RH Reports Q2 Revenue Miss, Revises Full-Year Guidance Lower Due to Tariffs
Shares of luxury furniture retailer RH declined slightly following the release of its fiscal second-quarter earnings, which fell short of revenue expectations and prompted a reduction in its full-year outlook. The company cited a significant tariff impact as a key factor in its performance.
Tariff Pressures Weigh on Revenue and Margins
RH reported quarterly revenue of $899 million, missing analyst estimates of $905 million. In response, the company lowered its full-year revenue growth forecast to 9% to 11%, down from the previous range of 10% to 13%. Adjusted EBITDA margins were also revised downward to between 19% and 20%, compared to the prior 20% to 21% guidance.
The retailer attributed a $30 million hit to its forecast driven by tariffs, despite maintaining its prior outlook just three months earlier. CEO Gary Friedman highlighted that approximately $40 million of revenue is expected to shift from the third quarter into the fourth quarter and the first quarter of fiscal 2026 due to delays in product launches and pricing finalizations.
Delayed Product Launch and Manufacturing Challenges
RH postponed the release of its Fall Interiors Sourcebook by about two months as it awaited clarity on tariff rates to finalize pricing strategies. The company is also actively moving operations away from China and exploring manufacturing alternatives in India amid ongoing tariff uncertainties.
Uncertainty Looms Over Potential New Furniture Tariffs
President Donald Trump’s administration initiated a 50-day investigation in late August to determine new tariff rates on imported furniture, aiming to encourage domestic manufacturing. Friedman expressed skepticism about the feasibility of large-scale U.S. production of high-quality wood and metal furniture, noting that the industry hopes the investigation will reflect these challenges.
RH has not provided estimates of the financial impact should additional tariffs be imposed but emphasized its preparedness to compete under varying market conditions.
FinOracleAI — Market View
RH’s earnings miss and downward revision to guidance reflect tangible tariff-related headwinds disrupting its supply chain and delaying product launches. These factors introduce near-term pressure on revenue growth and margins. The ongoing U.S. tariff investigation adds uncertainty, posing risks to cost structures and pricing strategies.
Investors should monitor developments in tariff policy and RH’s progress in diversifying manufacturing sources. Potential escalation in tariffs could exacerbate cost pressures, while successful supply chain adjustments may mitigate risks.
Impact: negative
