RH (Restoration Hardware) has reported significant financial growth in the fourth quarter and full fiscal year 2024, despite challenges in the housing market. The luxury home furnishing brand has positioned itself for continued expansion with increased revenues, profitability, and strategic brand developments.
Financial highlights
In the fourth quarter of 2024, RH achieved GAAP net revenues of $812 million, marking a 10% increase. GAAP operating income rose to $70 million (up 9%), with adjusted operating income at $92 million (up 38%). The GAAP operating margin was 8.7%, while the adjusted operating margin stood at 11.3%. Additionally, GAAP net income reached $14 million, with adjusted net income at $32 million and an adjusted EBITDA margin of 17.1%.
On a comparable 13-week basis, net revenues rose by 18%, operating income increased by 25%, and adjusted operating income soared by 57%. Fourth quarter demand grew by 17%, with RH Brand demand up by 21%.
For the full fiscal year 2024, RH recorded GAAP net revenues of $3.181 billion, reflecting a 5% growth. The company achieved a GAAP operating margin of 10.1% and an adjusted operating margin of 11.3%. GAAP net income was reported at $72 million, with adjusted net income of $107 million and an adjusted EBITDA margin of 16.9%.
Strategic insights
CEO Gary Friedman highlighted RH's resilient performance despite a challenging housing market: 'We've been operating in the worst housing market in almost 50 years. Despite that fact, we are performing at a level most would expect in a robust housing market. We believe it's a result of investing with a very narrow focus and a long-term view.'
Friedman added, 'The positive inflection of our business continued to accelerate in the fourth quarter with revenue up 18%, and adjusted operating income increasing 57%, outperforming other home furnishing businesses by a wide margin.'
Future outlook and expansion
RH has ambitious plans for fiscal year 2025, including revenue growth of 10% to 13% and an adjusted operating margin of 14% to 15%. The company aims to launch new design and outdoor galleries, including flagship spaces in Paris and other global locations.
Commenting on the company's strategic direction, Friedman stated, 'We have worked hard to destroy the former version of ourselves and are in the process of unleashing what we believe is an exponentially more inspiring and disruptive RH brand.'
RH's product transformation will include new collections in outdoor and interior furnishing, along with an innovative brand extension planned for Fall 2025. Additionally, the company plans to expand its platform with new concept galleries and immersive brand experiences.
Looking ahead
Despite ongoing challenges, RH remains optimistic about its continued growth and strategic initiatives. As Friedman expressed, 'Our intentions and attention to detail are reflected in everything we do, and in every house we turn into a home.'
More information:
RH
www.rh.com