Q1 2025 RH Earnings Call Transcript
Key Points
- RH (RH) reported a 12% increase in revenue for the first quarter of fiscal 2025, despite challenges in the housing market.
- The company achieved an adjusted operating margin of 7% and an adjusted EBITDA margin of 13.1%, both at the high end of expectations.
- RH (RH) generated positive free cash flow of $34 million in the quarter.
- The company's international expansion is showing promising results, with RH England's Gallery demand up 47% and online demand up 44% in the first quarter.
- RH (RH) is forecasting revenue growth of 10% to 13% for fiscal 2025, with an adjusted EBITDA margin of 20% to 21%.
- The company is facing challenges due to tariff uncertainties and the worst housing market in almost 50 years.
- RH (RH) has delayed the launch of a new concept planned for the second half of 2025 to Spring 2026 due to tariff uncertainties.
- The company is dealing with significant debt, largely due to stock repurchases, and is paying high interest expenses.
- There was a disruption in shipments and resourcing efforts due to unexpected Liberation Day Tariffs, impacting revenues by approximately 6 points in the second quarter.
- The outdoor furniture business experienced a slowdown following reciprocal tariffs and a compressed peak selling season.
Ladies and gentlemen, thank you for standing by. Today's conference will begin momentarily. (Operator Instructions) Thank you for your patience.
Thanks or hello, and welcome to the RH first-quarter 2025 earnings call. (Operator Instructions) I would now like to turn the conference over to Allison Malkin of ICR. You may begin.
Thank you. Good afternoon, everyone. Thank you for joining us for our first quarter fiscal 2025 earnings call. Joining me today are Gary Friedman, Chairman and Chief Executive Officer; and Jack Preston, Chief Financial Officer.
Before we start, I would like to remind you of our legal disclaimer that we will make certain statements today that are forward-looking within the meaning of the federal securities laws, including statements about the outlook, about the business, and other matters referenced in our press release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to
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