RH Announces Third Quarter 2025 Financial Results

December 14, 2025  by Karen Parrish in Business Strategy, Industry   

“We continued to generate industry leading growth with revenue increasing 9% in the third quarter, and up 18% on a two-year basis demonstrating the disruptive nature of our brand despite the worst housing market in almost 50 years, and the polarizing impact of tariffs.”

THIRD QUARTER 2025 HIGHLIGHTS

GAAP Net Revenues Increased 9% to $884M GAAP Net Income Increased 9% to $36M

GAAP Operating Margin of 12.0%, Adjusted Operating Margin of 11.6% EBITDA Margin of 16.2%, Adjusted EBITDA Margin of 17.6%

Free Cash Flow of $83M

Friedman continued,  “While a meaningful portion of our market share gains are coming from the fragmented To-The-Trade design showrooms, regional high-end furniture stores, and local independent boutiques, we are also gaining share from the better furniture-based national brands...”

“I would point out that our share gains on a two-year basis range from a low of 12 points to a high of 28 points. We find it fascinating that the market chooses to reward companies that set remarkably low expectations and slightly beat them, versus setting high expectations, as we do, and at times miss them, while still meaningfully outperforming our industry.”

RH UPDATED FINANCIAL OUTLOOK

The following is an updated financial outlook, reflecting the year-to-date performance and current trends:

Fourth Quarter 2025
— Revenue Growth of 7% to 8%
—Adjusted Operating Margin of 12.5% to 13.5% Adjusted EBITDA Margin of 18.7% to 19.6%
— The above outlook includes an approximate negative 200 basis point operating margin impact from investments and startup costs to support international expansion and a 170 basis point impact from tariffs, net of mitigations.

Fiscal Year 2025
—Revenue Growth of 9.0% to 9.2%
—Adjusted Operating Margin of 11.6% to 11.9% Adjusted EBITDA Margin of 17.6% to 18.0% Free Cash Flow of $250M to $300M
—The above outlook includes an approximate negative 210 basis point operating margin impact from investments and startup costs to support our international expansion and a 90 basis point impact from tariffs, net of mitigations.

TARIFFS ARE DISRUPTING SUPPLY CHAINS AND DRIVING HIGHER PRICES

Friedman continued, “There have been 16 different tariff announcements over the past 10 months that have resulted in significant resourcing, product delays, out of stocks, and driven multiple rounds of price negotiations and increases. Despite the chaos, we continue to demonstrate our ability to gain meaningful market share while aggressively investing in strategies that we believe will create long term strategic separation.”

View the full stockholder letter and report at the RH investor site.