RH (RH) Q2 2026 earnings summary

Executive summary

• Achieved 8.4% revenue growth and 13.7% demand growth in Q2, despite tariff uncertainty and a weak housing market.

• Net income rose 79% year-over-year, with $81 million in free cash flow generated in the quarter.

• RH Paris opened to strong traffic, surpassing RH New York, and RH England gallery demand grew 76%.

• Continued global expansion with new galleries in Europe and the U.S., aiming for 7-9 new galleries per year.

Financial highlights

• Adjusted operating margin reached 15.1%, and adjusted EBITDA margin was 20.6%, both up 340 basis points year-over-year.

• Free cash flow for 2025 is forecasted at $250 million-$300 million.

• Inventory reduction of $200 million-$300 million targeted, with inventory turns expected to improve to mid-twos.

Outlook and guidance

• Fiscal 2025 revenue growth expected at 9%-11%, adjusted operating margin at 13%-14%, and adjusted EBITDA margin at 19%-20%.

• Third quarter 2025 guidance: revenue growth of 8%-10%, adjusted operating margin of 12%-13%, and adjusted EBITDA margin of 18%-19%.

• Guidance includes a -200 basis point margin impact from international expansion and a 90 basis point impact from tariffs.

• $40 million in revenue expected to shift from Q3 to Q4 and Q1 2026 due to delayed source book launch.