RH (RS1) AI Stock Analysis

Company Guidance

RH’s updated fiscal year 2026 outlook calls for revenue growth of 5.5% to 7%, adjusted EBITDA margin of 15% to 16.2%, and free cash flow, asset sales and distribution of equity method investments of $300 million to $400 million, including an approximate negative 340 basis point adjusted EBITDA margin impact from preopening and start-up costs to support our international expansion; third quarter 2026 outlook is revenue growth of 5% to 6%, inclusive of backlog reduction of 2.5 points, RH Estates of 2 points, New Galleries and other, 1 point, and adjusted EBITDA margin of 12.5% to 13.5%, including an approximate negative 310 basis point impact; fourth quarter 2026 outlook is revenue growth of 16.1% to 21.2%, inclusive of backlog reduction of 6.5 points, RH Estates growth of 8 points, new Galleries and other of 4 points, and adjusted EBITDA margin of 19.7% to 22.9%, including an approximately negative 190 basis points impact. RH expects the drag from International to decrease from 340 basis points in 2026 to 150 basis points in 2027, adjusted capital expenditures to decrease from $240 million to $260 million in 2026 to $175 million to $200 million in 2027, new gallery opening costs to decrease from $48 million in 2026 to $18 million in 2027, and RH Estates to represent 50% of the offering over the next 5 years; RH Compounds are projected to have a payback in the 12- to 18-month range.