RH(RH) - 2026 Q4 - Annual Results

Financial Performance - GAAP Net Revenues for Q4 2025 increased by 3.7% to $843 million[4] - GAAP Net Income for Q4 2025 rose by 107% to $29 million[4] - Fiscal Year 2025 GAAP Net Revenues increased by 8.1% to $3.44 billion[5] - Fiscal Year 2025 GAAP Net Income increased by 72% to $125 million[5] - Net revenues for the three months ended January 31, 2026, were $842,623,000, representing a 3.0% increase from $812,406,000 in the same period of 2025[19] - Net income for the year ended January 31, 2026, was $124,787,000, a significant increase from $72,412,000 in 2025, resulting in a net income margin of 3.6%[19] - Net revenues for the year ended January 31, 2026, reached $3,439,536,000, compared to $3,180,753,000 in the previous year, representing an 8.1% increase[31] - Net income for Q4 2025 was $28,775 thousand, representing a significant increase of 106.3% compared to $13,917 thousand in Q4 2024[39] Cash Flow and Assets - Free Cash Flow for Q4 2025 was $55 million, and for Fiscal Year 2025 it was $252 million[4][5] - Cash and cash equivalents increased to $41,191,000 as of January 31, 2026, compared to $30,413,000 at the end of the previous year[21] - Total assets grew to $4,835,710,000 as of January 31, 2026, up from $4,554,689,000 in 2025[21] - Free cash flow for the year ended January 31, 2026, was $252,398,000, compared to a negative free cash flow of $(213,693,000) in 2025[23] Profitability Metrics - Gross profit for the year ended January 31, 2026, was $1,515,757,000, which is 44.1% of net revenues, compared to $1,414,932,000 or 44.5% in 2025[19] - Adjusted gross margin for the year ended January 31, 2026, was 44.2%, slightly down from 44.5% in the previous year[31] - The company reported a gross margin of 44.1% for the year ended January 31, 2026, compared to 44.5% in the previous year[31] - The operating margin for Q4 2025 improved to 11.5%, up from 8.7% in Q4 2024[37] - The EBITDA margin for Q4 2025 was 16.2%, compared to 12.2% in Q4 2024[39] Debt and Liabilities - Total debt as of January 31, 2026, is $2,419,065,000[44] - Total net debt is $2,377,874,000, resulting in a ratio of total net debt to adjusted EBITDA of 4.0[44][46] - The company incurred interest expenses of $225,378,000 for the year ended January 31, 2026, which is 6.5% of total revenues, compared to $230,601,000 or 7.2% in 2025[19] - The interest rate for Term loan B is 6.29% and for Term loan B-2 is 7.02%[44] - The asset-based credit facility has an interest rate of 5.30%[44] Future Projections - Fiscal Year 2026 revenue growth is projected to be between 4% to 8%[7] - Adjusted EBITDA Margin for Fiscal Year 2026 is expected to be between 14% to 16%[7] - First Quarter 2026 revenue growth is projected to decline by 2% to 4%[8] Operational Highlights - RH's 2-year revenue growth outpaced industry peers by 7 to 30 basis points, with RH at 15%[11] - The company plans to open Design Galleries in every major market, targeting revenues of $5 to $6 billion in North America[15] - Selling, general and administrative expenses for Q4 2025 were $264,878 thousand, a decrease of 9.4% from $292,468 thousand in Q4 2024[35] - Adjusted EBITDA for Q4 2025 was $149,141 thousand, an increase of 7.6% from $138,815 thousand in Q4 2024[39]