Hard to see guidance being achieved; maintain Underweight: Earnings Review

研报英文原文证据摘录

Hard to see guidance being achieved; maintain Underweight: Earnings Review

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RH

Hard to see guidance being achieved;

maintain Underweight

Earnings Review

We see downside at tight trading levels 24 June 2026

We maintain our Underweight on the RH TL-B as we believe trading levels (yield of 7.6% High Yield Credit

vs 8.5% for the Single-B Loan Index) do not reflect (1) the soft housing market and its United States

impact on furniture sales; (2) tariff uncertainty; (3) lack of transparency of operating Retailing

costs; (4) weak demand; and (5) relatively high secured net leverage of 4.3x (ex-financing

leases). William M. Reuter Research Analyst

BofAS

1Q26 results were weak +1william.m.reuter@bofa.com646 855 6363

1Q26 Adj EBITDA decreased almost 50% to $57 million due to (1) delayed shipments Michael DeRienzo

due to tariffs; (2) higher operating costs; and (3) increased occupancy costs of new Research Analyst

Galleries. Results were above our 1Q26 Adj EBITDA estimate of $46 million. 1Q26 BofASmichael.derienzo@bofa.com

revenue decreased 2% to $800 million with 5% of the impact being the result of

sourcing disruption. Adj gross margins decreased 230 bps to 41.4%. Based upon debt of

RH (RH)

$3.19 billion and cash of $54 million, net leverage was 5.7x at the end of the quarter. Key Data 1Q2025A 1Q2026A LTM

FY26 guidance looks unachievable OperatingRevenues (US$ mm) 814 800 3,426

RH slightly increased the low end of FY26 revenue growth and Adj EBITDA margins. Adj EBITDA 106 57 547

Guidance includes: (1) revenue growth of 4.5% to 8% (from +4% to +8%); (2) an Adj Cash from Ops 87 53 418

EBITDA margin of 14.2% to 16% (from 14% to 16%); and (3) free cash flow of $300 to Capex (53) (39) (186)

$400 million (unchanged).