CORTE MADERA, Calif. — An increase in demand in the second quarter of FY2024 led to a 3.6% increase in net revenues for Top 100 retailer RH.
For the three months ended Aug. 3, the Corte Madera, Calif.-based retailer recorded net revenues of $829.66 million, up 3.6% compared with the $800.48 accumulated in the same three-month period in 2023 with an EBITDA margin of 17.2%. In his letter to investors, Chairman and CEO Gary Friedman noted that demand was up 7% year-over-year in the second quarter, with a particularly strong 10% increase in July.
“Our investments in the most prolific product transformation and platform expansion in our history are now resulting in RH gaining significant market share in North America while building the foundation for our global expansion across Europe, Australia and the Middle East over the next decade,” Friedman wrote.
While that transformation’s impact is in its early stages, increased costs ate into the company’s profits. For the quarter, RH posted net income of $28.95 million, or $1.45 per diluted share, a 62.1% decline compared to net income of $76.78 million, or $3.36 per diluted share in the second quarter of 2023. While those numbers didn’t match 2023’s levels, they improved upon the first quarter, in which the company posted losses in income and earnings per share.
Through the first two quarters of its fiscal year, RH posted net revenues of $1.56 billion, up 1.1% vs. the 26-week total of $1.54 billion in 2023. Meanwhile, net income totaled $25.33 million, or $1.27 per diluted share, which represented a 78.6% slip when compared with 2023’s $118.37 million in income, or $5.09 per diluted share.
As such, Friedman said RH is adjusting its full-year forecast to revenue growth of 5% to 7% and adjusted EBIDTA margin in the range of 17% to 18%. For the third quarter, the company is projecting revenue growth in the range of 7% to 9% with adjusted EBIDTA margin of 21% to 22%.
For the remainder of the year, Friedman said RH will launch a 3,000-square-foot Waterworks showroom in its largest new Design Gallery in Newport Beach, Calif., which will open in the fourth quarter. It acquired the luxury bath and kitchen brand in 2016.
RH Raleigh is slated to open in North Carolina in November while in California, RH Montecito and an RH Interior Design Office in Palm Desert will also open later this year.
“We continue to open the most inspiring and immersive physical experiences in our industry and some would say the world,” Friedman wrote. “Spaces that are a reflection of human design, a study of balance, symmetry and perfect proportions. Spaces that blur the line between residential and retail, indoors and outdoors, home and hospitality. Spaces with courtyards, rooftop restaurants, win and barista bars. Spaces that activate all of the senses and spaces that cannot be replicated online.”
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