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May 03, 2025
RH Q1 2025 Earnings Report
RH reported a return to profitability in Q1 2025 with revenue growth and improved adjusted margins.
Key Takeaways
RH delivered solid Q1 2025 results, generating positive net income and free cash flow amid a weak housing market. Revenue increased 12% YoY, and margins came in at the high end of expectations, reflecting successful international expansion and improved product positioning.
Revenue grew 12% year-over-year to $813,952,000.
Net income turned positive at $8,039,000 versus a loss last year.
Free cash flow reached $34,076,000 in the quarter.
Adjusted EBITDA margin improved to 13.1%.
Revenue by Geographic Location
Forward Guidance
RH maintained its fiscal 2025 guidance, expecting solid revenue and margin performance despite tariff-related disruptions in Q2.
Positive Outlook
- Fiscal 2025 revenue growth forecast of 10% to 13%.
- Adjusted EBITDA margin expected at 20% to 21%.
- Free cash flow projected between $250M to $350M.
- Q2 2025 adjusted operating margin guidance of 15% to 16%.
- International expansion gaining momentum in Europe.
Challenges Ahead
- Liberation Day tariffs expected to impact Q2 revenue by ~6 points.
- Tariff uncertainty remains a business risk.
- Delayed launch of new brand concept to Spring 2026.
- 180 bps drag on operating margin from international startup costs.
- Elevated debt levels from stock repurchases continue to pressure balance sheet.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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