RH (RH) Q2 2025 earnings

Luxury furniture retailer RH recently released its fiscal second-quarter earnings report, which revealed a significant miss in revenue expectations. As a result, the company’s shares experienced a slight decline on Friday. The report attributed the revenue shortfall to the impact of tariffs, which have been a major concern for the industry.

The company announced that it will take an additional $30 million hit to its forecast due to tariffs, despite standing by its full-year projection just three months ago. This revision has led to a decrease in RH’s full-year revenue outlook, which is now expected to be up 9% to 11%, compared to the previous estimate of 10% to 13%. The adjusted earnings before interest, taxes, depreciation, and amortization margins are also expected to be lower, ranging from 19% to 20%, compared to the previous estimate of 20% to 21%.

Impact of Tariffs on RH’s Business

RH reported revenue of $899 million, which fell short of Wall Street estimates of $905 million. The company also delayed the introduction of its Fall Interiors Sourcebook by roughly two months, as it waited to finalize pricing depending on tariff announcements. According to CEO Gary Friedman, the company expects approximately $40 million in revenues to shift out of the third quarter and into the fourth quarter and the first quarter of 2026.

The company is facing uncertainty due to the possibility of new tariffs on imported furniture, which was announced by President Donald Trump in late August. The president stated that his administration was conducting a 50-day investigation to establish a yet-to-be-determined tariff rate on imported furniture, with the goal of “bringing the furniture business back” to the U.S. This move has added to the uncertainty surrounding the industry, and RH is continuing to shift its operations out of China and searching for alternatives to its India manufacturing.

CEO’s Perspective on Tariffs and Business Outlook

CEO Gary Friedman expressed his concerns about the impact of tariffs on the industry, stating that most companies in the industry hope that the investigation will reveal the difficulty of bringing furniture manufacturing back to the U.S. Friedman also emphasized that RH is well-positioned to compete favorably in any market condition, despite the uncertainty surrounding tariffs. The company’s fiscal second-quarter earnings report did not include estimates of the potential changes that could occur if Trump follows through with the furniture tariff.

Overall, RH’s earnings report highlights the challenges faced by the luxury furniture industry due to tariffs and trade uncertainty. As the company continues to navigate these challenges, it remains focused on shifting its operations and finding alternative manufacturing options to mitigate the impact of tariffs on its business.