Core Insights - RH reported Q1 2025 results with a revenue increase of 12% year over year, adjusted operating margin of 7%, adjusted EBITDA of 13.1%, and free cash flow of $34 million, maintaining full-year guidance for revenue growth of 10%-13% and free cash flow of $250 million-$350 million despite market challenges [1][10] Global Expansion - RH's international galleries showed strong demand growth, with RH England's gallery and online business up 47% and 44% year over year, and continental European galleries RH Munich and RH Dusseldorf up 60% [3] - Management acknowledged initial challenges in optimizing inventory and assortments for European markets, citing five-month lead times on special orders and earlier localization missteps [3][4] - Evidence of pent-up demand suggests that improved operational execution in Europe could significantly enhance profitability and support long-term international growth [4] Membership Strategy - A permanent increase in the RH membership discount from 25% to 30% was announced, marking a strategic shift aimed at increasing market share while maintaining brand value [5][6] - The membership discount enhancement is intended to directly compete with rivals in the home furnishings sector [6] Asset Monetization and Capital Efficiency - At the start of fiscal 2025, RH reported significant debt primarily from $2.2 billion in share repurchases, while holding a unique real estate portfolio valued at approximately $500 million [8] - Management plans to monetize assets through sale-leasebacks and direct sales, targeting $200 million to $300 million in excess inventory to be converted to cash over the next 12 to 18 months [8][9] - The strategy aims to improve capital efficiency and reduce leverage despite high interest rates [9] Future Outlook - Management reaffirmed guidance for FY2025, projecting revenue growth of 10%-13%, adjusted operating margin of 14%-15%, and adjusted EBITDA margin of 20%-21% [10] - Q2 guidance anticipates revenue growth of 8%-10% with deferred revenue expected to be recovered in the latter half of the year [10] - The launch of a new brand extension has been postponed to spring 2026 due to tariff uncertainties [10]

Financial Data and Key Metrics Changes - Revenue increased by 12% in Q1 2025 despite challenges in the housing market and tariff uncertainties [9][10] - Adjusted operating margin was 7%, and adjusted EBITDA was 13.1%, both at the high end of expectations [10] - Positive free cash flow of $34 million was achieved in the quarter [10] Business Line Data and Key Metrics Changes - Demand at RH England increased by 47% in Q1, with online demand up 44% [11] - European business saw a demand growth of 60% across comparable galleries, specifically RH Munich and RH Dusseldorf [12] Market Data and Key Metrics Changes - The housing market is described as the worst in nearly fifty years, with existing home sales significantly down compared to historical figures [16][17] - Despite the housing market downturn, the company is performing at levels typically expected in a robust market [18] Company Strategy and Development Direction - The company is focused on creating a global hospitality brand and bespoke interior design business, with plans to open new galleries in iconic locations [19][30] - Strategic investments are being made to elevate the brand and expand product offerings, with a forecasted adjusted EBITDA margin above 20% [20] - The company plans to increase its membership discount from 25% to 30% to capture market share during the downturn [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a higher risk business environment due to tariffs, inflation, and global discord but remains optimistic about long-term growth [15][24] - The company is maintaining its revenue growth guidance of 10% to 13% for fiscal 2025, despite macroeconomic uncertainties [26] Other Important Information - The company plans to delay the launch of a new concept from late 2025 to spring 2026 due to tariff uncertainties [25] - The company is shifting sourcing out of China, expecting receipts to decrease from 16% in Q1 to 2% by Q4 [23][24] Q&A Session Summary Question: Thoughts on demand planning for Paris, London, and Madrid - Management believes the RH brand can be as disruptive in Europe as in America, with early trends showing potential for significant growth [39][46] Question: Breakdown of the $500 million real estate value - Management indicated that they have several galleries for potential sale leasebacks and are being patient with timing due to current interest rates [50][52] Question: Assessment of demand spike from recent sales - Management noted that increasing membership value and promotional strategies have led to significant business during peak seasons, particularly in outdoor furniture [83][89]

Financial Data and Key Metrics Changes - Revenue increased by 12% in Q1 2025 despite challenges in the housing market and tariff uncertainties [6] - Adjusted operating margin was 7% and adjusted EBITDA was 13.1%, both at the high end of expectations [6] - Positive free cash flow of $34 million was achieved in the quarter [6] - Forecasting revenue growth of 10% to 13% for fiscal 2025, with adjusted operating margin of 14% to 15% and adjusted EBITDA margin of 20% to 21% [22] Business Line Data and Key Metrics Changes - Demand at RH England increased by 47% in Q1, with online demand up 44% [7] - European business saw demand growth of 60% across comparable galleries in Munich and Dusseldorf [8] - The introduction of new collections and a significant improvement in stock position were noted, despite a slowdown due to tariffs [23][25] Market Data and Key Metrics Changes - The housing market is described as the worst in nearly fifty years, with existing home sales significantly lower than historical averages [13] - The company is shifting sourcing out of China, expecting receipts from China to decrease from 16% in Q1 to 2% in Q4 [20] - By the end of 2025, 52% of upholstered furniture is projected to be produced in the U.S. and 21% in Italy [21] Company Strategy and Development Direction - The company is focused on creating a global hospitality brand and bespoke interior design business, aiming for long-term strategic separation [15] - Plans to open seven to nine new galleries per year, including significant locations in Paris, London, and Milan [28] - The company is delaying the launch of a new concept to spring 2026 due to tariff uncertainties [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a higher risk business environment due to tariffs, inflation, and global discord but remains optimistic about long-term growth [12] - The company believes it can double its current business by addressing key operational issues [42] - Management is excited about the potential of new gallery openings and the overall brand desirability [11][44] Other Important Information - The company plans to generate $250 million to $350 million in free cash flow in 2025 [18] - Significant investments are being made in iconic global locations, with a focus on creating immersive retail experiences [27] - The company is exploring sale-leaseback transactions for operational assets to optimize cash flow [46] Q&A Session Summary Question: Thoughts on demand planning for Paris, London, and Madrid - Management believes the RH brand can be as disruptive in Europe as in America, with early trends showing potential for significant growth [35][36] Question: Breakdown of the $500 million real estate value - Management indicated that they have several galleries for potential sale-leaseback transactions and a significant portfolio in Aspen [46][49] Question: Assessment of demand spike from recent sales - Management noted that increasing membership discounts has been a long-term strategic move to capture market share during a difficult market [78][81]

Core Viewpoint - RH's shares surged over 15% in extended trading after the company reaffirmed its sales forecast and outlined measures to mitigate tariff-related costs [1] Financial Performance - For the fiscal first quarter ending May 3, RH reported a net income of $8.04 million, or 40 cents per share, compared to a loss of $3.63 million, or 20 cents per share, in the same period last year [1] - The company expects full-year revenue growth of 10% to 13% [1] - Adjusted earnings per share were 13 cents, surpassing the expected loss of 9 cents, while revenue was $814 million, slightly below the expected $818 million [6] Challenges Faced - RH is facing significant challenges from a sluggish real estate market and increased tariffs, with CEO Gary Friedman describing the housing market as the toughest in nearly 50 years [2] - The company's stock fell approximately 40% in April due to tariff announcements and weak quarterly performance [3] Strategic Responses - To counteract tariff impacts, RH is shifting production away from China, expecting receipts from the country to decrease from 16% in Q1 to 2% in Q4 [4] - By the end of the fiscal year, RH anticipates that 52% of its upholstered furniture will be produced in the U.S. and 21% in Italy [4] - The launch of a new concept has been delayed until spring 2026 to gain more clarity on tariffs, having been initially planned for the second half of this year [4] Expansion Plans - RH continues to pursue international expansion, with plans to open a store on Paris' Champs Élysées in early September [5] - Year-to-date, RH shares have declined nearly 55%, underperforming the S&P 500, which has gained approximately 3% during the same period [5]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended May 3, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-35720 (Exact name of registrant as specified in its charter) Delaware 45-3052669 (State or other jurisdiction of ...

Core Viewpoint - RH reported a strong fiscal Q1 2025 financial performance, with adjusted earnings per share beating expectations despite total revenue slightly missing analyst forecasts [2][4][6]. Financial Performance - Total revenue for Q1 2025 was $814 million, a 12% increase from $727 million in Q1 2024, although it fell short of expectations [2][4]. - Adjusted earnings per share improved from a loss of $0.40 in Q1 2024 to a profit of $0.13 in Q1 2025 [2][4]. - Free cash flow turned positive at $34.1 million compared to a negative $10.1 million in the previous year [2]. - Gross margin increased slightly from 43.5% to 43.7%, reflecting a 20 basis points improvement [2]. Market Reaction - Following the positive earnings report, RH's shares surged by 19% in after-hours trading, indicating strong investor confidence [6]. Management Commentary - CEO Gary Friedman expressed pride in the results, highlighting the company's performance in a challenging housing market and attributing success to strategic brand development [5]. - Management maintained its revenue growth guidance for 2025 at 10% to 13%, with expected free cash flow between $250 million and $350 million [7]. Strategic Outlook - The company is shifting production from China to less tariff-sensitive locations, which is anticipated to alleviate tariff-related pressures over time [8]. - Despite previous stock declines, investor sentiment appears to be improving regarding RH's long-term strategic vision as a luxury retail brand [9].

Exhibit 99.2 FIRST QUARTER 2025 FINANCIAL RESULTS AND SHAREHOLDER LETTER A LETTER FROM OUR CHAIRMAN AND CEO RH REPORTS FIRST QUARTER 2025 RESULTS FIRST QUARTER 2025 HIGHLIGHTS GAAP Net Revenues Increased 12% to $814M GAAP Operating Margin of 6.9%, Adjusted Operating Margin of 7.0% GAAP Operating Income of $56M, Adjusted Operating Income of $57M EBITDA Margin of 12.7%, Adjusted EBITDA Margin of 13.1% Please see the tables below for reconciliations of all GAAP to non-GAAP measures referenced in this press rel ...

RH RH will release earnings results for the first quarter, after the closing bell on Thursday, June 12.Analysts expect the Corte Madera, California-based company to report quarterly loss at 7 cents per share, versus a year-ago loss of 40 cents per share. RH projects to report quarterly revenue at $818.57 million, compared to $726.96 million a year earlier, according to data from Benzinga Pro.On May 20, RH named Lisa Chi as President and Co-Chief Merchandising & Creative Officer.RH shares fell 5.5% to close ...

Core Viewpoint - RH is set to report its first-quarter fiscal 2025 results on June 12, with expectations of revenue growth despite challenges in the luxury home furnishings sector [1][7]. Financial Performance - In the last reported quarter, RH's earnings and revenues missed the Zacks Consensus Estimate by 17.3% and 1.8%, respectively, but showed year-over-year increases of 10% and 119.4% [1]. - The adjusted operating margin for the last quarter was 11.3%, reflecting a 220 basis point increase [1]. - The consensus estimate for the upcoming quarter indicates a loss per share of 9 cents, widening from 6 cents, compared to a loss of 40 cents per share in the same quarter last year [4]. Revenue Expectations - The revenue estimate for the upcoming quarter is $818.9 million, representing a 12.6% increase from the previous year [4]. - RH anticipates revenue growth of 12.5-13.5% for the fiscal first quarter, driven by product rollouts and international expansion [9]. Margin Outlook - The company expects an adjusted operating margin between 6.5% and 7% and an adjusted EBITDA margin between 12.5% and 13% for the upcoming quarter [10]. - The anticipated figures indicate slight margin improvement, although start-up costs for international expansion are expected to negatively impact the operating margin by 160-200 basis points [10]. Market Conditions - RH's stock has declined by 18.2% over the past month, influenced by weak sales in the home furnishings sector and uncertainties in the housing market [11]. - The broader industry has also shown weakness, with other players like Lovesac, Williams-Sonoma, and Haverty Furniture experiencing declines [13]. Valuation - RH is currently trading at a forward price-to-earnings (P/E) ratio of 15.02X, which is a discount compared to peers like Lovesac and Williams-Sonoma, trading at 19.31X and 18.03X, respectively [14]. Strategic Initiatives - The company is focusing on product transformation plans for 2025, including the RH Outdoor and Interiors Sourcebooks, alongside international expansion efforts [9]. - Despite facing challenges, RH remains confident in sustaining revenue growth through ongoing strategic initiatives [8].

Group 1 - The upcoming report from RH is expected to show a quarterly loss of $0.09 per share, which is an increase of 77.5% compared to the same period last year [1] - Analysts forecast revenues of $818.24 million for the quarter, representing a year-over-year increase of 12.6% [1] - The consensus EPS estimate has been revised 0.1% higher over the last 30 days, indicating a collective reevaluation by analysts [1][2] Group 2 - Analysts predict that the total number of RH galleries will reach 67, down from 71 in the same quarter last year [4] - The estimated total leased selling square footage at the end of the period is projected to be 1,507.50 Ksq ft, compared to 1,432 Ksq ft in the same quarter last year [5] - The consensus estimate for the number of RH Design Galleries is 35, up from 33 in the same quarter last year [5] Group 3 - The consensus for the number of RH Baby & Child and Teen Galleries is 2, down from 3 a year ago [6] - The estimated total store count at the end of the period is 84, compared to 85 in the same quarter last year [6] - Analysts estimate that the number of RH Legacy Galleries will be 26, down from 34 in the same quarter last year [7] Group 4 - Over the past month, RH shares have recorded a return of -18.2%, while the Zacks S&P 500 composite has changed by +6.3% [7] - Based on its Zacks Rank 3 (Hold), RH is expected to perform in line with the overall market in the upcoming period [7]