Shares of Restoration Hardware (RH) tumbled 18.67% in after-hours trading on Wednesday following the release of its fourth-quarter earnings report that fell short of analyst expectations. The luxury home furnishings retailer reported adjusted earnings per share of $1.58, significantly below the consensus estimate of $1.92, while revenue came in at $812.406 million, missing the projected $829.563 million.

The disappointing results were compounded by the company's cautious outlook for the coming year. RH warned investors that it expects a "higher risk business environment" in the near future, citing uncertainties caused by tariffs, market volatility, and inflation risks. Despite these challenges, the company provided guidance for the first quarter, projecting revenue growth of 12.5% to 13.5%, and for the full fiscal year 2025, anticipating revenue growth of 10% to 13%.

While RH has been working to position itself in the luxury market, the miss on both top and bottom lines suggests that the company may be facing headwinds in its core business. Investors will likely be closely watching the company's conference call for more details on its strategy to navigate the challenging economic landscape and return to stronger growth. As the market digests this news, it remains to be seen how RH will adapt its business model to overcome the anticipated risks and meet its projected growth targets.