RH continued to lead the home furnishings sector in the third quarter with strong uplift in both sales and profit, despite the ongoing impact from changing tariffs.

The company saw net revenues rise 9 per cent to $884 million in the quarter ended November 1. On a two-year basis, sales have soared 18 per cent.

CEO Gary Friedman said the company maintained its “industry leading growth” during the quarter, citing that rivals such as Arhaus, Wayfair and West Elm recorded lower growth rates of 4-8 per cent.

He noted that the results were delivered despite the worst housing market in almost 50 years, and the polarizing impact of tariffs. 

“There have been 16 different tariff announcements over the past 10 months that have resulted in significant resourcing, product delays, out of stocks, and driven multiple rounds of price negotiations and increases,” Friedman said.

“Despite the chaos, we continue to demonstrate our ability to gain meaningful market share while aggressively investing in strategies that we believe will create long term strategic separation,” he added. 

The company’s adjusted operating margin was 11.6 per cent during the quarter, which was below the 12.5 per cent mid-point of guidance. It attributed this to higher than forecasted tariff expense on prior-period special order and back order sales, and higher than expected opening expenses in Paris.

Net income rose 9 per cent to $36 million, and adjusted EBITDA margin was 17.6 per cent. Net debt at the end of the quarter was $2.427 billion, down $85 million from the second quarter.

Looking ahead, RH expects net revenues to grow 7-8 per cent for the fourth quarter and 9-9.2 per cent for the full year.