RH Q2 Results Show Tariff Boost, Guidance Lift
RH Q2 Results: Management raised revenue and adjusted-EBITDA margin guidance citing RH Estates; tariff refunds lifted reported profits and aided outlooks.
KEY TAKEAWAYS
- Management raised fiscal-2026 revenue and adjusted EBITDA margin guidance citing RH Estates momentum.
- Adjusted EBITDA was $179 million; normalized margin excluding $55 million tariff benefit was 13.4%.
- The company recognized $55 million of tariff refunds and expects additional H2 benefit partly offsetting supply-chain costs.
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RH reported second-quarter fiscal 2026 results for the period ended Aug. 1, 2026, saying early momentum from RH Estates prompted management to raise full-year revenue growth and adjusted EBITDA margin guidance.
Quarterly Results and Filings
On Sept. 10, 2026, RH filed a Form 10-Q for the quarter ended Aug. 1 and posted a shareholder letter as Exhibit 99.2 to a Form 8-K. The company also issued a Business Wire release and held an earnings conference call that day.
The filing showed GAAP net revenues of $922.2 million, a 2.6% year-over-year increase that exceeded the high end of guidance. This represented a $23 million gain from the prior year, with revenue growth accelerating about 4.2 percentage points versus the first quarter.
The shareholder letter reported GAAP net income of $60.2 million and EBITDA of $168.3 million, an 18.3% margin. Adjusted EBITDA was $178.5 million, a 19.4% margin, including $55.1 million of tariff refunds. Excluding tariff benefits, normalized adjusted EBITDA was $123.5 million, a 13.4% margin, above the high end of guidance. Adjusted EPS was $2.70.
The Form 10-Q showed RH generated $72.3 million of cash in the quarter, including a $42 million distribution from Aspen joint ventures and excluding tariff refunds. Outlet revenues totaled $71 million, and Waterworks net revenues rose 4.6% to $55 million. Equity-method real estate income for the six months ended Aug. 1 was $17 million, up from $6.5 million a year earlier. The effective tax rate declined to 26.3% from 27.1%.
Guidance and Tariff Impact
RH recognized $55.1 million of International Emergency Economic Powers Act (IEEPA) tariff refunds in the quarter, boosting gross margins by roughly 600 basis points. The company applied for about $69 million in refunds, receiving $67 million plus $2.4 million of interest during the quarter. It recorded a $2.1 million receivable for additional claims as of Aug. 1 and took a $14 million reduction to merchandise inventory costs, which will be phased into gross margins over the third and fourth quarters.
Management raised full-year fiscal 2026 revenue growth guidance to 5.5%–7.0% and adjusted EBITDA margin guidance to 15.0%–16.2%. The margin range includes an estimated 340 basis-point drag from international pre-opening and startup costs. Executives expect roughly $13.9 million of additional tariff benefit in the second half, which will partly offset about $50 million of unplanned supply-chain cost increases. The remainder will support earnings and is reflected in the updated margin outlook.
The guidance lift reflects early momentum from RH Estates and other recent brand extensions. Capital spending for 2026 is projected at $240–$260 million, with a planned reduction to $175–$200 million in 2027 tied to international expansion and the Estates rollout.
