Focused strategy leads RH to sales growth in fourth quarter and full year

RH, a leading retailer, demonstrated positive growth in net sales for both the fourth quarter and the full fiscal year of 2024 in its most recent financial report. In the fourth quarter that ended on Feb. 1, the California-based company showed a 10.04% increase in net revenues, totaling $812.41 million compared to $738.26 million from the same period the year before. Net income for this quarter reached $18.632 million, a 22.28% rise from the previous year.

For the full fiscal year of 2024, RH reported $3.181 billion in sales, which was a 5.01% increase from FY2023. However, despite this growth, the net income for the year was $72.412 million, a 43.34% decrease from the previous year. RH’s Chairman and CEO, Gary Friedman, provided insight into these numbers by comparing the housing market between 1978 and 2024. He highlighted that even with a larger population in 2024, RH’s performance is impressive, crediting their strategy of focusing intensely on specific areas or what they refer to as ‘An inch wide and a mile deep.’

Friedman emphasized that the company’s success stems from investing in a narrow focus and long-term vision. He mentioned the importance of creating highly desirable products displayed in inspirational spaces worldwide, along with offering bespoke interior design services and unique restaurants that not only boost the RH brand but also function as profitable customer acquisition channels.

RH is not anticipating any negative impacts from prior announcements regarding tariffs in China, Mexico, and Canada. They are working closely with manufacturing partners to mitigate any potential effects from reciprocal and other tariffs. Additionally, Friedman highlighted that RH has been manufacturing upholstered furniture in their North Carolina factory for over a decade and has recently increased its capacity by 48%. They plan for 48% of their upholstered furniture to be produced in the US, 21% in Italy, and overall, 14% of the business will be produced in the US by the end of the year.

Looking ahead, RH has issued guidance for fiscal 2025, expecting revenue growth of 10% to 13% and adjusted EBITDA margin of 20% to 21%. They are also projecting first-quarter revenue growth of 12.5% to 13.5% and an adjusted EBITDA margin of 12.5% to 13.0%. The company’s expansion plans for 2025 include the opening of seven new Design Galleries.

Overall, RH’s focused approach and commitment to quality and innovation have led to significant sales gains in the past year, positioning the company for further success in the future.