RH shares rose nearly 9% in Friday premarket trading to $146.00 after the upscale home furnishings retailer reported fiscal second-quarter 2026 results that exceeded profit expectations, while quarterly revenue came in slightly below the analyst forecast. The stock had closed at $134.02 before the earnings release. Despite the premarket increase, RH remained down more than 41% over the trailing 12-month period.

The company reported adjusted earnings per share of $2.70, surpassing the Wall Street consensus estimate of $1.78 by $0.92. Revenue increased 2.6% year over year to $922.2 million, compared with the $936.25 million analyst projection.

Schaeffer’s Investment Research reported the results on X:

JUST IN: $RH +8.2% after hours after Q2 results. Revenue: $922.2M vs. $916.3M est. Revenue +2.6% Y/Y Adj. EBITDA: $178.5M Q3 revenue growth guide: +5% to +6% FY revenue growth guide: +5.5% to +7% — Schaeffer's Investment Research (@schaeffers) September 10, 2026

The quarter included a $55.1 million benefit related to tariffs. Management expects to receive an additional $13.9 million in tariff benefits during the second half of the fiscal year, which it expects will offset part of approximately $50 million in unexpected supply-chain expenses associated with higher oil prices.

Cash generation totaled $72.3 million for the period. The figure included free cash flow and a $42 million distribution from the company’s Aspen joint venture partnership, excluding the $69.2 million received from tariff refunds.

Estates Collection Targets a Larger Market

RH’s most significant product announcement involved its Estates collection, which was introduced between late June and mid-July. The line focuses on traditional and classic design styles that management says characterize more than 60% of high-end homes across North America and have an even stronger presence in European markets.

Management believes Estates could double RH’s total addressable market. The company expects the collection to represent half of its overall product portfolio within five years and anticipates that the design aesthetic will influence industry trends for more than two decades.

The company is supporting the strategy with significant capital investment, while expanding its retail model beyond merchandise sales. The collection’s rollout is therefore tied to both product assortment and the company’s broader plan to use galleries, restaurants and design services as parts of a more integrated customer experience.

RH Compounds and Dining Expansion

RH is developing what it calls RH Compounds, multi-structure retail complexes designed to attract customers through immersive experiences. A facility in Naples, Florida, featuring garden courtyards and a centrally located atrium restaurant, is scheduled to open between late 2026 and early 2027.

A second Compound in Aventura, Florida, is expected to break ground shortly and is targeted to open in 2027. Management expects the expansion projects to generate payback periods of 12 to 18 months.

Restaurants incorporated into existing RH gallery locations currently generate revenue equal to 65% of total gallery rental costs at locations where they operate. The retailer is also expanding its residential interior design services, extending its business model from furniture sales to comprehensive space design and execution.

Fiscal 2026 Guidance

RH narrowed its full-year fiscal 2026 revenue guidance to between $3.629 billion and $3.681 billion, compared with its previous range of $3.594 billion to $3.715 billion. The Wall Street consensus estimate is $3.631 billion.

For the third quarter, the company projects revenue of $928 million to $936.8 million, below the $968.2 million analyst estimate. The forecast represents expected growth of 5% to 6%.

Fourth-quarter revenue is projected at $978.3 million to $1.021 billion, above the $948.9 million consensus estimate. RH expects fourth-quarter growth of 16.1% to 21.2%, driven by the Estates rollout, backlog clearance and new gallery openings.

These projections identify the principal near-term operating milestones: the Estates rollout, clearance of the backlog, gallery openings and the reduction in the international drag. International operations represented a 450-basis-point drag in the first half of the fiscal year, a figure management expects to decline to 250 basis points in the second half.

Source: Blockonomi