Rh 10-Q for FY2027 Q2

About this 10-Q

Headline figures

Rh (RH)

10-Q 2026-09-10 For: 2026-08-01

Added on September 10, 2026

Rh filed this 10-Q on September 10, 2026, covering the quarter ended August 1, 2026 (FY2027 Q2).

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Quarter ended August 1, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $922.15M; up 2.6% from $899.15M a year earlier
Net income: $60.17M; up 16.4% from net income of $51.71M a year earlier
Diluted EPS: $3.06; up 16.8% from $2.62 a year earlier


Common Stock, $0.0001 par value		RH	New York Stock Exchange, Inc.
(Title of each class)		(Trading symbol)	(Name of each exchange on which registered)

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Delaware		45-3052669
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

15 Koch Road Corte Madera, CA		94925
(Address of principal executive offices)		(Zip Code)


		Page

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited) as of August 1, 2026 and January 31, 2026	3
	Condensed Consolidated Statements of Income (Unaudited) for the three and six months ended August 1, 2026 and August 2, 2025	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended August 1, 2026 and August 2, 2025	5
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) for the three and six months ended August 1, 2026 and August 2, 2025	6
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended August 1, 2026 and August 2, 2025	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 4.	Controls and Procedures	49

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
Signatures		53


		AUGUST 1,			JANUARY 31,
		2026			2026

		(in thousands)
ASSETS
Cash and cash equivalents		$	125,492		$	41,191
Accounts receivable—net			79,130			63,447
Merchandise inventories			772,716			818,550
Prepaid expense and other current assets			181,824			184,474
Total current assets			1,159,162			1,107,662
Property and equipment—net			2,594,220			2,158,718
Operating lease right-of-use assets			864,669			795,352
Goodwill and intangible assets—net			224,366			224,016
Deferred tax assets			128,326			128,375
Equity method investments			69,143			119,754
Other non-current assets			91,214			301,833
Total assets		$	5,131,100		$	4,835,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses		$	423,454		$	386,736
Deferred revenue and customer deposits			402,033			338,504
Operating lease liabilities			113,332			110,280
Other current liabilities			94,255			95,086
Total current liabilities			1,033,074			930,606
Asset based credit facility			—			20,000
Term loan B—net			1,877,971			1,886,370
Term loan B-2—net			466,922			467,299
Real estate loan—net			15,027			15,199
Non-current operating lease liabilities			749,376			705,084
Non-current finance lease liabilities			837,192			718,837
Deferred tax liabilities			17,352			17,731
Other non-current liabilities			13,839			13,984
Total liabilities			5,010,753			4,775,110
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock—$0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of August 1, 2026 and January 31, 2026			—			—
Common stock—$0.0001 par value per share, 180,000,000 shares authorized, 18,931,251 shares issued and outstanding as of August 1, 2026; 18,818,976 shares issued and outstanding as of January 31, 2026			2			2
Additional paid-in capital			438,865			410,461
Accumulated other comprehensive income			21,075			36,202
Accumulated deficit			(339,595)			(386,065)
Total stockholders’ equity			120,347			60,600
Total liabilities and stockholders’ equity		$	5,131,100		$	4,835,710


	THREE MONTHS ENDED						SIX MONTHS ENDED
	AUGUST 1,			AUGUST 2,			AUGUST 1,			AUGUST 2,
	2026			2025			2026			2025

	(in thousands, except share and per share amounts)
Net revenues	$	922,150		$	899,151		$	1,722,478		$	1,713,103
Cost of goods sold		477,297			489,892			946,366			948,511
Gross profit		444,853			409,259			776,112			764,592
Selling, general and administrative expenses		337,280			280,383			634,296			579,805
Operating income		107,573			128,876			141,816			184,787
Other expenses
Interest expense—net		50,993			57,358			103,656			113,961
Other income—net		(1,856)			(574)			(1,119)			(4,227)
Total other expenses		49,137			56,784			102,537			109,734
Income before taxes and equity method investments		58,436			72,092			39,279			75,053
Income tax expense		16,249			19,032			10,347			22,159
Income before equity method investments		42,187			53,060			28,932			52,894
Share of equity method investments net (income) loss		(17,980)			1,352			(17,538)			(6,853)
Net income	$	60,167		$	51,708		$	46,470		$	59,747
Weighted-average shares used in computing basic net income per share		18,913,130			18,737,234			18,879,222			18,733,119
Basic net income per share	$	3.18		$	2.76		$	2.46		$	3.19
Weighted-average shares used in computing diluted net income per share		19,669,307			19,737,331			19,654,650			19,825,282
Diluted net income per share	$	3.06		$	2.62		$	2.36		$	3.01


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	THREE MONTHS ENDED
	COMMON STOCK
						ACCUMULATED
				ADDITIONAL		OTHER				TOTAL
				PAID-IN		COMPREHENSIVE		ACCUMULATED		STOCKHOLDERS’
	SHARES	AMOUNT		CAPITAL		INCOME (LOSS)		DEFICIT		EQUITY (DEFICIT)

	(in thousands, except share amounts)
Balances—May 2, 2026	18,900,769	$	2	$	425,102	$	31,585	$	(399,762)	$	56,927
Stock-based compensation	—		—		12,493		—		—		12,493
Issuance of restricted stock	5,901		—		—		—		—		—
Exercise of stock options	24,581		—		1,270		—		—		1,270
Net income	—		—		—		—		60,167		60,167
Net loss from foreign currency translation	—		—		—		(10,510)		—		(10,510)
Balances—August 1, 2026	18,931,251	$	2	$	438,865	$	21,075	$	(339,595)	$	120,347

Balances—May 3, 2025	18,732,265	$	2	$	375,521	$	16,522	$	(502,813)	$	(110,768)
Stock-based compensation	—		—		11,633		—		—		11,633
Issuance of restricted stock	4,690		—		—		—		—		—
Exercise of stock options	7,165		—		428		—		—		428
Net income	—		—		—		—		51,708		51,708
Net gain from foreign currency translation	—		—		—		6,099		—		6,099
Balances—August 2, 2025	18,744,120	$	2	$	387,582	$	22,621	$	(451,105)	$	(40,900)


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	PURCHASE
	PRICE
	ALLOCATION
	(in thousands)
Merchandise inventories	$	5,451
Property and equipment		27,461
Operating lease right-of-use assets		4,443
Goodwill⁽¹⁾		3,220
Other assets		923
Deferred revenue and customer deposits		(3,471)
Operating lease liabilities		(4,273)
Other liabilities		(1,635)
Total	$	32,119


	SIX MONTHS ENDED
	AUGUST 1,			AUGUST 2,
	2026			2025

	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	46,470		$	59,747
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		79,678			69,865
Non-cash operating lease cost		55,627			51,106
Stock-based compensation		24,412			24,007
Asset impairments		523			3,948
Non-cash finance lease interest expense		24,152			18,193
Product recall		—			1,913
Share of equity method investments net income		(17,538)			(6,853)
Loss on variable interest entities restructuring		10,699			—
Distribution of return on equity method investments		8,050			4,630
Other non-cash items		4,694			2,098
Change in assets and liabilities:
Accounts receivable		(15,727)			2,407
Merchandise inventories		43,787			73,595
Prepaid expense and other assets		(10,973)			(13,118)
Landlord assets under construction—net of tenant allowances		(78,365)			(46,486)
Accounts payable and accrued expenses		39,376			(22,239)
Deferred revenue and customer deposits		64,052			54,800
Other current liabilities		(3,354)			13,451
Current and non-current operating lease liabilities		(54,577)			(50,447)
Other non-current liabilities		(23,268)			(16,298)
Net cash provided by operating activities		197,718			224,319
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(84,859)			(109,565)
Acquisition of business		—			(32,119)
Equity method investments		—			(374)
Acquisition of intangible asset		—			(3,031)
Receipt of promissory note repayment from equity method investee		—			1,750
Distribution of return of equity method investments		41,950			7,916
Proceeds from insurance recoveries		—			1,275
Net cash used in investing activities		(42,909)			(134,148)


	SIX MONTHS ENDED
	AUGUST 1,			AUGUST 2,
	2026			2025
	(in thousands)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under asset based credit facility		165,000			260,000
Repayments under asset based credit facility		(185,000)			(325,000)
Repayments under term loans		(12,500)			(12,500)
Repayments under real estate loans		(31,540)			(169)
Debt issuance costs		—			(2,766)
Principal payments under finance lease agreements—net of tenant allowances		(10,099)			(8,031)
Proceeds from exercise of stock options		4,010			1,258
Tax withholdings related to issuance of stock-based awards		(18)			(31)
Net cash used in financing activities		(70,147)			(87,239)
Effects of foreign currency exchange rate translation on cash		(361)			1,215
Net increase in cash and cash equivalents		84,301			4,147
Cash and cash equivalents
Beginning of period		41,191			30,413
End of period	$	125,492		$	34,560
Non-cash transactions
Property and equipment additions in accounts payable and accrued expenses at period-end	$	23,187		$	32,089
Landlord asset additions in accounts payable and accrued expenses at period-end		15,218			11,439
Property and equipment additions acquired in VIE restructuring (Note 6)		60,500			—
Real estate loan acquired in VIE restructuring (Note 6)		(31,372)			—


		AUGUST 1,			JANUARY 31,
		2026			2026

		(in thousands)
Current portion of value added tax (VAT) receivable		$	50,637		$	39,169
Prepaid expenses			24,125			30,355
Capitalized catalog costs			22,550			23,274
Vendor deposits			18,417			26,230
Current portion of capitalized cloud computing costs			13,995			11,344
Tenant allowance receivable			9,323			5,633
Right of return asset for merchandise			6,145			6,423
Federal and state tax receivable			3,459			11,528
Promissory note receivable, including interest⁽¹⁾			1,183			1,164
Other current assets			31,990			29,354
Total prepaid expense and other current assets		$	181,824		$	184,474


		AUGUST 1,			JANUARY 31,
		2026			2026

		(in thousands)
Capitalized cloud computing costs—net⁽¹⁾		$	32,416		$	31,224
Landlord assets under construction—net of tenant allowances			12,903			156,252
Value added tax (VAT) receivable			10,651			—
Other deposits			8,587			12,234
Initial direct costs prior to lease commencement			4,624			81,066
Vendor deposits—non-current			3,773			3,336
Deferred financing fees			2,702			3,377
Other non-current assets			15,558			14,344
Total other non-current assets		$	91,214		$	301,833


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		RH SEGMENT					WATERWORKS
				TRADENAMES,					TRADENAMES,
				TRADEMARKS AND					TRADEMARKS AND
				OTHER INTANGIBLE					OTHER INTANGIBLE
		GOODWILL		ASSETS			GOODWILL⁽¹⁾		ASSETS⁽²⁾

		(in thousands)
January 31, 2026		$	144,239	$	62,777		$	—	$	17,000
Additions			—		515			—		—
Other⁽³⁾			—		(131)			—		—
Foreign currency translation			(34)		—			—		—
August 1, 2026		$	144,205	$	63,161		$	—	$	17,000


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			AUGUST 1,		JANUARY 31,
	BALANCE SHEET CLASSIFICATION		2026		2026

			(in thousands)
ASSETS
Operating leases⁽¹⁾	Operating lease right-of-use assets		$	864,669	$	795,352
Finance leases^(2)(3)(4)	Property and equipment—net			1,527,833		1,181,339
Total lease right-of-use assets			$	2,392,502	$	1,976,691
LIABILITIES
Current⁽⁵⁾
Operating leases	Operating lease liabilities		$	113,332	$	110,280
Finance leases	Other current liabilities			23,726		21,249
Total lease liabilities—current				137,058		131,529
Non-current
Operating leases	Non-current operating lease liabilities			749,376		705,084
Finance leases	Non-current finance lease liabilities			837,192		718,837
Total lease liabilities—non-current				1,586,568		1,423,921
Total lease liabilities			$	1,723,626	$	1,555,450


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	OPERATING		FINANCE
FISCAL YEAR	LEASES		LEASES		TOTAL

	(in thousands)
Remainder of fiscal 2026	$	82,094	$	36,878	$	118,972
2027		156,304		74,378		230,682
2028		125,538		73,479		199,017
2029		113,663		73,140		186,803
2030		104,701		74,178		178,879
2031		85,200		71,220		156,420
Thereafter		676,785		1,393,062		2,069,847
Total lease payments⁽¹⁾⁽²⁾		1,344,285		1,796,335		3,140,620
Less—imputed interest⁽³⁾		(481,577)		(935,417)		(1,416,994)
Present value of lease liabilities	$	862,708	$	860,918	$	1,723,626


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		WEIGHTED-		WEIGHTED-		AGGREGATE
		AVERAGE		AVERAGE		INTRINSIC
		EXERCISE		REMAINING TERM		VALUE
	SHARES	PRICE		(in years)		(in thousands)
Options outstanding	4,333,533	$	200.79		5.1	$	155,546
Options vested or expected to vest	3,920,408		201.90		4.8		148,146
Options exercisable	2,563,136		196.24		3.0		131,713


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	UNRECOGNIZED		WEIGHTED-
	STOCK BASED		AVERAGE
	COMPENSATION		REMAINING TERM
	(in thousands)		(in years)
Unvested options	$	153,779	5.2
Unvested restricted stock and restricted stock units		6,036	1.5
Total	$	159,815


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