RH (RH) Stock Forecast & Price Target

RH demonstrated strong financial performance with a revenue increase of 8.9% to $884 million in 3Q25, surpassing both internal estimates and consensus expectations. The company also achieved a gross margin expansion of 79 basis points, reflecting resilience despite upward pressures from tariffs and elevated membership fees. Furthermore, with promising demand growth in international markets, such as a 62% increase in RH's Paris store over recent weeks, RH is positioned for continued success in both domestic and international markets, supported by ongoing innovations and the expansion of its hospitality and digital platforms.

RH is experiencing a concerning downturn in its financial performance, as evidenced by a notable contraction in operating margin, which decreased by 341 basis points year-over-year to 11.6%, falling short of both its peers and internal guidance. The company's revised EBITDA estimate for FY25 has dropped to $686 million, reflecting a 6% decrease from previous guidance, driven mainly by weaker revenue performance and tariff-related headwinds. Furthermore, RH's lowered revenue and profit guidance for 2025, alongside a significant reduction in projected EPS for 2026, highlights the challenges facing the company and casts a negative outlook on its financial health.