RH Shares Recover After Q1 Beat, RH Estates Launch in Milan

MILAN — Despite a dip in fiscal first-quarter revenues and earnings per share, investors appear to remain positive on upscale American furniture-maker RH.

Late Thursday, the firm reported a slightly above forecast revenue figure of $800.3 million, which fell 1.7 percent and beat an April RH forecast of a 2 to 4 percent decline in sales. In the three-month period ended May 2, the firm reported a net loss of $13.7 million versus net income of $8.04 million in the same period a year earlier. Losses per share loss came in at $1.97. Analysts were forecasting a larger loss of between $2.07 and $2.12 a share.

In after-hours trade, RH shares rose 7.49 percent to $159.3. This compares to a five-year low of $113.4 the firm’s shares hit after its full-year 2025 results missed expectations. Analysts see the RH Estates extension bolstering business in the near-to-medium term.

RH Estates

“We remain positive on RH’s product transformation, revenue contribution from international stores and the new brand extension, RH Estates, focused on classic and antique styles that broadens RH’s aesthetic and customer reach,” said Telsey Group analyst Cristina Fernandez in a note.

Launched during the Hollywood-style opening of RH Milan during Milan Design Week, RH Estates is a new concept that features original designs from famed California interior designer Michael Taylor, the pioneer of the California Look, as well as newly acquired to-the-trade brands such as Formations, Dennis & Leen and Joseph Jeup. It also has introduced RH Couture Upholstery by Dmitriy & Co. and RH Bespoke Furniture, offering customizable sizes, finishes and fabrics tailored for clients and interior designers. The RH Sourcebook is expected next week.

In an interview with WWD at the time, RH chief executive officer and chairman Gary Friedman said the company has taken strides to elevate its furniture with designer collaborations with Milan-based Arthur Gentil, contending RH is the biggest importer of Italian upholstery.

“I think [RH Estates] will do well everywhere. I think it’s the next evolution of our brand. We’ve been working on it now for three years. It’s a level of design and quality we’ve never been at yet. And just a level of design and quality that hasn’t been accessible to the consumer — just mostly to the trade showroom,” Friedman said.

A Global Furniture Market report released earlier this month by Deloitte shows the industry reaching 798.5 billion euros in 2025, with that figure set to rise to 872.6 billion euros by 2029, driven by an increasing appetite in lighting design and smart home integration. Market watchers still remain cautious on the effects of the global housing market and the conflict in the Middle East.

Trimming Debt

In the case of RH, its investment spending to scale the international business still remains a concern. New galleries are expected to open in London in Mayfair by the end of June, with the Aspen gallery expected to open in November.

During the call, RH’s debt position was a worry for analysts like Morgan Stanley’s Simeon Gutman, who asked about RH’s plan to be debt-free by 2029. Friedman said the firm remains focused on asset sales to pay off its $2.4 billion debt, having most recently sold a property in Aspen.

With its galleries in Milan, Paris and now London Mayfair opening, RH’s positioning in Europe is complete.

“We’ve meaningfully higher brand awareness, and we’ve been open out in the Cotswolds, the English countryside now for three years. We’re kind of just getting started in Paris, we’re just open in Milan, we like what we see,” he said.

As a result of its better-than-expected first-quarter results, RH raised its outlook for fiscal year 2026. It raised its revenue growth forecast to 4.5 percent to 8 percent from 4 to 8 percent. In the second quarter of 2026, it sees revenues rising between 0.5 percent and 2.25 percent.