Group 1 - The company RH is experiencing challenges with margins, indicating a potential downturn in performance [1] - There is a strong correlation between RH and the housing market, suggesting that RH's performance is heavily dependent on housing recovery [1][2] - The CEO, Gary Friedman, emphasizes the need for RH to increase sales, particularly of high-priced items, while also addressing the impact of tariffs on business operations [3] Group 2 - The sentiment around RH is optimistic for those who are confident in a housing market rebound, positioning RH as a more leveraged investment compared to other companies like Home Depot [2] - Gary Friedman is recognized for his visionary thinking and the appeal of RH's galleries, which are seen as enjoyable experiences for customers [3] - There is a discussion about the complexity of managing business operations in the current environment, with a focus on how larger companies like RH are faring compared to small businesses [3]

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Core Viewpoint - RH reported mixed results for the third quarter, with earnings per share falling short of analyst expectations while revenue slightly exceeded estimates [1][2]. Financial Performance - Quarterly earnings were $1.71 per share, missing the analyst estimate of $2.16 by 20.87% [1]. - Quarterly revenue was $883.81 million, surpassing the Street estimate of $883.69 million [1]. Growth and Market Conditions - Revenue increased by 9% in the third quarter and 18% on a two-year basis, indicating strong growth despite challenging market conditions [2]. - The CEO highlighted the brand's disruptive nature amid the worst housing market in nearly 50 years and the impact of tariffs [2]. Future Outlook - For the fourth quarter, RH projects revenue between $869.27 million and $877.4 million, lower than the analyst estimate of $896.97 million [2]. Analyst Reactions - Following the earnings announcement, analysts adjusted their price targets for RH stock, with B of A Securities lowering it from $200 to $170 and Telsey Advisory Group from $220 to $185 [3][4].

Core Viewpoint - RH is a significant player in the luxury home furnishings market, known for its upscale products and strategic initiatives to maintain market position [1] Financial Performance - RH reported a revenue of $883.81 million for Q3 2025, reflecting an 8.9% year-over-year increase, slightly exceeding the Zacks Consensus Estimate of $882.95 million, resulting in a positive surprise of 0.1% [3][6] - The company's earnings per share (EPS) fell to $1.71, which is below the consensus estimate of $2.13, marking a negative surprise of 19.72% [3][6] - Over the past four quarters, RH has exceeded consensus EPS estimates only once, indicating challenges in meeting earnings expectations [5] Stock Performance - The current stock price of RH is $153, reflecting a decrease of approximately 2.68%, with a drop of $4.22 [4] - Over the past year, RH's stock has fluctuated significantly, reaching a high of $457.26 and a low of $123.03 [4] - The company's market capitalization is approximately $2.87 billion, with a trading volume of 1,658,506 shares [4] Analyst Insights - Andrew Carter from Stifel Nicolaus set a price target of $165 for RH, suggesting a potential upside of approximately 7.84% from the current trading price [2][6]

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Core Insights - RH reported revenue of $883.81 million for the quarter ended October 2025, reflecting an 8.9% increase year-over-year and a slight surprise of +0.1% over the Zacks Consensus Estimate of $882.95 million [1] - The earnings per share (EPS) for the quarter was $1.71, down from $2.48 in the same quarter last year, resulting in an EPS surprise of -19.72% compared to the consensus estimate of $2.13 [1] Financial Performance - The stock of RH has returned -2.4% over the past month, while the Zacks S&P 500 composite has increased by +0.9% [3] - RH currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3] Key Metrics - Total number of locations for RH is 73, exceeding the average estimate of 68 by three analysts [4] - Total leased selling square footage at the end of the period is 1,639.00 Ksq ft, surpassing the average estimate of 1,594.30 Ksq ft by two analysts [4] - The number of RH Design Galleries is 37, matching the average estimate by two analysts [4] - The count of RH Legacy Galleries is 26, slightly below the average estimate of 27 by two analysts [4] - The total number of outlets is 43, consistent with the average estimate by two analysts [4]

分组1 - RH reported quarterly earnings of $1.71 per share, missing the Zacks Consensus Estimate of $2.13 per share, and down from $2.48 per share a year ago, representing an earnings surprise of -19.72% [1] - The company posted revenues of $883.81 million for the quarter ended October 2025, surpassing the Zacks Consensus Estimate by 0.10%, and up from $811.73 million year-over-year [2] - Over the last four quarters, RH has surpassed consensus EPS estimates just once and topped consensus revenue estimates only once [2] 分组2 - RH shares have lost about 60.1% since the beginning of the year, while the S&P 500 has gained 17.1% [3] - The current consensus EPS estimate for the coming quarter is $3.93 on revenues of $902.86 million, and for the current fiscal year, it is $9.08 on revenues of $3.5 billion [7] - The Zacks Industry Rank indicates that the Consumer Products - Staples sector is currently in the bottom 27% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8]

Luxury furniture retailer RH soared after it reported higher growth than rivals as the industry contends with pressure from tariffs and a sluggish housing market https://t.co/qVK6L6m9s4 ...

Financial Data and Key Metrics Changes - Revenue increased by 9% in Q3 and 18% on a two-year basis, despite challenging housing market conditions [4] - Adjusted operating margin was 11.6%, below the guidance midpoint of 12.5% due to higher-than-expected tariff expenses [4] - Adjusted EBITDA margin was reported at 17.6%, with free cash flow of $83 million in Q3 and $198 million year-to-date, on track to meet the annual target of $250 million to $300 million [4][5] Business Line Data and Key Metrics Changes - The company is making progress in reducing excess inventory, estimated at $300 million, with inventory down 11% year-over-year and $82 million lower than Q2 [5] - Market share gains are being achieved from fragmented design showrooms and high-end furniture stores, with two-year share gains ranging from 12 to 28 points [5] Market Data and Key Metrics Changes - The current housing market is described as the worst in nearly 50 years, with existing home sales projected to average 4.07 million from 2023 to 2025, compared to 4.09 million in 1978 [8] - Tariffs have disrupted supply chains, leading to increased prices and multiple rounds of price negotiations [8] Company Strategy and Development Direction - The company is focused on long-term growth, emphasizing innovation and investment during challenging times, with plans for a significant product transformation launch in spring next year [9] - A global hospitality business is being developed to enhance brand awareness and cash flow, with the RH Ocean Grill expected to generate significant operating income [10][11] - The establishment of a freestanding interior design firm aims to expand the brand's presence beyond product sales to conceptualizing and selling spaces [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unusual market conditions and the risks involved, emphasizing the importance of navigating these challenges strategically [8][9] - The outlook for Q4 includes revenue growth of 7%-8% and an adjusted operating margin of 12.5%-13.5%, factoring in the impact of international expansion and tariffs [6][7] - For fiscal year 2025, the revenue growth outlook is set at 9%-9.2%, with adjusted operating margins expected to be between 11.6%-11.9% [7] Other Important Information - The company is launching a new collection targeting high-end architectural aesthetics, with plans to unveil it at the Salone in Milan [59][61] - The acquisition of Michael Taylor Designs is expected to enhance the brand's offerings in the high-end market [64] Q&A Session Summary Question: Demand for RH Paris and its influence on performance expectations for RH Milan and RH London - Management noted that RH Paris is unique and has set a tone for future openings, with expectations for strong performance in Milan and London [16][17] Question: Customer response to recent price increases and elasticity - Management indicated that they are learning from the price increases and navigating the tariff situation, aiming for a fair playing field in the market [51][53][55] Question: Guidance for Q4 and potential limitations on managing tariffs - Management acknowledged the dynamic situation with tariffs and indicated that while there may be some slowdown, they are proud of their navigation strategies [76][78]

Financial Data and Key Metrics Changes - Revenue increased by 9% in Q3 and 18% on a two-year basis, despite challenging housing market conditions [4] - Adjusted operating margin was 11.6%, below the guidance midpoint of 12.5% due to higher-than-expected tariff expenses [4] - Adjusted EBITDA was 17.6%, with free cash flow of $83 million in Q3 and $198 million year-to-date, on track to meet the annual target of $250 million to $300 million [4][5] Business Line Data and Key Metrics Changes - Inventory decreased by 11% year-over-year and by $82 million compared to Q2, with a goal to reduce excess inventory estimated at $300 million [5] - Market share gains were noted from fragmented design showrooms and high-end furniture stores, with two-year share gains ranging from 12 to 28 points [5] Market Data and Key Metrics Changes - The company is navigating the worst housing market in nearly 50 years, with existing home sales projected to average 4.07 million from 2023 to 2025, a significant decrease compared to historical figures [9] - Tariffs have disrupted supply chains, leading to increased costs and product delays, with 16 tariff announcements in the past 10 months impacting operations [9] Company Strategy and Development Direction - The company is focused on long-term growth, emphasizing innovation and investment during challenging times, with plans for a significant product transformation launch in spring 2026 [10][11] - A global hospitality business is being developed to enhance brand awareness and cash flow, with the opening of RH Paris as a key milestone [11][12] - The establishment of a freestanding interior design firm aims to expand the brand's presence beyond product sales to space conceptualization [12][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the unusual market conditions and the risks associated with tariffs and supply chain disruptions, but remains optimistic about gaining market share [9][10] - The company plans to continue its aggressive investment strategy, believing that it will be well-positioned for growth when the housing market improves [10][62] Other Important Information - The company has acquired Michael Taylor Designs, enhancing its portfolio in the high-end interior design space [58] - The upcoming collection launch at Salone in Milan is expected to significantly impact the brand's growth trajectory over the next decade [54][55] Q&A Session Summary Question: How has the customer responded to price increases in Q3? - Management noted that they have implemented several price increases due to tariffs and are observing customer elasticity in response [47][48] Question: Can you provide insights on the new collection launching next year? - The new collection is anticipated to be the biggest incremental move for the company, targeting high-end architectural aesthetics and launching at Salone in Milan [54][55] Question: Should the company consider slowing the pace of initiatives for predictability? - Management emphasized the importance of maintaining high ambitions and not compromising on growth strategies, even in a challenging environment [60][62]