RH eyes 20-21% EBITDA margin in FY25 as global growth, sourcing shifts and pricing moves offset housing headwinds.
RH's stock slids 23%, but rising EPS estimates and global expansion hint at long-term growth potential ahead.
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Despite recent volatility and high leverage, I remain confident in RH's long-term growth potential, supported by strong Q1 earnings and resilient revenue growth. RH's brand transformation is driven by international expansion, domestic capital-light models, and ecosystem enhancements, positioning the company for future cash flow growth. My projections show RH can meaningfully deleverage over the next 3-5 years as free cash flow increases and capital expenditures decline.
RH jumps 20.3% post-earnings as upbeat guidance, margin gains and strong global demand offset a slight Q1 revenue miss.
Note: RH FY'24 ended on February 1, 2025
RH (NYSE:RH) shares surged almost 20% premarket after the luxury furniture store's first quarter earnings impressed investors and it reaffirmed its full-year outlook despite challenges in the housing market and tariff uncertainty. The company posted earnings per share of $0.13 for the quarter, an improvement from a loss per share of $0.40 and significantly beating estimates of a loss per share of $0.07.
RH (NYSE:RH ) Q1 2025 Earnings Conference Call June 12, 2025 5:00 PM ET Company Participants Eri Chaya - President, Co-Chief Merchandising & Creative Officer and Director Gary G. Friedman - Chairman & CEO Jack M.
RH shares jumped as the company said it is taking steps to offset the effects of tariffs. The company topped Wall Street's first-quarter earnings expectations but missed sales estimates.
RH's fiscal first-quarter results are likely to reflect revenue growth, driven by product expansion and global rollout, despite margin headwinds.
Get a deeper insight into the potential performance of RH (RH) for the quarter ended April 2025 by going beyond Wall Street's top -and-bottom-line estimates and examining the estimates for some of its key metrics.
RH's transformation into a luxury lifestyle brand is underappreciated by the market, creating long-term growth potential and eventual re-rating. Short-term risks like tariffs, European expansion challenges, and macro headwinds are manageable, with management focused on strategic capital allocation. Innovative concepts—such as flagship galleries, hospitality, and branded residences—differentiate RH from typical furniture retailers and build brand equity.