$RH (+0,2 %) Q3'24 Earnings Highlights
🔹 EPS: $2.48 (Est. $2.65) 😕
🔹 Revenue: $811.73M (Est. $812.16M) 🟡; UP +8.1% YoY
🔸Expects no margin impact from increased tariffs in 2025 🟢
Raised Guidance: 🟢
🔹 Q4 Total Demand Growth: 20%-22%
🔹 Q4 Revenue Growth: 18%-20%
🔹 FY Total Demand Growth: 9.9%-10.4%
🔹 FY Revenue Growth: 6.8%-7.2%
Demand Trends:
🔸 Q3 Total Demand: UP +13%
🔸 RH Brand Demand: UP +14%
🔸 November Demand: Accelerated to UP +18%
🔸 December Trends: Month-to-date demand UP +30%
Q3 Financial Metrics:
🔹 GAAP Operating Margin: 12.5%
🔹 Adj Operating Margin: 15.0% (vs. 7.3% YoY)
🔹 Adj EBITDA Margin: 20.8% (vs. 12.4% YoY)
Strategic Highlights:
🔸 RH raised advertising investments by $6M, driving strong demand growth from the RH Modern Sourcebook release.
🔸 Plans to launch RH Interiors Sourcebook and RH Outdoor Sourcebook in February 2025 with new collections.
🔸 Waterworks showroom opened at RH Newport Beach, with potential to scale from ~$200M to a billion-dollar brand.
CEO Gary Friedman’s Commentary:
🔸 "Our business gained momentum in Q3, with demand accelerating further in Q4, positioning RH to drive significant market share gains."
Global Expansion:
🔸 Openings planned for RH Paris and RH London in 2025, and RH Milan in 2026.
🔸 Positive growth trends at RH England (+42% Gallery growth, +111% web business YoY).
Tariff Update:
🔸 RH expects no margin impact from increased tariffs in 2025 due to proactive relocation of sourcing away from China.