RH - Class A
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.73%.
Did RH Beat Earnings? Q2 2026 Results
RH came up short of Wall Street's expectations in its fiscal second quarter, posting adjusted earnings of $2.93 per diluted share against a consensus estimate of $3.22, a miss of 8.91%, while revenue of $899.15 million trailed the $905.36 million estimate by 0.69%, even as the top line grew 8.4% year over year. The shortfall arrived in a challenging environment that management characterized as the worst housing market in nearly 50 years, with tariff headwinds adding further pressure; RH absorbed roughly 170 basis points of margin drag from its European expansion and is now absorbing an estimated $30 million in incremental tariff costs in the back half of the year as it rapidly shifts sourcing away from China. Adjusted operating margin nonetheless expanded 340 basis points to 15.1%, reflecting meaningful operating leverage despite the headwinds. Looking ahead, RH guided full-year revenue growth of 9% to 11% with adjusted operating margin of 13% to 14% and free cash flow of $250 million to $300 million, as the company navigates tariff disruptions and the delayed rollout of a new brand extension now pushed to Spring 2026.
- Demand increased 13.7% in Q2 despite tariff uncertainty and depressed housing market
- Two-year demand growth of 21% indicating significant market share gains
- Adjusted operating margin expanded 340 basis points year-over-year
- RH England Gallery demand up 76% in Q2
- RH Paris early reads showing 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
Forward Guidance & Outlook
For fiscal year 2025, RH guides 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 $250M to $300M. This includes approximately 200 basis points of negative operating margin impact from international expansion and 90 basis points from tariffs net of mitigations. For Q3 2025, the company expects revenue growth of 8% to 10%, adjusted operating margin of 12.0% to 13.0%, and adjusted EBITDA margin of 18.0% to 19.0%, including 270 basis points of international expansion drag and 120 basis points of tariff impact. The outlook reflects $30 million of incremental tariff costs in the second half, the delay of a new brand extension to Spring 2026, and an 8-week delay of the Fall Interiors Sourcebook shifting approximately $40 million of revenue from Q3 into Q4 and Q1 2026. Adjusted capital expenditures are expected to decrease to $200M-$250M in 2026 and $150M-$200M in 2027 and beyond.
RH YoY Financials
Figures from SEC filings and company reports. Not investment advice.