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Feb 01
RH Q4 2024 Earnings Report
RH reported higher revenue and earnings, driven by strong demand and successful product transformation.
Key Takeaways
RH delivered strong Q4 performance with revenue growth, improved margins, and a significant increase in adjusted operating income, despite ongoing challenges in the housing market.
Revenue rose to $812M, up from $738M last year.
Adjusted operating income increased 38% YoY.
EPS reached $0.69, while adjusted EPS hit $1.58.
RH Brand demand surged 21% on a comparable basis.
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Forward Guidance
RH expects double-digit revenue growth in FY2025 with expanding margins, though international expansion costs and macro uncertainty remain challenges.
Positive Outlook
- Revenue growth forecasted at 10%–13% for FY2025.
- Adjusted operating margin projected to rise to 14%–15%.
- Adjusted EBITDA margin expected to reach 20%–21%.
- Q1 2025 revenue growth guided at 12.5%–13.5%.
- Major product and platform expansions planned for 2025.
Challenges Ahead
- Uncertainty from tariffs, inflation, and market volatility.
- Operating margin to be negatively impacted 160–200 bps by international startup costs.
- Excess inventory of $200–300M to be worked down.
- Demand volatility influenced by mortgage rate fluctuations.
- High debt levels from $2.2B in stock repurchases.