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• During its Q2 call, RH CEO Gary Friedman said RH Estates could double the brand’s addressable market. 
• RH will broaden Estates’ lineup and distribution in November, aiming for the collection to comprise half of its assortment within five years. 
• RH reported $922.2 million in quarterly revenue, up 2.6% from last year and above analysts’ $916.25 million estimate. 

RH (RH) stock gained overnight after the luxury home furnishings company reported strong fiscal second-quarter (Q2) 2027 earnings, while CEO Gary Friedman said the newly launched RH Estates collection could potentially double the brand’s total addressable market. 

RH stock rallied over 6% overnight, heading into Friday. 

RH Estates Could Double The Brand’s Addressable Market 

During the Q2 earnings call, Friedman said the company expects the RH Estates brand to broaden its luxury home furnishings opportunity and improve margins as the retailer prepares for a larger rollout later this year.

“We believe the introduction of RH Estates, our latest brand extension, introduced with a 268-page sourcebook that arrived in homes late June through mid-July, has the potential to double the total addressable market of the RH brand.”

Friedman attributed the initiative to years of acquisitions, relationships with antique specialists and collaborations with designers, artisans and manufacturers. RH has added businesses including Michael Taylor Designs, Formations, Dennis & Leen, Joseph Jeup and Dmitriy over the past six years, while also maintaining relationships with prominent collectors and design figures.

RH Estates Plans Bigger Rollout Ahead

RH initially limited Estates distribution as it tested the concept. Friedman said that strategy is set to change in November, when the company plans to increase both its product selection and circulation. Estates merchandise will also receive prominent placement on the main floors of RH galleries representing roughly 80% of the company’s business.

“In-stocks will be at an adequate level to meet and fill demand. Hence the fourth quarter acceleration in our outlook. You can expect this to continue to rapidly expand the assortment over the next 5 years, and we predict it will represent 50% of our offering at that time.”

RH Reports 2.6% Revenue Growth 

RH generated $922.2 million in revenue in Q2, a 2.6% increase from last year and beating analysts’ consensus estimate of $916.25 million, according to per Fiscal Ai data. The company’s net income was $60.2 million, while adjusted EBITDA reached $178.5 million, equal to a 19.4% margin. Adjusted EPS of $3.06, however, missed Street expectations of $3.22. 

The company now expects fiscal 2026 revenue to increase between 5.5% and 7%, while adjusted EBITDA margin is projected at 15% to 16.2%.

RH Stock: Retail View 

On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory.

A user said, “This is straight $175+ tomorrow, bunch of losers that can’t read ERs, sales are obviously reaccelerating, gonna be some head scratchers tomorrow.” 

RH stock has cratered 25% year to date. 

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