Shares of Restoration Hardware (RH) tumbled 5.61% in pre-market trading on Friday, as the luxury furniture retailer faced a perfect storm of negative factors. The company's stock price was hit by a combination of disappointing earnings results, a significant analyst downgrade, and growing concerns over the impact of tariffs on its business model.

RH reported fourth-quarter fiscal 2024 adjusted earnings per share of $1.58, falling short of the Zacks Consensus Estimate of $1.91. This earnings miss was quickly followed by a harsh assessment from Bank of America Global Research, which cut its rating on RH from Buy to Underperform and slashed its price objective from $410 to $130, representing a substantial reduction in the stock's perceived value.

Adding to the company's woes are escalating worries about the potential impact of tariffs on RH's operations. As a high-end furniture retailer that sources a significant portion of its products from countries like China and Vietnam, RH is particularly vulnerable to trade tensions. Analysts have suggested that the company is "fully at the mercy" of tariff-related challenges, which could lead to increased production costs and pressure on profit margins. The uncertain consumer reaction to potential price increases due to tariffs may also put additional strain on big-ticket discretionary purchases, further complicating RH's business outlook.