4Q24 Revenue: $812.41M, +10.0% YoY, miss estimates by $17.12M
4Q24 Non-GAAP EPS: $1.58, miss estimates by $0.33
1Q25 Guidance: Expect revenue growth of 12.5% to 13.5%, adjusted operating margin of 6.5% to 7.0% and adjusted EBITDA margin of 12.5% to 13.0%.
FY25 Guidance: Expect revenue growth of 10% to 13%, adjusted operating margin of 14% to 15% and adjusted EBITDA margin of 20% to 21%.
Comment: RH delivered Q4 revenue of US$812.4mn and EPS of US$1.58, missing analysts’ expectations. The company’s full year sales outlook also fell short of expectations. Despite the tariffs expected to kick in early this month, its CEO Gary Friedman remained cautious about immediate price increases, noting that RH is well-stocked and prefers to wait and see how trade conditions evolve. RH has been gradually shifting production away from China and Mexico, increasing its domestic manufacturing capacity, with nearly half of its upholstered furniture set to be made in the U.S. by year-end. The company has also expanded its product offerings, with demand rising 17% in Q4. The company expects higher-risk business environment due to tariffs, market volatility, and inflation but remained optimistic about RH’s ability to outperform competitors by leveraging its inventory and strategic moves. We anticipate that the near-term uncertainty from tariffs and economic volatility will continue to negatively impact RH top and bottom lines. 1Q25recommended trading range: $170 to $200. Negative Outlook.
