Companies /Consumer Cyclical

RH - Class A

NYSE: RH Specialty Retail
$120.46
▼ $0.05 (−0.04%) today
Markets open · 9:41am ET

Q3 2025 Earnings

Reported Dec 11, 2025, 4:46pm ET · SEC source
$1.71
Miss −20.90%
EPS · est. $2.16 Adjusted

Adjusted EPS of $1.71 excludes a favorable contract termination settlement of $3.8 million (net), equity method investment losses, and related tax adjustments. GAAP diluted EPS was $1.83.

$883.8M
Beat +0.02%
Revenue · est. $883.7M
+36.5%
Beating market
RH vs S&P since report
2 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−6%0+6%Dec 11Dec 12report 4:46pm ETearnings−1.3%+3.2%
−6%0+6%Dec 11Dec 12earnings−1.3%+3.2%
RH +3.2%S&P 500 −1.3%
−6%0+6%Dec 11Dec 12report 4:46pm ETearnings−2.5%+3.2%
−6%0+6%Dec 11Dec 12earnings−2.5%+3.2%
RH +3.2%NASDAQ −2.5%
0+6%+12%Dec 10Dec 19report 4:46pm ETearnings−1.4%+10.6%
0+6%+12%Dec 10Dec 19earnings−1.4%+10.6%
RH +10.6%S&P 500 −1.4%
−6%0+6%+12%Dec 10Dec 19report 4:46pm ETearnings−1.7%+10.6%
−6%0+6%+12%Dec 10Dec 19earnings−1.7%+10.6%
RH +10.6%NASDAQ −1.7%
+5.67%
Day of report
+1.02%
Next session
+5.54%
One week
+38.00%
30 days

S&P 500 over the same 30 days: +1.54%.

Did RH Beat Earnings? Q3 2025 Results

RH delivered a mixed third quarter for fiscal 2025, posting revenue of $883.81 million, a hair above the $883.65 million consensus and up 8.9% year over year, but falling well short on the bottom line as adjusted diluted EPS of $1.71 missed the $2.16 consensus estimate by 20.90%. The primary culprit was a tariff-driven margin squeeze: unexpected duties on prior-period special and back orders delivered during the quarter, combined with higher-than-anticipated costs tied to the company's Paris gallery opening, pushed adjusted operating margin to 11.6%, below management's 12.5% guidance midpoint. CEO Gary Friedman has characterized the current environment as the worst housing market in nearly 50 years, yet analysts covering the stock note RH continues to gain share through curated product offerings and category expansion. Looking ahead, the company guided Q4 revenue growth of 7% to 8% and full-year free cash flow of $250 million to $300 million, while a major product transformation and new concept launch planned for Spring 2026 could provide a meaningful catalyst if housing conditions stabilize.

Key Takeaways
  • 9% revenue growth despite worst housing market in almost 50 years
  • 18% revenue growth on a two-year basis
  • Market share gains ranging from 12 to 28 percentage points on a two-year basis versus competitors
  • Inventory down 11% year-over-year and down $82 million sequentially
  • Net debt reduced by $85 million from Q2

“We continued to generate industry leading growth with revenue increasing 9% in the third quarter, and up 18% on a two-year basis demonstrating the disruptive nature of our brand despite the worst housing market in almost 50 years, and the polarizing impact of tariffs.”

RH CEO, on the earnings call

Forward Guidance & Outlook

Q4 FY2025: Revenue growth of 7% to 8%; adjusted operating margin of 12.5% to 13.5%; adjusted EBITDA margin of 18.7% to 19.6%. Q4 outlook includes approximately 200 basis point negative operating margin impact from international expansion investments/startup costs and 170 basis point impact from tariffs net of mitigations. Full-year FY2025: Revenue growth of 9.0% to 9.2%; adjusted operating margin of 11.6% to 11.9%; adjusted EBITDA margin of 17.6% to 18.0%; free cash flow of $250M to $300M. Full-year outlook includes approximately 210 basis point negative operating margin impact from international expansion investments/startup costs and 90 basis point impact from tariffs net of mitigations.

RH YoY Financials

Q3 2025 vs Q3 2024 · SEC filings Q3 2024 Q3 2025
$0$300.0M$600.0M$900.0M$811.7M$883.8MRevenue$361.3M$389.7MGross Profit$119.8M$105.9MOperating Income$33.2M$36.3MNet Income
$0$300.0M$600.0M$900.0MRevenueGross ProfitOperating IncomeNet Income

Figures from SEC filings and company reports. Not investment advice.