RH (RH) Q2 2027 earnings summary

Executive summary

• GAAP net revenues reached $922.2 million in Q2 2026, up 2.6% year-over-year, exceeding guidance and driven by new Gallery openings and product transformation initiatives.

• Gross profit rose 8.7% to $445 million, with gross margin expanding 270 basis points to 48.2%, aided by $55 million in tariff refunds.

• Normalized adjusted EBITDA margin was 13.4%, above guidance, with $72.3 million in cash generated, including a $42 million Aspen JV distribution and excluding $69.2 million in tariff refunds.

• RH Estates, a new brand extension, launched with a 268-page source book, aims to double the brand's total addressable market by targeting traditional/classic luxury homes, which represent over 60% of the North American luxury market.

• International expansion continues with new global flagships in Paris, Milan, and London, with London showing strong early demand and expected to amplify brand recognition across Europe and the Middle East.

Financial highlights

• Q2 2026 net revenues: $922.2 million (+2.6% YoY); six months: $1.72 billion (+0.5% YoY).

• Q2 2026 gross margin: 48.2% (up from 45.5% YoY); six months: 45.1% (up from 44.6%).

• Q2 2026 net income: $60 million; six months: $46 million.

• Adjusted EBITDA for Q2: $179 million; six months: $235 million.

• Recognized $55.1 million in tariff benefits in Q2, with $13.9 million more expected in H2 to offset $50 million in unplanned supply chain costs from oil price spikes.

Outlook and guidance

• FY26 revenue growth expected at 5.5%-7%, adjusted EBITDA margin 15%-16.2%, and free cash flow, asset sales, and equity method investment distributions of $300-$400 million.

• Q3 FY26: Revenue growth 5%-6%, adjusted EBITDA margin 12.5%-13.5%.

• Q4 FY26: Revenue growth 16.1%-21.2%, adjusted EBITDA margin 19.7%-22.9%.

• International expansion pre-opening/start-up costs to impact adjusted EBITDA margin by -340 bps for FY26, -310 bps in Q3, and -190 bps in Q4.

• Management expects continued variability in financial performance due to macroeconomic uncertainty, including high interest rates, inflation, and luxury housing trends.