From Nasdaq: 2025-06-16 01:33:00

RH stock, formerly Restoration Hardware, surged 15% in after-hours trading after reaffirming FY 2025 outlook with 10-13% revenue growth. Q1 results beat EPS but missed sales estimates, leading to a 1.18% drop. Despite challenges like tariff pressures and a tough housing market, RH plans aggressive supply chain adjustments and global expansion.

In Q1 2025, RH reported $8.04 million net income, reversing a loss from the previous year. Revenue increased by 12% to $814 million. The company is facing challenges from a sluggish housing market and rising tariffs, impacting future earnings. RH is making supply chain adjustments to mitigate tariff pressures and focusing on global expansion.

RH is adjusting its supply chain by reducing imports from China and increasing production in the US and Italy. Tariffs are expected to impact Q2 revenue by around six percentage points. The company is delaying a new concept launch due to tariff uncertainty but continues with global expansion plans, including a flagship store opening in Paris.

Investors should consider RH’s historical stock performance during downturns, showing high sensitivity to macroeconomic shocks. The stock has a history of sharp drawdowns during turbulent times, raising concerns about its durability in a potential recession. Valuation metrics indicate a stretched valuation compared to historical averages and the S&P 500.

RH is undergoing a significant pivot with supply chain restructuring and international expansion efforts to improve margins. However, the stock remains volatile and richly valued, with a history of sharp declines during turbulent times. Investors are advised to exercise caution given the current market conditions and RH’s historical performance.



Read more at Nasdaq: RH’s Profit Returns But Headwinds Persist