RH reported second-quarter 2026 GAAP net revenue of $922.2 million, an increase of 2.6% from the prior year and above the high end of the luxury home furnishings company’s guidance.
The growth rate accelerated by 4.2 percentage points from the first quarter as RH began seeing contributions from several growth initiatives that management has been developing across its product, retail, and international platforms.
GAAP net income totaled $60.2 million. EBITDA was $168.3 million, representing an 18.3% margin.
Adjusted EBITDA was $178.5 million with a 19.4% margin, although the figure included a $55.1 million tariff benefit. Excluding that benefit, normalized adjusted EBITDA was $123.5 million with a normalized margin of 13.4%.
RH generated $72.3 million of cash during the quarter, including free cash flow and a $42 million distribution from its Aspen joint ventures. That figure excludes $69.2 million of cash received from tariff refunds.
The company recognized $55.1 million of tariff benefits in second-quarter gross margin and expects another $13.9 million to be recognized during the second half. Management plans to use a portion of those proceeds to offset approximately $50 million of unplanned supply-chain cost increases.
RH expects fiscal 2026 revenue growth of 5.5% to 7.0%, adjusted EBITDA margin of 15.0% to 16.2%, and $300 million to $400 million from free cash flow, asset sales and distributions from equity-method investments.
The outlook incorporates an approximately 340-basis-point drag on adjusted EBITDA margin from pre-opening and startup costs associated with international expansion.
For the third quarter, RH expects revenue growth of 5% to 6% and adjusted EBITDA margin of 12.5% to 13.5%.
Fourth-quarter growth is expected to accelerate sharply, with revenue projected to rise 16.1% to 21.2% and adjusted EBITDA margin forecast at 19.7% to 22.9%. Management expects RH Estates, backlog conversion and new Galleries to contribute to that acceleration.
RH views the recently introduced RH Estates collection as a major growth opportunity. Management believes the brand extension has the potential to double RH’s total addressable market and expects the assortment to eventually represent approximately 50% of its overall offering. The current RH Estates assortment has an average price point approximately 45% higher than RH’s existing assortment.
International expansion remains a near-term drag on margins. RH expects the international impact to decline from approximately 450 basis points in the first half to 250 basis points in the second half and then decline further in 2027 as the company cycles investments in its Paris, Milan and London flagship locations.
RH London generated an interior design pipeline of almost $7 million during its first eight weeks.
Management also expects adjusted capital expenditures to decline from $240 million to $260 million in 2026 to $175 million to $200 million in 2027 as the company’s recent investment cycle moves past its peak.
KEY QUOTES:
“What we’ve learned on our 26 year journey of transforming Restoration Hardware, a nearly bankrupt company with a $20 million dollar market cap and a box of Oxydol laundry detergent on the cover of its catalog, into RH, the leading luxury home brand in the world with almost $4 billion in annual revenues, is that we always figured out how to monetize Extraordinary and Remarkable work, and we’ve found it very hard to monetize ordinary and unremarkable.”
Gary Friedman, Chairman and Chief Executive Officer of RH
