RH · Rh

RH reported mixed fourth quarter and fiscal year 2025 results, with revenue growth decelerating from the full year pace but profitability improving significantly. Fourth quarter GAAP net revenues of $843 million represented 3.7% growth, while full year revenues reached $3.44 billion with 8.1% growth. The company noted approximately $40 million in negative revenue impacts during the quarter, consisting of $30 million from higher backorder and special order balances due to tariff-related resourcing issues and $10 million from adverse weather. Profitability metrics showed substantial improvement, with fourth quarter GAAP net income increasing 107% to $29 million and full year net income up 72% to $125 million. Operating margins remained stable at 11.5% for the quarter and 11.3% for the full year. The company generated $55 million in free cash flow for the quarter and $252 million for the full year. Looking ahead, RH provided cautious guidance for fiscal year 2026 with revenue growth projected at 4-8% and adjusted EBITDA margin of 14-16%, which includes approximately 270 basis points of negative impact from pre-opening and startup costs for international expansion. First quarter 2026 outlook is particularly weak with revenue expected to decline 2-4% and adjusted EBITDA margin of 5.5-6.5%, including approximately 420 basis points of negative impact from international expansion costs. The company highlighted its international expansion plans across Europe and the United Kingdom, with gallery openings planned for 2026, and noted that its 2-year revenue growth of 15% has outpaced industry peers.