The Short Answer
RH stock (RH) is doubtful on the current record. Furniture and décor are generally permissible, but the latest filing reports finance debt and leases at 64.25% of total assets, above the examined limits. Hospitality activity and interest-income disclosure also remain qualitative.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-05-02; calculated 2026-07-14.
3,178.917 / 4,947.677
53.803 / 4,947.677
126.238 / 4,947.677
- Financial
- Fails
- Overall
- Fails
Debt/assets is 64.25%, above the examined FTSE 33.333% limit; liquidity/assets is 1.09% and receivables plus cash/assets is 2.55%, while interest income remains unavailable.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 64.25%, above the examined MSCI total-assets limit; liquidity/assets is 1.09% and receivables plus cash/assets is 2.55%. This is not an index-membership claim.
- Financial
- Fails
- Overall
- Fails
Debt/assets is 64.25%, above the examined Malaysia SAC 33% financial limit; identifiable liquidity/assets is 1.09%. This is a calculation against SAC ratios, not an official classification.
- Financial
- Not calculated
- Overall
- Not calculated
A properly licensed reproducible 24- or 36-month market-cap history is not stored; a spot estimate is not substituted.
Business-activity disclosure
RH designs and sells luxury furniture, lighting and home décor, with hospitality and restaurant activities in selected galleries. Household goods are generally permissible, while hospitality operations and financing require qualitative review.
Limitation: The filing does not allocate hospitality or product revenue under a universal Sharia taxonomy and does not separately disclose interest income.
Purification
Interest income is not separately disclosed in the current filing. ZakatInvest does not prescribe a fixed scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from RH's May 2, 2026 Form 10-Q.
- Interest-bearing debt includes the asset-based facility, term loans, real-estate loan and current and non-current finance lease liabilities (3,178.917); operating lease liabilities are excluded.
- Cash is 53.803 and accounts receivable is 72.435; no separate interest-bearing securities are reported.
- Quarterly net revenue is 800.328.
- Interest income is not separately disclosed; the filing reports net interest expense of 52.663 and does not quantify a universal prohibited-revenue numerator.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
RH's May 2, 2026 filing supplies the current ratios above. The quantitative result is not an index-membership claim, and ZakatInvest does not prescribe a fixed purification percentage.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
RH's Business Activity
RH (formerly Restoration Hardware) designs and sells luxury home furnishings through its gallery stores, catalogs, and digital channels. Products include:
- High-end furniture (sofas, dining tables, bedroom sets)
- Lighting and décor
- Outdoor furniture and garden accessories
- Baby and child furniture (RH Baby & Child)
- Teen furnishings (RH Teen)
- RH Hospitality (restaurants in select galleries)
Selling permissible household goods and furniture is entirely halal in Islam. Providing comfortable, beautiful homes is consistent with Islamic values of tayyib (good, wholesome living). RH's hospitality segment (restaurants) serves food and beverages — those restaurants do not serve alcohol, which is a positive factor.
Financial Ratios (May 2, 2026)
Using the latest Form 10-Q and the total-assets inputs shown above:
- Interest-bearing debt / total assets: 64.25% ❌
- Identifiable liquidity / assets: 1.09% ✅
- Receivables + cash / assets: 2.55% ✅
- Interest income: Not separately disclosed
The latest asset-based debt screen fails. Market-cap denominator methods are not calculated, and hospitality/product revenue is not assigned an unsupported prohibited-revenue percentage.
Concerns to Be Aware Of
1. Higher Debt Levels
RH reports an asset-based debt ratio of 64.25% when the asset-based credit facility, term loans, real-estate loan and finance lease liabilities are included. That is above the examined 33% limits; market-cap methods are not substituted for this calculation.
2. Interest on Corporate Debt
The debt RH carries incurs interest expense. This is a concern for some scholars who prefer companies with minimal interest-bearing obligations. The company's core business is permissible, but the financial structure involves riba on the liability side.
3. Minor Interest Income
RH does not separately disclose interest income in the current filing.
Investors should seek qualified guidance on purification; ZakatInvest does not prescribe a fixed donation percentage.
How to Read the Quantitative Result
The record documents the examined FTSE, MSCI and Malaysia asset-based ratios. RH fails the debt screen; liquidity and receivables-plus-cash pass, while market-cap methods, hospitality revenue and interest income remain uncalculated.
Bottom Line
RH (RH) is doubtful on the current record. Its furniture and décor business is generally permissible, but the latest debt screen fails once finance debt and leases are included. Re-screen after a successor filing and consult a qualified scholar for a personal ruling.
RH provides luxury consumer-goods exposure through a generally permissible furniture business, but its financing and hospitality exposure require continuing review.
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