---
title: "RH's core profit fell a third even as a $55.1 million refund lifted earnings to $2.70"
url: "https://etf.net/news/rh-s-core-profit-fell-a-third-even-as-a-55-1-million-refund-lifted-earnings-to-2-70-2026-09-10"
published_at: "2026-09-11T00:19:36.421Z"
updated_at: "2026-09-11T00:19:36.421Z"
byline: "ETF.net Research"
---

# RH's core profit fell a third even as a $55.1 million refund lifted earnings to $2.70

RH on September 10, 2026 reported $2.70 a share of adjusted earnings after a $55.1 million IEEPA tariff refund, while normalized adjusted EBITDA fell to $123.5 million from $185.1 million.

By ETF.net Research. Published Sep 11, 2026.

Normalized adjusted EBITDA at the luxury home-furnishings retailer RH fell to **$123.5 million** from **$185.1 million** a year earlier, a decline of about a third. A **$55.1 million** refund of tariffs paid under the International Emergency Economic Powers Act, a U.S. emergency-powers statute used to levy import duties, helped produce adjusted earnings of $2.70 a share for the quarter ended August 1, against a Street estimate of $0.38. Shares traded at $142.70 after hours as of 8 p.m. Eastern, up 6.6% from the regular-session close of $133.89.

## The refund, not the furniture

RH said it filed in April for refunds on **$69 million** of IEEPA tariffs already paid. In the second quarter it received **$67 million** plus **$2.4 million** of related interest. Of that, **$55.1 million** was recognized as a reduction in cost of goods sold; another **$14 million** came off merchandise inventories.

Gross margin rose to **48.2%** from **45.5%** a year earlier, a lift RH said included about **600 basis points** from the refund. Adjusted EBITDA was **$178.5 million**, a **19.4%** margin, still down from last year's **$185.1 million** even with the refund inside the number. On the "normalized" presentation RH uses when it removes the item, the margin was **13.4%**.

Chairman and Chief Executive Gary Friedman wrote that RH recognized a tariff benefit of $55.1 million in the second quarter and expects another $13.9 million in the second half. The company plans to use the tariff benefit to offset **$50 million** of unplanned supply-chain cost increases, with the remaining **$19 million** benefiting earnings and included in the fiscal 2026 margin outlook. GAAP net income was **$60.2 million**, or **$3.06** a diluted share, up from **$51.7 million** and **$2.62**.

The **$2.70** still trailed last year's **$2.93**. Revenue of **$922.2 million** rose **2.6%** and came in above a Street estimate of **$915.1 million**. Free cash flow was **$99.6 million**, up from **$80.7 million**.

## A low bar, then a second-half stack

In June, after a first quarter whose revenue fell **1.7%**, RH had told shareholders to expect second-quarter revenue growth of **0.5%** to **2.5%** and an adjusted EBITDA margin of **11.5%** to **13.0%**. Reported growth of **2.6%** cleared that range. The **19.4%** headline margin did not describe the business; the **13.4%** normalized margin did, and it still cleared the range.

Table: Measure, Q2 result, RH's June Q2 outlook

The full-year guide narrowed rather than leaping. Revenue growth is now **5.5%** to **7.0%**, from **4.5%** to **8.0%** in June: a higher floor, a lower ceiling. Adjusted EBITDA margin is **15.0%** to **16.2%**, from **14.2%** to **16.0%**. The cash range stayed **$300 million** to **$400 million**, now described as free cash flow, asset sales, and distributions from equity-method investments. International pre-opening and startup costs are now expected to take about **340 basis points** off the full-year margin, compared with the **270 basis points** RH had included in its June outlook.

The second half is not a deceleration. It is a stack. RH Estates is a brand extension of traditional and atelier furniture, including designs from Michael Taylor, Formations, and Dennis & Leen. Friedman wrote that the concept, introduced with a 268-page Sourcebook that arrived in homes from late June through mid-July, has the potential to double the RH brand's addressable market. For the third quarter RH guided revenue growth of **5.0%** to **6.0%** and a **12.5%** to **13.5%** adjusted EBITDA margin, a step down from this quarter's normalized **13.4%**. It attributed **2.5** percentage points of that Q3 growth to reducing backlog, **2.0** to Estates, and **1.0** to new galleries and other factors. For the fourth quarter it guided growth of **16.1%** to **21.2%** and a **19.7%** to **22.9%** margin, with **6.5** points from backlog, **8.0** from Estates, and **4.0** from new galleries and other factors. In June the company had already said roughly **$75 million** of delayed orders should ship in the second half as tariff-related backorders normalize. That is delayed first-half demand, not a new housing cycle.

## August home sales sit under the fourth-quarter guide

Freddie Mac's weekly survey put the 30-year fixed mortgage rate at **6.76%** as of Thursday, up from **6.71%** a week earlier. The National Association of Realtors said August existing-home sales fell **2.0%** from July to a seasonally adjusted annual rate of **3.98 million**. Lawrence Yun, the group's chief economist, said it was "not surprising to see a mild dip in home buying activity due to high mortgage rates." That is the demand backdrop the fourth-quarter stack is betting on, with the growth coming from backlog, Estates, and new galleries rather than a stronger housing market.

Home-furnishings and homebuilder shares had already fallen in the regular session — Williams-Sonoma, Lennar, and the iShares U.S. Home Construction ETF ITB, graded D by etf.net.

Chart: RH led a **down day** across home furnishings and builders

RH itself closed at **$133.89** and is down **25.2%** year to date.

For almost anyone who owns housing or small-cap growth through a fund, Friday's question is still the mortgage rate and the sales pace. The largest RH weight in etf.net's graded universe is **2.13%** in the Level Four Large Cap Growth Active ETF LGRO, graded B. The Hoya Capital Housing ETF HOMZ, a 100-name U.S. housing basket graded C, holds **0.81%** and fell **1.7%** on Thursday. The **$2.70** is RH's.

The next scheduled report is December 10, when the third-quarter margin RH just guided to **12.5%** to **13.5%** can be checked against Estates, the backlog release, and a refund that will not be this size again.

Source: etf.net, https://etf.net/news/rh-s-core-profit-fell-a-third-even-as-a-55-1-million-refund-lifted-earnings-to-2-70-2026-09-10. Please cite the page URL.