Upscale home furnishings company RH achieved double-digit sales growth in the first quarter amid a challenging environment brought about by tariffs and weak demand.

The company’s net revenues for the quarter ended May 3 rose 12 per cent year-on-year to $814 million.

Adjusted operating margin and EBITDA margin were 7 per cent and 13.1 per cent, respectively, which were at the high end of management’s expectations.

Operating income increased 2.3 per cent to $55.9 million and last year’s net loss of $3.6 million was replaced by an income of $8 million.

Chairman and CEO Gary Friedman said the company delivered the positive results despite the “polarizing impact of tariff uncertainty and the worst housing market in almost 50 years”. 

In response to recent tariff changes, RH has continued to shift sourcing out of China and expects receipts to decrease from 16 per cent in Q1 to 2 per cent in Q4, with a meaningful portion of the tariff absorbed by vendor partners. 

The company has also resourced a significant portion of upholstered furniture to its North Carolina factory.

For the full year, RH expects revenue growth of 10-13 per cent, EBITDA margin of 20-21 per cent, and free cash flow of $250 million to $350 million.