The second quarter turned up a significant Wall Street earnings beat for Restoration Hardware, and the home furnishing retailer’s revenues also came in better than anticipated.
Net income was $60.2 million, or $3.06 per diluted share, versus $51.7 million, or $2.62 per diluted share, in the year-previous quarter, the company stated. Adjusted for one-time events, net income was $53.2 million, or $2.70 per diluted share, versus $57.8 million, or $2.93 per diluted share, in the year-before period.
A Zacks Investment Research analyst consensus estimate had RH second-quarter earnings at 42 cents per adjusted diluted share and revenues at $913.3 million.
Net revenues were $922.2 million versus $899.2 million in the year-earlier quarter, the company reported. Operating income was $107.6 million versus $128.9 million in the period a year prior, while adjusted operating income was $121.2 million versus $135.6 million.
RH updated its guidance for the fiscal year, with revenue growth now pegged at 5.5% to 7%. The company said previously it expected revenue growth of 4.5% to 8%.
In a letter to stakeholders, Gary Friedman, chairman and CEO, said RH recognized a tariff benefit of $55.1 million in the second quarter, and the company expects to recognize an additional $13.9 million in tariff refunds in the second half of the year. RH will use part of that to offset $50 million of unplanned cost increases across its supply chain due to the oil price increases associated with the Iran war. The remaining $19 million will benefit earnings, he said.
Friedman also addressed the launch of RH Estates, a brand developed for affluent consumers who might engage interior designers,. He said the company is getting ready to debut a new wrinkle on its luxury strategy. RH Compounds, a multi-building shopping operation with connecting garden courtyards and a central atrium restaurant under construction in Naples, FL, is scheduled to open in late 2026 or early 2027, giving the company another format option as it looks to continue growing. Another is slated for construction in Aventura, FL, with an opening envisioned for some time in 2027, according to RH.
