Luxury furniture retailer RH (NYSE: RH) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 2.6% year on year to $922.2 million. On the other hand, next quarter’s revenue guidance of $932.4 million was less impressive, coming in 3.6% below analysts’ estimates. Its non-GAAP profit of $2.70 per share was significantly above analysts’ consensus estimates.

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Company Overview

Formerly known as Restoration Hardware, RH (NYSE: RH) is a specialty retailer that exclusively sells its own brand of high-end furniture and home decor.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $3.45 billion in revenue over the past 12 months, RH is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers.

As you can see below, RH’s sales grew at a sluggish 2.7% compounded annual growth rate over the last three years, but to its credit, it opened new stores and increased sales at existing, established locations.

This quarter, RH reported modest year-on-year revenue growth of 2.6% but beat Wall Street’s estimates by 0.7%. Company management is currently guiding for a 5.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.9% over the next 12 months, an acceleration versus the last three years. This projection is healthy and indicates its newer products will spur better top-line performance.

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Store Performance

Number of Stores

The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.

Over the last two years, RH opened new stores quickly, averaging 3% annual growth. This was faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Note that RH reports its store count intermittently, so some data points are missing in the chart below.

Same-Store Sales

The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

RH’s demand has been spectacular for a retailer over the last two years. On average, the company has increased its same-store sales by an impressive 3.5% per year. This performance suggests its rollout of new stores is beneficial for shareholders. We like this backdrop because it gives RH multiple ways to win: revenue growth can come from new stores, e-commerce, or increased foot traffic and higher sales per customer at existing locations.

Note that RH reports its same-store sales intermittently, so some data points are missing in the chart below.

Key Takeaways from RH’s Q2 Results

It was good to see RH beat analysts’ EPS expectations this quarter. We were also excited its gross margin outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5.3% to $143.44 immediately following the results.

Sure, RH had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).