By Kit Norton

Shares of RH advanced late Thursday after the home goods retailer, formerly known as Restoration Hardware, surpassed Wall Street expectations with its fiscal 2026 first-quarter results and narrowed its full-year revenue guidance on the basis that tariff impacts will normalize by the end of the year.

RH stock rose 2% in after-hours trading after ending regular trading on Thursday up 7.3% to $159.51. The stock is down 13% this year but has rallied 41% since it bottomed after reporting fiscal 2025 fourth quarter earnings in late March.

The furniture retailer posted an adjusted loss of $1.97 a share for the quarter ended May 2, compared with a profit of 13 cents a share a year ago and narrower than Wall Street's expectation for a $2.12 a share loss. Revenue declined 1.7% to $800.33 million, beating the analyst consensus call for $792.6 million, according to FactSet.

The loss was the company's first since the beginning of fiscal 2024.

RH said that revenue was negatively impacted by about $45 million because of backorder and special order balances that were approximately $75 million higher than the same period a year ago, primarily as a result of tariff related resourcing.

RH expects a similar elevated balance in the second quarter before balances normalize by the end of the year, resulting in a revenue pick up of approximately $75 million in the second half of the year.

Looking ahead, RH expects second-quarter revenue growth of 0.5% to 2.5%, which is below analysts' $940 million prediction. For the full-fiscal year, the company forecasts revenue growth of 4.5% to 8%, shifting its guidance from the previous 4% to 8% growth outlook.

It hasn't been smooth sailing in the furniture space this calendar year as the industry has dealt with tariffs, the conflict in the Middle East, and housing market woes. A combination of high home prices and higher mortgage rates have weighed on home sales since the middle of 2022.

Homeowners with low financing costs -- or no mortgage at all -- have little reason to trade up, while first-time buyers face higher financing costs for fewer options.

At the end of March, RH, which is investing in a global expansion and launching a new luxury product line, RH Estates, outlined its plans to ramp up revenue growth and pay off debt by 2029. RH believes there is a potential tailwind of strong spending from wealthy consumers and a generational transfer of $30 trillion to $38 trillion in the next decade.

Company executives said in late March that revenue growth will accelerate by 10% to 12% in 2027 and reach $5.4 billion to $5.8 billion by 2030, with adjusted earnings before interest, taxes, depreciation, and amortization reaching 25% to 28% by 2030.

RH also forecasts cumulative cash flow of $3 billion by 2030 and to be debt-free by 2029.

Write to Kit Norton at kit.norton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

June 11, 2026 16:44 ET (20:44 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.