Shares of Restoration Hardware (RH) surged 5.12% in pre-market trading on Monday, as the premium furniture retailer announced strategic moves to mitigate tariff risks and provided an optimistic free cash flow forecast for fiscal 2025.

RH revealed that it has successfully relocated the majority of its production from China to Vietnam and its North Carolina facility. This strategic shift has resulted in better than pre-tariff landed China pricing, potentially boosting the company's profit margins. Moreover, RH stated that a possible agreement between the US and Vietnam to reduce tariffs could further enhance its margins, adding another layer of optimism for investors.

Adding to the positive sentiment, RH introduced a fiscal 2025 free cash flow forecast of $250 million to $350 million, signaling strong financial health and potential for growth. This outlook, combined with the production relocation strategy, appears to have renewed investor confidence in RH's ability to navigate challenges in the current economic environment and maintain its competitive edge in the premium furniture market.