RH lifts 2026 outlook as Q1 beats expectations despite tariff-related headwinds

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RH said revenue was reduced by roughly $45 million during the quarter because backorder and special-order balances were about $75 million higher than a year earlier, largely due to tariff-related resourcing efforts. The company expects elevated balances to persist through the second quarter before normalizing by the end of 2026, which it believes could contribute approximately $75 million in revenue during the second half of the year.

Reflecting stronger-than-expected first-quarter performance, RH raised its full-year forecast and now expects fiscal 2026 revenue growth of 4.5% to 8.0%, adjusted EBITDA margins of 14.2% to 16.0%, and adjusted free cash flow of $300 million to $400 million. For the second quarter, the company projects revenue growth of 0.5% to 2.5% and adjusted EBITDA margins of 11.5% to 13.0%.

Chairman and CEO Gary Friedman said the company expects growth to accelerate in the second half of the year, driven by backlog reduction, new store openings, and expansion of its newly launched RH Estates concept. RH is also pressing ahead with its international expansion strategy, highlighting flagship locations in Paris, Milan and London as key foundations for building a global luxury brand.

The company generated $13.3 million in free cash flow during the quarter, ending the period with $53.8 million in cash and cash equivalents. Total net debt stood at approximately $2.37 billion, or 4.3 times trailing 12-month adjusted EBITDA.