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RH Investors Look Beyond Q3 Miss Toward Antiques Push And Global Growth

BY Benzinga | ECONOMIC | 01:24 PM EST

RH shares rose Friday even after the luxury retailer missed Q3 earnings estimates and cut full-year guidance. Investors appeared to focus on long-term expansion plans rather than immediate headwinds.

Q3 Miss & Guidance Cuts

RH reported earnings of $1.71 per share, missing the $2.16 analyst estimate by 20.87%. Following the print, Telsey Advisory Group analyst Cristina Fern?ndez reiterated a Market Perform rating but lowered her price target from $220 to $185.

Fern?ndez cited tariff pressures on backlogs and costs from the RH Paris opening as key drivers for the miss. Consequently, RH narrowed 2025 sales growth guidance to 9.0%?9.2% (previously 9%?11%) and cut operating margin outlook to 11.6%?11.9% (from 13%?14%).

Also Read: RH Analysts Slash Their Forecasts Following Q3 Earnings

Revised Analyst Outlook

Fern?ndez lowered her 2025 EPS estimate to $7.20 (from $9.10) on $3.47 billion in revenue. For 2026, she cut her EPS forecast to $10.15 (from $12.35), citing headwinds from tariffs and upcoming gallery openings in London and Milan.

Strategic Pivot: RH Antiques Despite the cuts, Fern?ndez remains constructive on RH's product evolution. The company plans to launch RH Antiques in spring 2026, shifting toward classic styles after years of modern emphasis. This rollout follows the acquisition of the Michael Taylor brand, famous for its Diamond table, and will debut alongside the RH Milan opening in April.

New antique galleries are planned for San Francisco, West Hollywood, and Greenwich, Connecticut.

Strong Unit Economics

The analyst highlighted clear bright spots:

  • RH Ocean Grill (Newport) generates roughly $20 million in annual sales.
  • Palm Desert design studio delivers $1 million in monthly demand.
  • RH Paris is showing sharp demand gains.

Fern?ndez noted RH still expects $250 million to $300 million in free cash flow for 2025, with capital spending expected to ease as international investments wind down.

RH Price Action: Rh shares were up 8.77% at $166.76 at the time of publication on Friday, according to Benzinga Pro data.

Read Next:

  • Lululemon, Broadcom And 3 Stocks To Watch Heading Into Friday

Photo: Piotr Swat / Shutterstock

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