Operating margins have compressed sharply to 4.3% in 2026Q1 from a 15.0% peak in 2025Q2, reflecting the company's inability to maintain profitability during a 1.7% year-over-year revenue decline.
| Metric | TTM | Jan'26 | Jan'25 | Jan'24 | Jan'23 | Jan'22 | Jan'21 | Jan'20 | Jan'19 | Jan'18 | Jan'17 | Jan'16 | Jan'15 | Jan'14 | Jan'13 | Jan'12 | Jan'11 | Jan'10 | Jan'08 | Jan'07 | Jan'06 | Jan'05 | Jan'04 | Jan'03 | Jan'02 | Jan'01 | Jan'00 | Jan'99 |
|---|
| Sales/Revenue | 3.43B | 3.44B | 3.18B | 3.03B | 3.59B | 3.76B | 2.85B | 2.65B | 2.51B | 2.44B | 2.13B | 2.11B | 1.87B | 1.55B | 1.19B | 958.08M | 772.75M | 625.68M | 722.24M | 712.81M | 581.66M | 525.82M | 438.51M | 400.34M | 366.47M | 369.46M | 294.92M | 209.38M |
| Revenue Growth % | 4.84% | 8.14% | 5.01% | -15.63% | -4.48% | 31.95% | 7.6% | 5.66% | 2.68% | 14.3% | 1.23% | 12.94% | 20.4% | 30% | 24.52% | 23.98% | 23.51% | -13.37% | 1.32% | 22.55% | 10.62% | 19.91% | 9.53% | 9.24% | -0.81% | 25.28% | 40.86% | - |
| Cost of Goods Sold | 1.93B | 1.92B | 1.77B | 1.64B | 1.78B | 1.9B | 1.52B | 1.55B | 1.5B | 1.59B | 1.46B | 1.36B | 1.18B | 994.08M | 756.6M | 601.74M | 501.13M | 412.63M | 490.94M | 463.11M | 384.24M | 359.81M | 305.98M | 283.07M | 288.34M | 255.92M | 203.24M | 141.4M |
| COGS % of Revenue | - | 55.93% | 55.52% | 54.14% | 49.53% | 50.64% | 53.47% | 58.64% | 60.06% | 65.2% | 68.16% | 64.31% | 63.01% | 64.09% | 63.42% | 62.81% | 64.85% | 65.95% | 67.97% | 64.97% | 66.06% | 68.43% | 69.78% | 70.71% | 78.68% | 69.27% | 68.91% | 67.53% |
| Gross Profit | 1.49B | 1.52B | 1.41B | 1.39B | 1.81B | 1.86B | 1.33B | 1.1B | 1B | 849.07M | 679.79M | 752.69M | 690.77M | 556.88M | 436.45M | 356.35M | 271.62M | 213.06M | 231.31M | 249.71M | 197.41M | 166.01M | 132.53M | 117.27M | 78.14M | 113.54M | 91.68M | 67.98M |
| Gross Margin % | 43.54% | 44.07% | 44.48% | 45.86% | 50.47% | 49.36% | 46.53% | 41.36% | 39.94% | 34.8% | 31.84% | 35.69% | 36.99% | 35.91% | 36.58% | 37.19% | 35.15% | 34.05% | 32.03% | 35.03% | 33.94% | 31.57% | 30.22% | 29.29% | 21.32% | 30.73% | 31.09% | 32.47% |
| Gross Profit Growth % | - | 7.13% | 1.87% | -23.34% | -2.34% | 39.97% | 21.05% | 9.41% | 17.88% | 24.9% | -9.69% | 8.96% | 24.04% | 27.59% | 22.48% | 31.19% | 27.49% | -7.89% | -7.37% | 26.49% | 18.91% | 25.27% | 13.02% | 50.08% | -31.18% | 23.85% | 34.86% | - |
| Operating Expenses | 1.12B | 1.13B | 1.05B | 1.03B | 1.07B | 922.34M | 839.52M | 728.27M | 732.03M | 709.17M | 602.85M | 565.33M | 517.05M | 468.23M | 505.49M | 329.51M | 274.84M | 238.89M | 264.23M | 239.08M | 196.17M | 161.94M | 135.12M | 126.29M | 114.61M | 109.42M | 95.03M | 60.78M |
| OpEx % of Revenue | - | 32.81% | 32.92% | 33.87% | 29.69% | 24.54% | 29.47% | 27.51% | 29.22% | 29.06% | 28.24% | 26.81% | 27.69% | 30.19% | 42.37% | 34.39% | 35.57% | 38.18% | 36.58% | 33.54% | 33.73% | 30.8% | 30.81% | 31.55% | 31.27% | 29.62% | 32.22% | 29.03% |
| Selling, General & Admin | 1.12B | 1.13B | 1.05B | 1.03B | 1.07B | 922.34M | 839.52M | 728.27M | 732.03M | 711.37M | 602.85M | 565.33M | 517.05M | 468.23M | 505.49M | 329.51M | 274.84M | 238.89M | 264.23M | 239.08M | 196.17M | 161.94M | 135.12M | 126.29M | 114.61M | 111.63M | 92.63M | 56.75M |
| SG&A % of Revenue | - | 32.81% | 32.92% | 33.87% | 29.69% | 24.54% | 29.47% | 27.51% | 29.22% | 29.15% | 28.24% | 26.81% | 27.69% | 30.19% | 42.37% | 34.39% | 35.57% | 38.18% | 36.58% | 33.54% | 33.73% | 30.8% | 30.81% | 31.55% | 31.27% | 30.21% | 31.41% | 27.1% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -2.21M | 2.4M | 4.04M |
| Operating Income | 369.97M | 387.27M | 367.75M | 363.18M | 746.08M | 933.08M | 488.41M | 371.64M | 260.4M | 139.39M | 84.64M | 204.56M | 173.73M | 88.65M | -69.04M | 26.84M | -1.12M | -23.53M | -32.92M | 10.63M | 1.24M | 4.08M | -1.88M | -9.03M | -36.47M | 892K | -3.35M | 9.16M |
| Operating Margin % | 10.8% | 11.26% | 11.56% | 11.99% | 20.78% | 24.82% | 17.15% | 14.04% | 10.39% | 5.71% | 3.96% | 9.7% | 9.3% | 5.72% | -5.79% | 2.8% | -0.14% | -3.76% | -4.56% | 1.49% | 0.21% | 0.78% | -0.43% | -2.25% | -9.95% | 0.24% | -1.14% | 4.38% |
| Operating Income Growth % | - | 5.31% | 1.26% | -51.32% | -20.04% | 91.04% | 31.42% | 42.72% | 86.81% | 64.7% | -58.63% | 17.75% | 95.97% | 228.41% | -357.18% | 2505.29% | 95.26% | 28.52% | -409.77% | 754.34% | -69.48% | 317.39% | 79.22% | 75.25% | -4188.68% | 126.6% | -136.6% | - |
| EBITDA | 521.98M | 535.77M | 497.95M | 482.17M | 929.85M | 1.1B | 652.59M | 537.58M | 420.38M | 209.53M | 141.63M | 249.16M | 208.19M | 116.31M | -42.29M | 56.03M | 30.15M | 19.53M | -9.8M | 32.32M | 20.85M | 20.02M | 16.15M | 9.62M | -15.85M | 16.81M | 7.43M | 15.64M |
| EBITDA Margin % | 15.24% | 15.58% | 15.65% | 15.92% | 25.9% | 29.31% | 22.91% | 20.31% | 16.78% | 8.59% | 6.63% | 11.81% | 11.15% | 7.5% | -3.54% | 5.85% | 3.9% | 3.12% | -1.36% | 4.53% | 3.58% | 3.81% | 3.68% | 2.4% | -4.32% | 4.55% | 2.52% | 7.47% |
| EBITDA Growth % | 5.62% | 7.6% | 3.27% | -48.15% | -15.59% | 68.8% | 21.39% | 27.88% | 100.63% | 47.94% | -43.16% | 19.68% | 79% | 375.03% | -175.48% | 85.85% | 54.35% | 299.27% | -130.32% | 55.05% | 4.12% | 24.01% | 67.91% | 160.68% | -194.29% | 126.08% | -52.47% | - |
| D&A (Non-Cash Add-back) | 152.01M | 148.5M | 130.19M | 118.99M | 183.77M | 168.5M | 164.17M | 165.93M | 159.98M | 70.14M | 56.99M | 44.59M | 34.46M | 27.65M | 26.75M | 29.19M | 31.26M | 43.06M | 23.12M | 21.7M | 19.6M | 15.95M | 18.02M | 18.64M | 20.62M | 15.91M | 10.79M | 6.48M |
| EBIT | 367.85M | 392.32M | 323.09M | 404.6M | 591.07M | 897.2M | 447.95M | 357.69M | 229.57M | 93.23M | 56.02M | 187.5M | 165.73M | 54.85M | -69.04M | 26.84M | -3.22M | -25.83M | -43.15M | 10.63M | 944K | 4.08M | -1.88M | 400.34M | 366.47M | 366.24M | -3.35M | 211.35M |
| Net Interest Income | -221.44M | -225.38M | -230.6M | -198.3M | -113.21M | -64.95M | -69.25M | -87.18M | -67.77M | -62.57M | -44.48M | -35.68M | -17.55M | -5.73M | -5.78M | -5.13M | -3.15M | -3.24M | -8.66M | -7.23M | -4.05M | -2.47M | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 852K | 0 | 3.9M | 39.6M | 38.52M | 1.94M | 1.4M | 1.33M | 834K | 514K | 2.99M | 1.94M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 222.29M | 225.38M | 234.5M | 237.9M | 151.73M | 66.88M | 70.65M | 88.51M | 68.6M | 63.08M | 47.47M | 37.62M | 17.55M | 5.73M | 5.78M | 5.13M | 3.15M | 3.24M | 8.66M | 7.23M | 4.05M | 2.47M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -226.69M | -220.33M | -290.54M | -207.36M | -308.79M | -110.97M | -112M | -102.46M | -99.43M | -109.24M | -76.08M | -54.68M | -25.55M | -39.53M | -5.78M | -5.13M | -5.25M | -5.54M | -18.89M | -7.23M | -4.35M | -2.47M | -2.15M | -1.84M | -3.23M | -7.16M | -1.42M | -918K |
| Pretax Income | 143.27M | 166.94M | 77.21M | 155.82M | 437.28M | 822.1M | 376.41M | 269.18M | 160.96M | 30.15M | 8.55M | 149.88M | 148.18M | 49.12M | -74.81M | 21.71M | -6.37M | -29.07M | -51.81M | 3.4M | -3.11M | 1.6M | -4.03M | -10.86M | -39.7M | -6.27M | -4.77M | 8.25M |
| Pretax Margin % | 4.18% | 4.85% | 2.43% | 5.14% | 12.18% | 21.87% | 13.21% | 10.17% | 6.42% | 1.24% | 0.4% | 7.11% | 7.93% | 3.17% | -6.27% | 2.27% | -0.82% | -4.65% | -7.17% | 0.48% | -0.53% | 0.3% | -0.92% | -2.71% | -10.83% | -1.7% | -1.62% | 3.94% |
| Income Tax | 39.78M | 42.15M | 4.8M | 28.26M | -91.36M | 133.56M | 104.6M | 48.81M | 30.51M | 27.97M | 3.15M | 58.78M | 57.17M | 30.92M | -62.02M | 1.12M | 685K | -423K | 127K | 143K | 26.2M | -100K | -1.8M | -8.52M | -9.75M | -1.82M | -1.73M | 3.38M |
| Effective Tax Rate % | 27.77% | 25.25% | 6.22% | 18.14% | -20.89% | 16.25% | 27.79% | 18.13% | 18.96% | 92.77% | 36.86% | 39.22% | 38.58% | 62.96% | 82.91% | 5.16% | -10.76% | 1.45% | -0.25% | 4.21% | -843.56% | -6.23% | 44.75% | 78.41% | 24.55% | 29.05% | 36.31% | 41% |
| Net Income | 103.05M | 124.79M | 72.41M | 127.56M | 528.64M | 688.55M | 271.81M | 220.38M | 150.64M | 2.18M | 5.4M | 91.1M | 91M | 18.2M | -12.79M | 20.59M | -8.07M | -28.65M | -51.94M | 3.25M | -29.31M | 1.7M | -2.94M | -3.6M | -33.87M | -3.09M | -3.04M | 4.87M |
| Net Margin % | 3.01% | 3.63% | 2.28% | 4.21% | 14.72% | 18.32% | 9.54% | 8.32% | 6.01% | 0.09% | 0.25% | 4.32% | 4.87% | 1.17% | -1.07% | 2.15% | -1.04% | -4.58% | -7.19% | 0.46% | -5.04% | 0.32% | -0.67% | -0.9% | -9.24% | -0.84% | -1.03% | 2.32% |
| Net Income Growth % | 22.57% | 72.33% | -43.23% | -75.87% | -23.22% | 153.31% | 23.34% | 46.29% | 6810.05% | -59.64% | -94.07% | 0.11% | 400.15% | 242.27% | -162.12% | 354.99% | 71.82% | 44.83% | -1697.05% | 111.1% | -1819.89% | 157.94% | 18.37% | 89.36% | -995.66% | -1.68% | -162.47% | - |
| Net Income (Continuing) | 103.49M | 124.79M | 72.41M | 127.56M | 528.64M | 688.55M | 271.81M | 220.38M | 135.73M | -2.6M | 5.4M | 91.1M | 91M | 18.2M | -12.79M | 20.59M | -7.05M | -28.65M | -51.94M | 3.25M | -29.31M | 1.7M | -2.52M | -2.85M | -32.14M | -4.71M | -3.04M | 4.87M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 5.47 | 6.31 | 3.62 | 5.91 | 19.90 | 22.13 | 9.96 | 9.07 | 5.68 | 0.07 | 0.13 | 2.16 | 2.20 | 0.45 | -0.38 | 0.64 | -0.25 | -0.89 | -1.34 | 0.08 | -0.83 | 0.04 | -0.10 | -0.14 | -1.57 | -0.18 | -0.18 | 0.33 |
| EPS Growth % | 23.33% | 74.31% | -38.75% | -70.3% | -10.08% | 122.19% | 9.81% | 59.68% | 8014.29% | -46.15% | -93.98% | -1.82% | 388.89% | 218.42% | -159.38% | 356% | 71.91% | 33.58% | -1775% | 109.64% | -2175% | 141.97% | 31.93% | 91.08% | -772.22% | 0% | -154.55% | - |
| EPS (Basic) | - | 6.65 | 3.92 | 6.42 | 22.47 | 32.37 | 13.82 | 11.55 | 5.68 | 0.08 | 0.13 | 2.27 | 2.31 | 0.47 | -0.38 | 0.64 | -0.25 | -0.89 | -1.34 | 0.09 | -0.83 | 0.05 | -0.10 | -0.14 | -1.57 | -0.18 | -0.18 | 0.33 |
| Diluted Shares Outstanding | 18.85M | 19.79M | 19.99M | 21.6M | 26.56M | 31.11M | 27.3M | 24.3M | 26.53M | 29.25M | 40.93M | 42.26M | 41.38M | 40.42M | 33.94M | 32.19M | 32.19M | 32.19M | 38.83M | 39.22M | 35.44M | 42.6M | 30.87M | 25.86M | 21.57M | 16.81M | 16.7M | 11.72M |
| Basic Shares Outstanding | 18.85M | 18.75M | 18.49M | 19.88M | 23.52M | 21.27M | 19.67M | 19.08M | 26.51M | 27.05M | 40.69M | 40.19M | 39.46M | 38.67M | 33.92M | 32.19M | 32.19M | 32.19M | 38.83M | 38.18M | 35.44M | 34.08M | 30.87M | 25.86M | 21.57M | 16.81M | 16.7M | 11.72M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
High fixed cost leverage
According to recent financial disclosures, RH's revenue growth has turned negative, with the company reporting a 1.7% year-over-year decline in 2026Q1, signaling that the luxury home furnishings market is struggling to maintain the momentum observed in previous quarters where growth peaked at 12.0% in 2025Q1.
The shift from positive growth to contraction suggests that the company's reliance on high-end housing turnover is becoming a significant liability in the current interest rate environment. Investors should monitor whether the recent international expansion efforts can offset the cooling domestic demand, as the current trajectory indicates a potential saturation of the core US luxury market.
Based on reported income statements, RH has maintained a relatively stable gross margin profile, hovering around 41.4% to 45.5% over the last ten quarters, which suggests that the brand retains significant pricing power despite the broader macroeconomic pressures impacting the consumer cyclical sector.
While the gross margin remains robust compared to peers like Arhaus, the inability to consistently expand these margins suggests that rising fulfillment and occupancy costs are effectively neutralizing pricing gains. This structural tension implies that the company's luxury positioning is being tested by the rising costs of maintaining its expansive gallery footprint.
As reported in recent filings, RH's operating margin compressed to 4.3% in 2026Q1, a sharp decline from the 15.0% peak seen in 2025Q2, indicating that the company's high fixed-cost structure is failing to scale efficiently during periods of top-line revenue contraction.
The volatility in operating income suggests that the company's massive real estate investments are creating a high break-even point that leaves little room for error. Investors should be concerned that the current SG&A levels, while managed, are not flexible enough to protect profitability when revenue growth turns negative.
Financial statements reveal that RH's net income has become increasingly erratic, swinging from a $51.7M profit in 2025Q2 to a $13.7M loss in 2026Q1, a trend that appears heavily influenced by fluctuating operating expenses and the impact of stock-based compensation on bottom-line results.
The inconsistency in net income suggests that the company's earnings are sensitive to non-operating items and the timing of strategic investments. The presence of recurring stock-based compensation, which reached $11.9M in 2026Q1, further complicates the assessment of true operational profitability and warrants caution regarding the sustainability of reported EPS.
Data from recent quarterly reports indicates that RH's net margin has contracted to -1.7% in 2026Q1, raising questions about whether the company's 'luxury platform' strategy can remain viable if the core retail business continues to face sustained margin compression and high interest expense burdens.
Short-sellers may focus on the company's low cash position of $41M relative to its significant debt load, which limits the margin for error in a prolonged downturn. The reliance on expensive, architecturally significant galleries may prove to be a liability if the brand's aesthetic loses its aspirational appeal, potentially leading to asset impairment risks.
Quick answers to the most common questions about buying RH stock.
For fiscal year 2025, Rh (RH) reported total revenue of $3.44B. This represents a 1542.8% increase compared to $209.4M in 1998.
Rh (RH) is profitable, generating $124.8M in net income for the fiscal year ending 2025 with a net profit margin of 3.6%.
Rh (RH) reported an operating income of $387.3M, resulting in an operating profit margin of 11.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Rh (RH) generated $1.52B in gross profit for the year, representing a gross profit margin of 44.1%. This demonstrates the company's core pricing power and production efficiency.