RH revenue falls with fulfillment shifts; ups outlook amid new luxury offering
RH reported better-than-expected top- and bottom-line results for its first quarter even as tariff-related sourcing shifts took a toll on its revenue.
The luxury furniture retailer raised its full-year revenue forecast and said it expects business to accelerate in the second half of the year, citing, among other things, new stores (including RH London) and the rollout of its new RH Estates offering. The luxury assortment and platform integrates bespoke and couture products, proprietary designs and expanded customization.
“With the launch of RH Estates, we are removing the barriers that have segregated taste from scale. RH chairman and CEO Gary Friedman wrote in a letter to shareholders. “We are amplifying the work of the world's most elite designers, artisans and manufactures on our global platform.”
The company is also introducing RH Bespoke, which offers a level of customization never seen before at scale, Friedman said during the company’s earnings call.
“Interior designers and architects can now specify dimensions for dressers, dining tables, sideboards and cabinets to fit the exact proportions of their architectural canvas,” he said.
Another new offering, RH Couture Upholstery, will integrate custom sizing with COM (Customer’s Own Material) into the RH ecosystem.
“We are giving designers the creative freedom to specify custom sizes and fabrics for sofas, sectionals, chairs, ottomans and beds,” Friedman said. “You source the fabric from anywhere in the world; we provide atelier level construction and craftsmanship.”
First Quarter
RH reported a net loss of $13.7 million, or a loss of $0.73 per share, for the quarter ended May 2, compared to net income of $8.04 million, or $0.40 per share, in the year-ago period. The adjusted loss per share was $1.97. Analysts were forecasting a loss of $2.12 a share.
First-quarter net revenue fell 1.7% to $800.32 million, topping the consensus estimate of $791.6 million. The company said its revenues were negatively impacted by approximately $45 million due to higher backorder and special order balances that were roughly $75 million higher than the year-ago period, primarily as a result of tariff-related resourcing, which pushed fulfillment into future periods.
“The company expects a similar elevated balance in Q2, with balances returning to normalized levels by the end of 2026, resulting in a revenue pick up of approximately $75 million in the second half of this year," RH stated.
Based on its better-than-expected first-quarter results, RH raised its fiscal 2026 revenue growth forecast to 4.5% to 8% from 4% to 8%. It expects an adjusted earnings before interest, taxes, depreciation and amortization margin of 14.2% to 16%, compared with 14% to 16% previously.
For the second quarter, it expects revenue growth of 0.5% to 2.25%.
