MW RH's forecast sinks shares, on expectations of 'higher-risk business environment'

By Bill Peters

CEO cites 'uncertainty caused by tariffs, market volatility and inflation risk,' but notes an uptick in demand

Shares of RH fell sharply after hours on Wednesday after the luxury furniture chain's full-year sales outlook came in shy of expectations, amid a forecast of what it characterized as a "higher-risk business environment this year" due to tariffs, seesawing markets and inflation.

The company, formerly known as Restoration Hardware, said it expects revenue growth of 10% to 13%, a bit below the roughly 15% forecast by FactSet.

Shares $(RH)$ sank 14% after hours on Wednesday.

Still, in the company's earnings release, Chief Executive Gary Friedman said that demand was higher as RH rolls out an array of new furniture collections.

"While we expect a higher-risk business environment this year due to the uncertainty caused by tariffs, market volatility and inflation risk, we believe it's important to separate the signal from the noise," he said, adding that the company has also been navigating "the worst housing market in almost 50 years."

"Despite that fact, we are performing at a level most would expect in a robust housing market," he added later. Demand, he said, was up 17% in the fourth quarter.

RH reported fourth-quarter revenue of $812 million, a 10% year-over-year gain. The company reported adjusted earnings of $1.58 a share.

Analysts polled by FactSet expected RH to report adjusted earnings of $1.92 a share for the fourth quarter, on revenue of $829.6 million.

RH has battled a tight housing market, marked by home prices and mortgage rates that are still out of reach for many potential homebuyers. Its wealthier customers, who are likelier to invest in their homes, are also more sensitive to stock-market fluctuations, of which there have been several, as Wall Street and businesses try to adapt to President Donald Trump's tough-to-predict tariff announcements.

In December, Friedman said that demand for RH's products was strong, as it overhauls and expands its product offerings, via dozens of new collections for furniture, lighting, rugs and other decor.

-Bill Peters

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April 02, 2025 16:35 ET (20:35 GMT)

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