Shares of Restoration Hardware (RH) plummeted 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, despite showing a 119.44% increase from the same period last year.

RH's revenue also disappointed, coming in at $812.4 million, missing the projected $829.5 million. While this represents a 10.04% year-over-year increase, it wasn't enough to satisfy investor expectations. The company's outlook for the coming year added to the negative sentiment, with RH forecasting revenue growth of 10% to 13% for fiscal year 2025, which may be viewed as conservative given the current market conditions.

Adding to investor concerns, RH warned of a higher risk business environment in the coming year due to uncertainties caused by tariffs, market volatility, and inflation risks. This cautious stance, combined with the earnings miss, appears to have triggered a significant sell-off in the stock. As RH navigates these challenges, investors will be closely watching how the company adapts its luxury retail strategy in an increasingly uncertain economic landscape.