RH Q2 Earnings Coverage Wrap-Up

RH just reported earnings, with shares initially up 12% following the report. Here are the key numbers:

• Revenue: $922.2 million, up 2.6% year over year
• Adjusted EBITDA: $178.5 million
• Adjusted EBITDA Margin: 19.4%
• Cash Generation: $72.3 million

Guidance:

• FY2026 Revenue Growth: 5.5% to 7.0%
• FY2026 Adjusted EBITDA Margin: 15.0% to 16.2%
• Q3 Revenue Growth: 5.0% to 6.0%
• Q4 Revenue Growth: 16.1% to 21.2%

Quick Read:

Revenue exceeded the high end of RH’s guidance, while management is forecasting a major acceleration to 16.1-21.2% growth in Q4 as RH Estates ramps.

The headline 19.4% adjusted EBITDA margin benefited from $55.1 million of tariff refunds, or roughly 600 basis points. Excluding that benefit, normalized adjusted EBITDA margin was 13.4%.

RH reports fiscal second-quarter earnings after today’s close, with shares already under significant pressure heading into the announcement. Wall Street expects earnings of $0.46 per share on $916.5 million in revenue, setting up a steep year-over-year decline in profitability.

The bigger question is whether management can show that the company’s expected second-half acceleration is taking shape. Investors should be watching the normalization of backordered shipments, early traction from RH Estates, and the impact of international expansion and associated pre-opening costs.

If those catalysts get pushed further out while costs remain elevated, investors will likely focus even more on RH’s balance sheet and deleveraging timeline.

RH currently trades at roughly 22x forward earnings with a market capitalization of around $2.59 billion, while prediction markets put the odds of an earnings beat at essentially 50/50.