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4w ago

RH Stock Plummets Over 40% Following Tariffs and Weak Earnings

The luxury home retailer faces significant challenges as new U.S. tariffs target its Asian supply chain, compounding the impact of disappointing financial results.

RH Chairman and Chief Executive Officer Gary Friedman

Overview

  • President Donald Trump announced steep tariffs on Asian imports, including 46% on Vietnam and 34% on China, directly affecting RH's supply chain, which sources 72% of its products from the region.
  • RH's stock experienced its worst single-day drop in its public history, falling over 40% after the tariff announcement and a weaker-than-expected earnings report.
  • The company reported fourth-quarter adjusted earnings per share of $1.58, falling short of analyst expectations of $1.92, with revenue also missing forecasts.
  • CEO Gary Friedman expressed surprise during the earnings call, acknowledged the company's vulnerability to tariffs, and outlined plans to accelerate supply chain diversification.
  • Despite current challenges, RH projects revenue growth of 10-13% for fiscal 2025, while navigating broader economic pressures, including a historically weak U.S. housing market.