Asia stocks: Japan, S. Korea hit record highs amid Fed easing bets; China dips
NEW YORK - RH (NYSE:RH) reported second quarter earnings that fell short of analyst expectations despite posting revenue growth, sending shares tumbling 10% in trading.
The luxury home furnishings retailer reported adjusted earnings per share of $2.93, missing the analyst estimate of $3.18. Revenue came in at $899.2 million, slightly below the consensus estimate of $906.58 million, though it represented an 8.4% increase YoY. The company noted that demand increased 13.7% during the quarter.
"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," said Gary Friedman, Chairman and CEO of RH.
Net income surged 79% for the quarter, and the company generated $81 million in free cash flow. RH maintained adjusted operating margin of 15.1% and adjusted EBITDA margin of 20.6%, both increasing 340 basis points compared to last year.
The company revised its fiscal 2025 guidance due to tariff uncertainties, now projecting revenue growth of 9% to 11% with adjusted operating margin between 13.0% and 14.0%. For the third quarter, RH expects revenue growth of 8% to 10%.
Tariff concerns weighed heavily on the outlook, with the company noting it has shifted sourcing away from China, expecting receipts to decrease from 16% in Q1 to 2% in Q4. The company is also responding to recent 50% tariffs imposed on India, which impacts 7% of its business.
RH highlighted the recent opening of RH Paris on September 5th as a significant milestone in its European expansion strategy, noting strong initial performance with traffic exceeding that of RH New York.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.