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In the last reported quarter, the company’s adjusted earnings per share of $1.53 missed the Zacks Consensus Estimate of $2.21 by 30.8%. The reported figure decreased slightly by 3.2% from $1.58 in the year-ago period. Net revenues of $842.6 million also lagged the consensus mark of $872 million but improved 3.7% year over year.
RH’s earnings surpassed estimates in only one of the trailing four quarters and missed on the other three occasions, but the average surprise was positive 46.5%.
How Are Estimates Placed for RH Stock?
The Zacks Consensus Estimate for the fiscal first quarter indicates a loss of $2.07 per share, which has remained unchanged over the past 30 days. In the year-ago period, the company reported earnings of 13 cents per share.
The consensus estimate for revenues is pegged at $791.6 million, indicating a 2.7% year-over-year decline.
Assessing the Sales Environment: RH’s fiscal first-quarter revenue performance is likely to have been pressured by continued weakness in the U.S. housing market, which management has described as one of the most difficult environments in decades for home-related spending. Elevated mortgage rates and macroeconomic uncertainty may have weighed on furniture demand, particularly for larger discretionary purchases. Management guided for first-quarter fiscal 2026 revenue growth of negative 2% to negative 4%, reflecting expectations for a soft demand environment.
Despite these headwinds, several company-specific initiatives may have provided support. RH entered fiscal 2026 with momentum from market-share gains and revenue growth that outpaced many industry peers. The company continued to benefit from its luxury positioning, expansive gallery network and integrated hospitality model, which help drive customer engagement and brand awareness. Management also remained optimistic about growth opportunities tied to new gallery concepts and international expansion efforts.
However, the quarter is likely to have seen limited contribution from RH Estates, the company’s new traditional luxury furnishings concept. Management indicated that major launch activities would occur during the second quarter, with meaningful revenue benefits expected later in the year.
Factors Affecting Profitability: Profitability is expected to have remained under pressure during the quarter. RH forecasted a fiscal first-quarter adjusted EBITDA margin of 5.5% to 6.5%, substantially below its longer-term targets. A major factor is the elevated level of pre-opening and startup expenses tied to international expansion initiatives, including RH Milan and RH London. Management estimated that these costs alone would reduce first-quarter adjusted EBITDA margin by roughly 420 basis points.
Tariff-related costs and supply-chain adjustments are likely to have been another challenge. During the fourth-quarter earnings discussion, management noted that tariff-related sourcing transitions had already created operational disruptions and margin pressure. Continued investments in global expansion, product development and the upcoming RH Estates launch were also expected to weigh on earnings in the near term.
Overall, RH’s fiscal first-quarter results are expected to reflect a balance between near-term macroeconomic pressures and substantial investments intended to strengthen the company’s long-term growth platform.
What the Zacks Model Says for RH
Our proven model does not conclusively predict an earnings beat for RH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Williams-Sonoma’s (WSM - Free Report) first-quarter fiscal 2026 earnings topped the Zacks Consensus Estimate by 7.2%, while net revenues met the same at $1.81 billion. Year over year, both metrics grew 4.3% and 4.4%, respectively, owing to the broad-based comparable growth across brands and channels and steady earnings delivery.
For fiscal 2026, WSM expects annual net revenues to increase in the range of 2.7-6.7%, with comparable brand revenue growth (comps) in the range of 2-6%. WSM also continues to project an operating margin between 17.5% and 18.1% for the year.
Lowe’s (LOW - Free Report) reported first-quarter fiscal 2026 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate. Adjusted earnings were $3.03 per share, rising 3.8% year over year and beating the Zacks Consensus Estimate of $2.96 by 2.4%. Net sales came in at $23.1 billion, rallying 10.3% from the year-ago quarter and surpassing the consensus mark of $22.9 billion by 0.6%.
Lowe’s reaffirmed its fiscal 2026 guidance and expects total sales between $92 billion and $94 billion, indicating year-over-year growth of 7-9%. Comparable sales are anticipated to be flat to up 2%. The company expects the adjusted operating margin to be 11.6-11.8%. Lowe’s expects EPS of $11.75-$12.25 and adjusted EPS of $12.25-$12.75.
The Home Depot Inc.’s (HD - Free Report) first-quarter fiscal 2026 top and bottom lines outpaced the Zacks Consensus Estimate. Adjusted earnings were $3.43 per share, down 3.7% from the year-ago quarter but beat the consensus mark of $3.40. Net sales rose 4.8% year over year to $41.77 billion and topped the consensus estimate of $41.49 billion.
Home Depot reaffirmed its fiscal 2026 framework, calling for total sales growth of approximately 2.5-4.5% and comparable sales growth of roughly flat to 2%. The company also expects to open about 15 stores this year. HD anticipates EPS growth of approximately flat to 4% from $14.23 in fiscal 2025.
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RH Set to Report Q1 Earnings: What Should Investors Expect?
Key Takeaways
RH (RH - Free Report) is scheduled to report its first-quarter fiscal 2026 (ended May 2, 2026) results on June 11, after the closing bell.
In the last reported quarter, the company’s adjusted earnings per share of $1.53 missed the Zacks Consensus Estimate of $2.21 by 30.8%. The reported figure decreased slightly by 3.2% from $1.58 in the year-ago period. Net revenues of $842.6 million also lagged the consensus mark of $872 million but improved 3.7% year over year.
RH’s earnings surpassed estimates in only one of the trailing four quarters and missed on the other three occasions, but the average surprise was positive 46.5%.
How Are Estimates Placed for RH Stock?
The Zacks Consensus Estimate for the fiscal first quarter indicates a loss of $2.07 per share, which has remained unchanged over the past 30 days. In the year-ago period, the company reported earnings of 13 cents per share.
The consensus estimate for revenues is pegged at $791.6 million, indicating a 2.7% year-over-year decline.
RH Price and EPS Surprise
RH price-eps-surprise | RH Quote
Factors Likely to Have Shaped RH’s Q1 Performance
Assessing the Sales Environment: RH’s fiscal first-quarter revenue performance is likely to have been pressured by continued weakness in the U.S. housing market, which management has described as one of the most difficult environments in decades for home-related spending. Elevated mortgage rates and macroeconomic uncertainty may have weighed on furniture demand, particularly for larger discretionary purchases. Management guided for first-quarter fiscal 2026 revenue growth of negative 2% to negative 4%, reflecting expectations for a soft demand environment.
Despite these headwinds, several company-specific initiatives may have provided support. RH entered fiscal 2026 with momentum from market-share gains and revenue growth that outpaced many industry peers. The company continued to benefit from its luxury positioning, expansive gallery network and integrated hospitality model, which help drive customer engagement and brand awareness. Management also remained optimistic about growth opportunities tied to new gallery concepts and international expansion efforts.
However, the quarter is likely to have seen limited contribution from RH Estates, the company’s new traditional luxury furnishings concept. Management indicated that major launch activities would occur during the second quarter, with meaningful revenue benefits expected later in the year.
Factors Affecting Profitability: Profitability is expected to have remained under pressure during the quarter. RH forecasted a fiscal first-quarter adjusted EBITDA margin of 5.5% to 6.5%, substantially below its longer-term targets. A major factor is the elevated level of pre-opening and startup expenses tied to international expansion initiatives, including RH Milan and RH London. Management estimated that these costs alone would reduce first-quarter adjusted EBITDA margin by roughly 420 basis points.
Tariff-related costs and supply-chain adjustments are likely to have been another challenge. During the fourth-quarter earnings discussion, management noted that tariff-related sourcing transitions had already created operational disruptions and margin pressure. Continued investments in global expansion, product development and the upcoming RH Estates launch were also expected to weigh on earnings in the near term.
Overall, RH’s fiscal first-quarter results are expected to reflect a balance between near-term macroeconomic pressures and substantial investments intended to strengthen the company’s long-term growth platform.
What the Zacks Model Says for RH
Our proven model does not conclusively predict an earnings beat for RH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Williams-Sonoma’s (WSM - Free Report) first-quarter fiscal 2026 earnings topped the Zacks Consensus Estimate by 7.2%, while net revenues met the same at $1.81 billion. Year over year, both metrics grew 4.3% and 4.4%, respectively, owing to the broad-based comparable growth across brands and channels and steady earnings delivery.
For fiscal 2026, WSM expects annual net revenues to increase in the range of 2.7-6.7%, with comparable brand revenue growth (comps) in the range of 2-6%. WSM also continues to project an operating margin between 17.5% and 18.1% for the year.
Lowe’s (LOW - Free Report) reported first-quarter fiscal 2026 results, wherein both earnings and sales surpassed the Zacks Consensus Estimate. Adjusted earnings were $3.03 per share, rising 3.8% year over year and beating the Zacks Consensus Estimate of $2.96 by 2.4%. Net sales came in at $23.1 billion, rallying 10.3% from the year-ago quarter and surpassing the consensus mark of $22.9 billion by 0.6%.
Lowe’s reaffirmed its fiscal 2026 guidance and expects total sales between $92 billion and $94 billion, indicating year-over-year growth of 7-9%. Comparable sales are anticipated to be flat to up 2%. The company expects the adjusted operating margin to be 11.6-11.8%. Lowe’s expects EPS of $11.75-$12.25 and adjusted EPS of $12.25-$12.75.
The Home Depot Inc.’s (HD - Free Report) first-quarter fiscal 2026 top and bottom lines outpaced the Zacks Consensus Estimate. Adjusted earnings were $3.43 per share, down 3.7% from the year-ago quarter but beat the consensus mark of $3.40. Net sales rose 4.8% year over year to $41.77 billion and topped the consensus estimate of $41.49 billion.
Home Depot reaffirmed its fiscal 2026 framework, calling for total sales growth of approximately 2.5-4.5% and comparable sales growth of roughly flat to 2%. The company also expects to open about 15 stores this year. HD anticipates EPS growth of approximately flat to 4% from $14.23 in fiscal 2025.