What factors contributed to RH's positive earnings surprises in 2025?

RH's positive earnings surprises in 2025 can be attributed to several key factors: 1. **Revenue Growth**: RH reported a significant increase in net revenues, which grew to $3.18 billion in 2025, up from $3.03 billion in 2024. This growth was primarily driven by higher revenue in the core business and increased Sourcebook circulation. 2. **Gross Profit Margin**: Despite facing challenges, RH maintained a gross profit margin of 44.5%, indicating efficient cost management and a strong market positioning. 3. **Strategic Initiatives**: RH's focus on product elevation and Gallery transformation contributed to its revenue growth. The company plans to open new design galleries and concept galleries, which is expected to further boost its physical presence and revenue. 4. **Brand Power and Luxury Positioning**: RH's powerful brand and luxury market positioning continue to resonate with affluent consumers, resulting in strong revenues and margins. 5. **Digital Integration**: RH's integrated retail experience, combining physical showrooms with digital platforms, provides a seamless customer journey and drives incremental sales. In summary, RH's positive earnings surprises in 2025 can be attributed to robust revenue growth, efficient cost management, strategic initiatives, strong brand positioning, and effective digital integration.