidance & Outlook
Updated Fiscal Year 2026: Revenue growth of 5.5% to 7.0%; Adjusted EBITDA margin of 15.0% to 16.2%; Free cash flow, asset sales and distribution of equity method investments of $300M to $400M; approximately 340 bps negative adjusted EBITDA margin impact from international pre-opening and startup costs. Q3 2026: Revenue growth of 5.0% to 6.0% (inclusive of backlog reduction +2.5pts, RH Estates +2.0pts, new galleries and other +1.0pts); Adjusted EBITDA margin of 12.5% to 13.5%; approximately 310 bps negative adjusted EBITDA margin impact from international expansion. Q4 2026: Revenue growth of 16.1% to 21.2% (inclusive of backlog reduction +6.5pts, RH Estates +8.0pts, new galleries and other +4.0pts); Adjusted EBITDA margin of 19.7% to 22.9%; approximately 190 bps negative adjusted EBITDA margin impact from international expansion. International drag expected to decrease from 340 bps in fiscal 2026 to 150 bps in fiscal 2027. Adjusted capex expected to decrease from $240M-$260M in 2026 to $175M-$200M in 2027. Gallery opening costs expected to decrease from $48M in 2026 to $18M in 2027.
RH YoY Financials
Figures from SEC filings and company reports. Not investment advice.