RH Reports Missed Expectations, Warns Tariffs to Hit Results and Outlook

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering the USA

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Image Source: Scott Myln, CNBC

RH, the upscale home furnishings retailer, has posted second-quarter results that fell short of analysts’ estimates, with management attributing much of its underperformance to tariff uncertainty and a weak housing market. The company also revised its full-year outlook downward as it navigates rising costs tied to global trade policy.

For the quarter, RH reported adjusted earnings per share of $2.93, below the forecasted ~$3.20, while revenue grew by about 8% year-over-year, reaching approximately $899 million. That revenue also came in slightly under expectations of around $905 million. The misses, while modest, sharpened concerns among investors already jittery over trade tensions and inflation pressures.

RH said that existing and proposed tariffs have created significant headwinds: increased import costs, supply chain disruptions, and uncertainty that complicates pricing and inventory planning. The company noted a particular impact from U.S. duties on imports from India and China, countries that make up a meaningful share of its supply mix. In response, RH is accelerating efforts to shift some production and sourcing away from high-tariff countries, increasing capacity in North Carolina, and working closely with vendor partners to absorb and mitigate cost pressures where possible.

The company estimated an additional impact of tens of millions of dollars from incremental tariffs in the second half of the fiscal year, prompting RH’s management to adjust expectations accordingly.

Given these headwinds, RH narrowed its full-year revenue growth forecast to between 9% and 11%, down from an earlier projection of 10% to 13%. Similarly, the company lowered its forecast for its adjusted EBITDA margin to 19% to 20%, from a prior target range of 20%-21%. These adjustments reflect both caution over rising costs and an acknowledgment that macroeconomic‐ and housing‐market weaknesses are likely to persist.

Following the earnings release and guidance revision, RH’s stock declined in trading, reflecting investor concern over margin compression, higher expenses, and the uncertain outlook ahead. Sector analysts have flagged RH’s sensitivity to U.S. trade policy and housing market trends, especially given the company’s reliance on discretionary customer spending for large furniture purchases.

For RH, navigating tariffs, inflation, and housing softness will be critical in maintaining profitability. How well it can shift its supply chain, manage vendor relationships, and limit margin erosion will likely shape investor sentiment in the months ahead.