RH Announces First Quarter Results & Word from CEO

June 14, 2026  by Karen Parrish in Business Strategy, Industry   

FIRST QUARTER 2026 HIGHLIGHTS

GAAP Net Revenues Decreased 1.7% to $800.3M

GAAP Net Loss of $13.7M

EBITDA of $71.8M and EBITDA Margin of 9.0%

Adjusted EBITDA of $56.9M and Adjusted EBITDA Margin of 7.1%

Free Cash Flow of $13.3M

The Company’s First Quarter net revenues were negatively impacted by approximately $45 million due to higher backorder and special order balances that were approximately $75 million higher than the same period a year ago, primarily as a result of tariff related resourcing. The Company expects a similar elevated balance in Q2, with balances returning to normalized levels by the end of 2026, resulting in a revenue pick up of approximately $75 million in the second half of this year.

A LETTER FROM GARY FRIEDMAN, CHAIRMAN & CEO - TO OUR PEOPLE, PARTNERS AND SHAREHOLDERS

“First quarter revenues of $800.3M, and adjusted EBITDA margin of 7.1% exceeded the high end of our expectations in the first quarter despite back order and special order balances approximately $75 million higher than a year ago, primarily due to tariff related resourcing.”

“As a result of our better than expected first quarter results we are raising our outlook for fiscal year 2026 and providing the following outlook for the second quarter:

FISCAL YEAR 2026 OUTLOOK

- Revenue Growth of 4.5% to 8.0%

- Adjusted EBITDA Margin of 14.2% to 16.0%

- Adjusted Free Cash Flow of $300M to $400M

The above outlook includes an approximate negative 270 basis point Adjusted EBITDA margin impact from preopening and startup costs to support our international expansion.

We define adjusted free cash flow as free cash flow plus proceeds from asset sales.

SECOND QUARTER 2026 OUTLOOK

- Revenue Growth of 0.5% to 2.5%

- Adjusted EBITDA Margin of 11.5% to 13.0%

The above outlook includes an approximate negative 380 basis point Adjusted EBITDA margin impact from preopening and startup costs to support our international expansion.”

THE BRIDGE FROM HERE TO THERE

“How? Many will ask, in an economic environment like the one we are navigating through, do you get from your half one numbers to the half two numbers necessary to make the year? There are three parts that form the proverbial bridge to the other side, supporting the case for our business to accelerate from flat in half one, to up twelve percent in half two, as we’ve done many times before. We’ve listed them below:

Backlog reduction: +4.5 points

New store growth: +2.5 points

New concept growth: +5.0 points
(RH Estates)”

BUILDING THE FOUNDATION FOR A GLOBAL LUXURY BRAND

Friedman continues, “Similar to structures that stand the test of time, those rewarded with historical recognition and reverence, luxury brands are designed and built in the same fashion, on incredibly strong foundations. Both endeavors are considered hard and in many cases, impossible. They always require more time and capital, and are generally built by unrelenting and unrelatable individuals and teams.”

“You’ve heard us talk over the years about climbing the luxury mountain, how it’s not for the faint of heart, as the higher you climb, the air gets thin, and the odds become slim. We believe the work we are about to unveil is akin to taking those difficult last steps and gasping for those vital breaths. We believe the openings of RH Paris, Milan and London, arguably the three most immersive and inspiring brand experiences anywhere in the world, will form the foundation necessary to earn the respect and recognition of not only the European and UK customer, but a global one.”

“They communicate a sense of permanence, a brand that has been dedicated to crafting their skills over decades.”

THE LAST FOUNDATIONAL PIECE – RH ESTATES

MR. GORBACHEV, TEAR DOWN THIS WALL – RONALD REAGAN

“We believe that there are those with taste and no scale, and those with scale and no taste. The global design market has spent the last half-century comfortable with that division. It is an industry defined by exclusion versus inclusion. For decades, the highest echelon of home design - the masterfully tailored upholstery of Dmitriy & Co, the uncompromising bespoke casework of Joseph Jeup, the classical grandeur of Dennis & Leen, the meticulous reproductions of Formations, the artisanal fixtures of Waterworks, and the iconic designs of Michael Taylor (who Architectural Digest named one of the greatest interior designers of all time) - has been hidden.”

 “Trapped behind a metaphorical iron curtain. This curtain is the closed-door, trade-only showroom network. Unless you hold a professional license or hire a gatekeeper, you are forbidden from seeing, experiencing, or purchasing the finest expressions of human craftsmanship.”

“The public is left outside, while some of the very best design and quality remains hidden inside. Nearly forty years ago, standing at the Brandenburg Gate, a former American president looked out at a divided world and issued a defiant, historic decree: “Mr. Gorbachev, tear down this wall.” “

“Today, we look at the luxury home industry and ask the same. With the launch of RH Estates, we are removing the barriers that have segregated taste from scale. We are amplifying the work of the world's most elite designers, artisans and manufactures on our global platform. This is not a compromise of quality; it is a liberation of mastery. By uniting these legendary ateliers and elevating their work in architecturally significant spaces, we are providing access to some of the most beautifully designed, highest quality classic, contemporary and modern furniture in the world.”

“Pieces that not only furnish a home, those that define it.”

“But tearing down the wall means more than just opening the doors. It means eliminating the creative limitations that have historically forced designers to choose between our scale and the uncompromising specificity of trade-only showrooms.”

“To empower the design community, we are introducing RH Bespoke Furniture and RH Couture Upholstery. With RH Bespoke, we are offering a level of customization never seen before at scale. Interior designers and architects can now specify dimensions for dressers, dining tables, sideboards, and cabinets to fit the exact proportions of their architectural canvas.”

“Simultaneously, RH Couture Upholstery will redefine the boundaries by integrating custom sizing with COM (Customer’s Own Material) into the RH ecosystem. We are giving designers the creative freedom to specify custom sizes and fabrics for sofas, sectionals, chairs, ottomans and beds. You source the fabric from anywhere in the world; we provide atelier level construction and craftsmanship.”

A New Covenant with the Trade

Friedman concludes, “We recognize that the ultimate expression of our product requires the vision of incredible talent. To honor the design community, we are redefining how we partner with professionals. We are introducing an exclusive program for Interior Designers, Architects, and Trade Members. The program ensures that professionals are compensated for the tremendous value and aesthetic clarity they create for consumers. We want to incentivize the world’s best talent to build their canvases using our platform, creating a symbiotic ecosystem where design mastery is both accessible and rewarded at every level.”

“The separation between taste and scale is over. The curtain has fallen. It’s time to tear down that wall.”