RH revenue rises 2.6% to $922.2 million as tariff refunds lift profitability

RH (NYSE: RH) reported second-quarter fiscal 2026 GAAP net revenues of $922.2 million, up 2.6%, and GAAP net income of $60.2 million for the quarter ended August 1. The September 10 shareholder letter also disclosed a $55.1 million tariff benefit included in Adjusted EBITDA, making the distinction between its reported and Normalized Adjusted EBITDA measures central to reading the quarter.

Revenue and GAAP results

RH said revenue exceeded the high end of its guidance and revenue growth accelerated 4.2 percentage points from the first quarter. The company presented no adjustments to GAAP net revenues.

EBITDA stack: GAAP path vs Adjusted vs Normalized

The profitability measures tell different parts of the story. Alongside GAAP net income of $60.2 million, RH reported EBITDA of $168.3 million and an EBITDA margin of 18.3%. Adjusted EBITDA was $178.5 million, with a 19.4% margin, inclusive of $55.1 million, or 600 basis points, of tariff benefit. Separately, Normalized Adjusted EBITDA was $123.5 million, with a 13.4% margin. These EBITDA measures are distinct from GAAP net income. RH said the Normalized Adjusted EBITDA margin also exceeded the high end of its guidance for adjusted EBITDA margin.

IEEPA tariff refunds and inventory cost timing

The tariff benefit came from IEEPA tariff refunds. RH said second-quarter gross margins benefited from recognition of about $55 million against an application for a total refund of about $69 million. It recognized another $14 million as a reduction in merchandise inventory costs, with that benefit expected to reach gross margins in the third and fourth quarters of fiscal 2026.

Tariff benefit uses and second-half timing

In its more precise earnings discussion, RH put the second-quarter tariff benefit at $55.1 million and the additional benefit expected in the second half at $13.9 million. The company said it plans to use tariff proceeds to offset $50 million of unplanned supply-chain cost increases tied to an oil-price spike and the Middle East conflict. It said the remaining $19 million would benefit earnings and was included in its updated fiscal 2026 Adjusted EBITDA margin outlook.

Cash generation and Aspen JV distribution

RH reported cash generation of $72.3 million, inclusive of Free Cash Flow and a $42.0 million distribution from Aspen Joint Ventures. That cash-generation figure excludes $69.2 million of cash received for tariff refunds; it is not a standalone Free Cash Flow figure.

Updated fiscal 2026 outlook

For fiscal 2026, RH now projects revenue growth of 5.5% to 7.0% and an Adjusted EBITDA margin of 15.0% to 16.2%. Its outlook for Free Cash Flow, Asset Sales and Distribution of Equity Method Investments is $300 million to $400 million. The margin outlook includes an approximately negative 340-basis-point impact from international pre-opening and startup costs.

Third and fourth quarter outlook

The company's quarterly outlook puts more revenue growth in the fourth quarter. RH forecasts third-quarter revenue growth of 5.0% to 6.0% and an Adjusted EBITDA margin of 12.5% to 13.5%, including an approximately negative 310-basis-point impact from international pre-opening and startup costs. For the fourth quarter, it forecasts revenue growth of 16.1% to 21.2% and an Adjusted EBITDA margin of 19.7% to 22.9%, including an approximately negative 190-basis-point impact from those costs. These are company projections, not reported results.

Form 8-K release and conference call

RH released the results through a shareholder letter from Chairman and CEO Gary Friedman, furnished with its September 10 Form 8-K under Items 2.02 and 9.01. Leadership hosted its results call at 2 p.m. Pacific, or 5 p.m. Eastern, that day; the release directed investors to ir.rh.com for the webcast and replay.