RH (RH) Q2 2025 Earnings
Adjusted items include $3.597M asset impairments (inventory and property/equipment), $1.913M product recall costs, $1.233M reorganization-related costs, and $1.352M share of equity method investment losses
How Did RH Stock React to Q2 2025 Earnings?
S&P 500 over the same 30 days: +0.73%.
Did RH Beat Earnings? Q2 2025 Results
No. RH reported Q2 2025 earnings of $2.93 a share on Sep 11, 2025, missing the $3.22 consensus estimate by 8.9%. Revenue was $899.2M against a $905.4M estimate.
RH delivered a mixed fiscal second quarter, missing on both the top and bottom lines as tariff disruptions created a meaningful wedge between what customers ordered and what the company could ship. Adjusted EPS of $2.93 fell short of the $3.22 consensus estimate by 8.91%, while revenue of $899.15 million, up 8.4% year over year, came in just below the $905.36 million analysts had expected. The gap tells much of the story: RH logged demand growth of 13.7% in the quarter, but an approximately 5.4-point variance between demand and revenues, driven by tariff-related supply disruptions, kept recognized sales constrained. Adjusted operating margin expanded 340 basis points to 15.1%, a notable improvement even after absorbing a roughly 170 basis point drag from European expansion costs, headlined by the September opening of RH Paris on the Champs-Élysées. Looking ahead, management guided for full-year revenue growth of 9% to 11% and free cash flow of $250 million to $300 million, though the outlook does not yet account for potential tariffs from a newly announced furniture trade investigation.
- Demand increased 13.7% in Q2 despite tariff uncertainty and depressed housing market
- Two-year demand increase of 21% driving significant market share gains
- Adjusted operating margin expanded 340 basis points year-over-year to 15.1%
- RH England Gallery demand up 76% and online demand up 34% in Q2
- RH Paris off to a very strong start with Gallery traffic exceeding RH New York
“RH continued to generate industry leading growth in the second quarter as revenue increased 8.4%, and demand increased 13.7% despite the polarizing impact of tariff uncertainty and the worst housing market in almost 50 years.”
RH CEO, on the earnings call
What Was RH's Outlook in Q2 2025?
Fiscal 2025: Revenue growth of 9%-11%, adjusted operating margin of 13.0%-14.0%, adjusted EBITDA margin of 19.0%-20.0%, free cash flow of $250M-$300M. Includes approximately negative 200 basis point operating margin impact from international expansion investments and 90 basis point impact from tariffs net of mitigations. Q3 2025: Revenue growth of 8%-10%, adjusted operating margin of 12.0%-13.0%, adjusted EBITDA margin of 18.0%-19.0%, with approximately negative 270 basis point operating margin impact from international expansion and 120 basis point impact from tariffs. Updated outlook reflects $30 million in incremental tariff costs net of mitigation in H2, delay of new brand extension to Spring 2026, and 8-week delay of Fall Interiors Sourcebook shifting approximately $40 million in revenues from Q3 to Q4 and Q1 2026. Outlook does not include any new tariffs from the recently announced furniture investigation. Adjusted capital expenditures expected to decrease to $200M-$250M in 2026 and $150M-$200M in 2027 and beyond.
RH YoY Financials
| Metric | Q2 2025 | Q2 2024 | Year over year |
|---|---|---|---|
| Revenue | $899.2M | $829.6M | +8.4% |
| Gross Profit | $409.3M | $374.7M | +9.2% |
| Operating Income | $128.9M | $95.0M | +35.7% |
| Net Income | $51.7M | $29.0M | +78.6% |
Figures from SEC filings and company reports. Not investment advice.