RH (NYSE:RH), the high-end home furnishings retailer, reported weaker-than-expected results for the fourth quarter of fiscal 2025, sending its shares down almost 23% in early trading.
The company posted adjusted earnings per share of $1.53, below analysts’ consensus of roughly $2.21, while revenue came in at $842.6 million, missing the expected $873.5 million. Despite the miss, revenue still grew 3.7% year over year.
GAAP net income for the quarter rose 107% to $29 million, and the company recorded a GAAP operating margin of 11.5%. EBITDA margin was 16.2%, with an adjusted EBITDA margin of 17.7%, and free cash flow totaled $55 million.
RH said its fourth quarter and full-year 2025 net revenues were negatively affected by about $30 million from higher-than-expected backorder and special order balances related to tariffs, and roughly $10 million from adverse weather at the end of the quarter.
Looking ahead, RH expects fiscal year 2026 revenue growth of 4% to 8%, an adjusted EBITDA margin of 14% to 16%, and adjusted free cash flow of $300 million to $400 million.
The company noted that its guidance reflects an approximate 270 basis point negative impact on adjusted EBITDA from preopening and startup costs associated with international expansion.
For the first quarter of 2026, RH projects revenue to decline 2% to 4% with an adjusted EBITDA margin of 5.5% to 6.5%, including about 420 basis points of negative impact from international expansion startup costs.