RH lifted its full-year outlook and reported a higher second-quarter profit, and said its RH Estates brand extension has the potential to double the company's total addressable market.

Gary Friedman, chief executive of the furniture retailer, said that RH Estates, introduced over the summer via a 268-page Sourcebook, could double the company's TAM and will drive accelerated revenue growth through the rest of the year.

RH guided for third-quarter revenue growth between 5% and 6%, including two percentage points from RH Estates. In the fourth quarter, the brand extension will add 8 percentage points to RH's expected 16% to 21% revenue growth, the company said.

Analysts polled by FactSet were expecting revenue to hit $968.2 million in the third quarter and $948.9 million in the fourth, representing 9.5% and 13% year-over-year growth, respectively.

The new guidance means RH expects full-year revenue growth between 5.5% and 7%. Analysts are expecting full-year revenue of $3.63 billion, representing an increase of 5.6%.

Shares rose 7.1%, to $143.47, in after-hours trading Thursday.

Friedman also said that RH Estates would be margin accretive through higher prices and product margins.

Still, margins are expected to remain pressured through the rest of the year, driven by pre-opening and startup costs from RH's expansion into international markets. The company's full-year adjusted earnings before interest, taxes, depreciation, and amortization margin guidance includes a roughly 340 basis point headwind from those costs.

The headwind will decrease to 150 basis points in 2027, Friedman wrote.

The company also reported a $55.1 million tariff benefit in the second quarter, and expects an additional $13.9 million benefit in the back half of the year.

It plans to use $50 million of that total to offset supply-chain-cost increases from the war in Iran, and the remaining $19 million to benefit earnings.

The company reported a second-quarter profit of $60.2 million, or $3.06 a share, compared with a profit of $51.7 million, or $2.62 a share, a year earlier.

Stripping out certain one-time items, adjusted earnings were $2.70 a share. Analysts polled by FactSet were expecting 38 cents a share.

Revenue rose to $922.2 million, up from $899.2 million a year prior and ahead of analyst expectations for $915.1 million.