RH Q2 Fiscal 2026 Earnings Call: RH Estates Drives Raised Outlook
Source Tradingkey
Key Takeaways
- RH reported Q2 fiscal 2026 GAAP net revenue of $922.2 million, up 2.6% year over year and representing a 4.2-point acceleration from Q1.
- Normalized adjusted EBITDA margin was 13.4%. RH generated $72.3 million of cash, including free cash flow and a $42 million distribution from its Aspen joint ventures, excluding tariff refunds.
- Management updated fiscal 2026 guidance to 5.5%–7.0% revenue growth, a 15.0%–16.2% adjusted EBITDA margin, and $300 million–$400 million from free cash flow, asset sales and equity-method investment distributions.
- RH expects RH Estates to contribute 2 percentage points to Q3 revenue growth and 8 points to Q4 growth as distribution expands, inventory availability improves and the collection moves onto gallery main floors.
- Management believes RH Estates could double the brand’s total addressable market and represent 50% of RH’s offering within five years. Its current average price point is 45% above RH’s existing assortment.
- International expansion remains a material earnings drag, but management expects the impact to decline from 340 basis points in fiscal 2026 to 150 basis points in fiscal 2027 as RH cycles flagship opening costs.
Core Financial Data
| Metric | Q2 fiscal 2026 result | Change or context |
|---|---|---|
| GAAP net revenue | $922.2 million | Up 2.6% year over year; 4.2-point acceleration from Q1 |
| Normalized adjusted EBITDA margin | 13.4% | Above the high end of company guidance |
| Cash generated | $72.3 million | Includes free cash flow and a $42 million Aspen joint venture distribution; excludes tariff refunds |
| Tariff benefit received in Q2 | $55.1 million | Part of a total expected $69.2 million benefit |
| Additional tariff benefit expected in H2 | $13.9 million | Included in the total expected tariff benefit |
| Unplanned supply-chain cost increases | $50 million | Attributed to a sustained oil-price increase linked to conflict in the Middle East |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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