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Financial, Retail

RH Releases Third Quarter Results

RH reports third quarter fiscal year 2025 revenues increased 9 percent, net income increased 9 percent.

12/12/2025
CORTE MADERA, Calif. -- RH (NYSE: RH) has released its financial results for the third quarter ended November 1, 2025, in a shareholder letter from Chairman and Chief Executive Officer Gary Friedman,

According to a statement from Friedman:

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.
Adjusted operating margin of 11.6% was below the 12.5% mid-point of our guidance due to higher than forecasted tariff expense on prior period special order and back order sales delivered in the quarter and higher than expected Paris opening expenses.

Adjusted EBITDA was 17.6% and we generated $83 million of free cash flow in Q3. Year-to-date free cash flow reached $198 million and we are on track to achieve our outlook range of $250M to $300M for the year.

Net debt at the end of the quarter was $2.427 billion, down $85M from Q2. We ended Q3 with real estate assets that we believe have an estimated equity value of approximately $500 million that we plan to monetize opportunistically as market conditions warrant. Additionally, we are making progress on our goal of reducing excess inventory, estimated at $300 million, with inventory down 11% versus last year, and down $82 million versus the second quarter.

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 as you can see from the table below.

To view the full release, click here.
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