CORTE MADERA, Calif. — Top 100 retailer RH beat its year-over-year sales figures by 8.1% in the third quarter of FY2024 and posted a profit, reversing a loss from a year ago.
For the three months ended Nov. 2, the Corte Madera, Calif.-based retailer recorded net revenues of $811.732 million, up 8.1% compared with $751.225 million in the third quarter of 2023. Its net income for the quarter was $33.168 million, or $1.66 per diluted share vs. a loss of $2.187 million, or 12 cents per diluted share last year.
For the quarter, RH’s adjusted EBITDA was $168.547 million, giving it an adjusted EBITDA margin of 20.8%.
“The positive inflection of our business continued to gain momentum with third quarter demand increasing 13% despite operating in the worst housing market in 30 years,” Chairman and CEO Gary Friedman wrote in an executive letter accompanying the financial results. “Our vector is increasing in both magnitude and direction with November demand up 18%, as the most prolific product transformation and platform expansion in the history of our industry continues to unfold.”
Year-to-date, RH’s net revenues were $2.369 billion, up 3.38% vs. $2.291 billion through the first nine months of FY2023. Net income stood at $48.495 million, or $2.93 per diluted share, down 49.65% against $116.18 million, or $5.23 per diluted share in 2023.
Through three quarters, RH’s adjusted EBITDA was $400.284 million, giving it an adjusted EBITDA margin of 16.9%.
As a result, RH is raising its fourth quarter guidance to total demand growth of 20% to 22% and revenue growth of 18% to 20%, and full year demand growth of 9.9% to 10.4% and revenue growth of 6.8% to 7.2%.
Looking ahead, Friedman said RH is reintroducing Waterworks, the luxury kitchen and bath brand, beginning with the opening of its Newport Beach, Calif., showroom this week. Expected additional openings in the remainder of 2024 and 2025 include RH Montecito, an RH Interior Design Studio in Palm Desert, Calif., and seven more Galleries in North America and two in Europe.
Friedman also noted that RH isn’t expecting a negative impact to margins due to the most recent communications regarding the potential for increased tariffs in 2025.
“We have been proactively moving sourcing away from China over the past several years with the expectation of fully exiting the country by the end of the second quarter,” he said. “We are also transitioning products manufactured in Mexico and believe we can successfully reposition our sourcing with no disruption to the supply chain.”
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