RH CEO reacts live to stock tanking on tariffs, poor earnings
RH CEO Gary Friedman watched the luxury furniture retailer’s stock tank during its earnings conference call with analysts Wednesday amid the unveiling of President Donald Trump’s tariff policy.
Two words summed up the situation:
“Oh, sh–. OK. … I just looked at the screen. I hadn’t looked at it. It got hit when I think the tariffs came out. And everybody can see in our 10-K where we’re sourcing from, so it’s not a secret, and we’re not trying to disguise it by putting everything in an Asia bucket.”
RH shares plunged around 40% as investors responded to the double whammy of RH releasing its poor earnings report and Trump’s levies on foreign countries. Thursday’s move marked the California-based company’s biggest-one day loss in its 13-year history on the public market and brought the stock to its lowest closing level since 2020.
RH, 1-day
Directly following Friedman’s expletive, the chief executive’s explanation of where the hit came from alluded to Trump announcing his controversial tariffs on imports to the U.S. on Wednesday afternoon.
Stock market futures cratered Wednesday night as Trump’s tariffs were announced. The Dow Jones Industrial Average dropped nearly 1,600 points at session lows on Thursday as the fallout continued.
Friedman said it’s “not a secret” that RH sources from Asia, but noted that most other large players in the home sector did the same.
Notably, Trump slapped levies of 46% on Vietnam and 32% on Taiwan. China’s true tariff rate rose to 54% following the new increases unveiled during the White House announcement.
“Anybody of scale in the home business has a high percentage of their content coming out of Asia,” he said. “Anybody who says they don’t, that would just shock me.”
‘Worst housing market in almost 50 years’
These duties offer yet another challenge for the seller of products like rugs and dinning tables. RH, whose stock capped off its worst quarter since 2020 this week, has already been contending with what Friedman described as the toughest housing market in around half of a century.
Specifically, Friedman pointed out to analysts that there were 4.09 million existing homes sold in the U.S. in 1978, when the country had a population of 223 million. In 2024, while the population shot up to 341 million, just 4.06 million homes were sold.
“The fact is we’ve been operating in the worst housing market in almost 50 years,” he said.
Still, Friedman said RH has been able to perform “at a level most would expect in a robust housing market.” Despite this statement, the company missed earnings expectations for the quarter and offered weak revenue guidance, with Friedman telling analysts to prepare for a “higher-risk business environment” due to market volatility and inflation risks in addition to tariffs.
Gary Friedman, CEO, Restoration Hardware
Scott Mlyn | CNBC
RH earned $1.58 per share, excluding items, on $812 million in revenue for the fourth quarter. Analysts surveyed by LSEG…
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