RH revenues, earnings miss; 2025 expansion plans include Paris debut
RH remains focused on its expansion even as it provided soft guidance amid a tough housing market and other macroeconomic pressures.
“While we expect a higher risk business environment this year due to the uncertainty caused by tariffs, market volatility and inflation risk, we believe it’s important to separate the signal from the noise,” said CEO and chairman Gary Friedman in a statement announcing the company's fourth quarter results.
The luxury home furnishings retailer is among those companies that are considered most likely to feel the impact of the Trump administration’s new tariffs due to its reliance on sourcing materials from Vietnam. The country will be hit with a new U.S. import tariff of 46% starting April 9.
“As we’ve done with prior tariffs, we will be working with our manufacturing partners to mitigate the impact to both our margins and costs to our customers, stated Friedman. “The fact is, we’ve been operating in the worst housing market in almost 50 years. Despite that fact, we are performing at a level most would expect in a robust housing market.”
Expansion
In 2025, RH plans to open seven “design galleries” (RH speak for stores), including locations in Oklahoma City; Detroit; San Diego, Calif.; Manhasset, N.Y.; and Montreal. The company will also make its Paris debut, on the city’s famed Champs-Élysées. Also in 2025, RH will open two outdoor galleries and two "new concept" galleries.
“We anticipate an inflection of our business in Europe as we begin to open in the important brand building markets of Paris in 2025, plus London and Milan in 2026, all with dramatic and brand building hospitality experiences, Friedman stated. “We believe post each opening we will begin to have the scale to support the necessary advertising investments to accelerate our growth in Europe.”
Fourth Quarter
RH posted adjusted earnings of $1.58 per share for the quarter ended Feb.1, below analysts' expectations of $1.89 per share.
Net revenues rose 10% to $812.4 million, missing estimates of $828.24 million. For the full fiscal year, RH reported net revenues of $3.181 billion, reflecting 5% growth.
For its current quarter, RH expects revenue growth of 12.5% to 13.5% and 10% to 13% for the full year. Both were less than analysts were expecting.
