Corte Madera, California — In the third quarter of FY2024, top 100 retailer RH posted a profit, reversing a loss from the previous year, and outperformed its year-over-year sales figures by 8.1%.
The company, situated in Corte Madera, California, reported net revenues of $811.732 million for the three months ending November 2, an 8.1% increase over the $751.225 million recorded in the third quarter of 2023. In comparison to previous year, when it lost $2.187 million, or 12 cents per diluted share, its net income for the quarter was $33.168 million, or $1.66 per diluted share.
With $168.547 million in adjusted EBITDA for the quarter, RH had a 20.8% adjusted EBITDA margin.
In an executive letter that accompanied the financial results, Chairman and CEO Gary Friedman stated, “Despite operating in the worst housing market in 30 years, the positive inflection of our business continued to gain momentum with third quarter demand increasing 13%.” “With demand up 18% in November, our vector is growing in both magnitude and direction as the most extensive platform expansion and product transformation in our industry’s history continues to take place.”
RH’s net revenues through the first nine months of FY2023 were $2.291 billion, down 3.38% from $2.369 billion this year. In 2023, net income was $116.18 million, or $5.23 per diluted share; in 2024, it was $48.495 million, or $2.93 per diluted share, a 49.65% decrease.
With an adjusted EBITDA margin of 16.9%, RH’s adjusted EBITDA for the first three quarters was $400.284 million.
Consequently, RH is increasing its fourth quarter forecast to 20–22% overall demand increase and 18–20% revenue growth, as well as 9.9%–10.4% full year demand growth and 6.8%–7.2% revenue growth.
Considering the future, According to Friedman, RH is relaunching the upscale kitchen and bathroom brand Waterworks, starting this week with the inauguration of its showroom in Newport Beach, California. RH Montecito, a RH Interior Design Studio in Palm Desert, California, as well as seven more Galleries in North America and two in Europe are anticipated to open in the remaining months of 2024 and 2025.
Friedman added that despite recent talks about the possibility of higher tariffs in 2025, RH does not anticipate a detrimental impact on profitability.
Over the past few years, he stated, “we have been proactively shifting sourcing away from China with the expectation of fully exiting the country by the end of the second quarter.” “We are also switching to Mexican-made products and think we can successfully reposition our sourcing without causing any supply chain disruptions.”
