RH Reports Fourth Quarter and Fiscal Year 2024 Results

April 2, 2025  by Karen Parrish in Business Strategy, Industry   

On a comparable 13-week basis, Net Revenues Increased 18%, Operating Income Increased 25% and Adjusted Operating Income Increased 57%

Q4 Total Demand Increased 17%, and RH Brand Demand Increased 21%, in each case on a comparable 13-week basis

FISCAL 2024 HIGHLIGHTS

GAAP Net Revenues of $3.181B Increased 5.0%, GAAP Operating Margin of 10.1%, Adjusted Operating Margin of 11.3%, GAAP Net Income of $72M, Adjusted Net Income of $107M, and Adjusted EBITDA Margin of 16.9%

On a comparable 52-week basis, Net Revenues Increased 6.8%

2024 Total Demand Increased 9% and RH Brand Demand Increased 12%, in each case on a comparable 52-week basis

TO OUR PEOPLE, PARTNERS AND SHAREHOLDERS

Visit the Investor site at RH.com to read the complete Shareholder Letter from Chairman & CEO, who communicates more in depth information about the business environment and  expectations looking back and moving forward.

OUTLOOK

Based on our current plans and the uncertain macroeconomic environment we are providing the following financial outlook for the full year and first quarter.

Fiscal Year 2025

Revenue Growth of 10% to 13%
Adjusted Operating Margin of 14% to 15%
Adjusted EBITDA Margin of 20% to 21%

First Quarter 2025

Revenue Growth of 12.5% to 13.5% Adjusted Operating Margin of 6.5% to 7.0%

Adjusted EBITDA Margin of 12.5% to 13.0%

The above outlook includes a negative 160 to 200 basis point Operating Margin impact from investments and startup costs to support our international expansion.

Our Product Transformation Plans for 2025 include:

The introduction of our new RH Outdoor Sourcebook, featuring the most dominant assortment of high-quality outdoor furniture in the world arrived in homes early February with eight new furniture collections, an exciting new textiles offering, plus a significantly improved in-stock position to start the season versus a year ago.

The introduction of our new RH Interiors Sourcebook arrived in homes mid-February though early March, featuring 42 new collections across furniture, upholstery, lighting, rugs and textiles, as well as an additional 15 new collections launched on RH.com. While we had planned a higher amount of new collections for this book, due to the rapidly changing economic outlook, we believed it was prudent to delay some of our introductions until later in the year.

The launch of a significant new brand extension in the Fall of 2025 that we believe will meaningfully expand the market size and share of the RH brand. This new brand extension will include a new Sourcebook, a significant website presence and two freestanding Galleries dedicated to the New Concept. Our plan includes integrating RH Couture Upholstery by Dmitriy & Co. and RH Bespoke Furniture by Joseph Jeup into this new brand extension, enabling greater exposure and market reach versus standalone concepts. We will be sharing more details of this exciting new venture during our first quarter earnings call.

As communicated last quarter, we do not expect a negative impact to results related to previously announced increased tariffs on products from China, Canada or Mexico. As it relates to reciprocal and other tariffs that will be announced today, 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.

We believe it is also important to note that we have been manufacturing upholstered furniture in our own North Carolina factory for over ten years, and have recently expanded the facility, doubling our capacity. We are currently projecting that 48% of our upholstered furniture will be produced in the U.S., 21% of our upholstered furniture will be produced in Italy, and 14% of our total business will be produced in the U.S. by the end of this year.

Now let me shift your attention to the expansion of our platform.

PLATFORM EXPANSION

We continue to open the most inspiring and immersive physical experiences in our industry, and some would say the world. Spaces that are a reflection of human design, a study of balance, symmetry and perfect proportions. Spaces that blur the lines between residential and retail, indoors and outdoors, home and hospitality. Spaces with garden courtyards, rooftop restaurants, wine and barista bars. Spaces that activate all of the senses, and spaces that cannot be replicated online.

Our plan to expand the RH brand globally, address new markets locally, and transform our North American Galleries represents a multi-billion-dollar opportunity.

Our Platform Expansion Plans for 2025 include:

The opening of 7 Design Galleries, 2 Outdoor Galleries, plus 2 New Concept Galleries.

The seven new Design Galleries are: RH Oklahoma City, The Gallery at the Oak and RH Montreal, The Gallery at Royalmount, both opening in the first half of this year. RH Paris, The Gallery on the Champs-Élysées, RH Detroit, The Gallery in Birmingham, RH Manhasset, The Gallery at the Americana, RH San Diego, The Gallery at University Town Center, and RH Palm Desert, The Gallery on El Paseo, are all opening in the second half of this year.

Additionally, we plan to expand our brand presence in Greenwich, Connecticut, by developing a multi-building RH Design Ecosystem inclusive of the existing RH Gallery at the Historic Post Office, a freestanding RH Outdoor Gallery that opened last month, plus a New Concept Gallery in the former Ralph Lauren building on Greenwich Avenue opening in the second half of this year.

We also plan to expand our brand presence in East Hampton this Summer by opening a freestanding RH Outdoor Gallery and are exploring plans to further enhance our Design Ecosystem with a New Concept Gallery in the near future.

As previously communicated, 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. We believe post each opening we will begin to have the scale to support the necessary advertising investments to accelerate our growth in Europe.