Furniture Retailer RH Bets On Tariff Chaos: The Company's Supply Chain Pivot Could Make Or Break 2025, With Several Competitors 'Going Bankrupt'

Being faced with a turbulent trade environment in recent months, luxury furnishing retailer RH RH is taking several steps and even leaning into the volatility to tackle the tariffs.

What Happened: On Thursday, during its first quarter results, the company outlined its plans to outmaneuver the industry turmoil caused by President Donald Trump’s “Liberation Day” tariffs, while using the disruption to reset its supply chains and grab market share.

This comes as many of its competitors, according to CEO Gary Friedman, are on the verge of bankruptcy. “We stopped shipments,” Friedman says, in response to the tariffs, adding that the surprise tariff announcements in early April didn’t follow suit with business as usual. “You don't just go, Oh yes, business as usual,” he said.

As a result, RH expects second-quarter revenue growth to slow to between 8% and 10%, compared to 12% growth in Q1, citing a roughly six-point drag attributed to the tariffs. The shortfall is expected to be recovered in the second half of the year.

In response to the tariffs, RH is cutting its imports from China, from 16% to just 2%, while ramping up production domestically in the U.S., as well as in Italy for its core upholstery categories. It says that some of its vendor partners have agreed to absorb a significant portion of the tariff burden.

Despite the near-term turbulence, Friedman framed the situation as an opportunity. “There [are] a lot of people going bankrupt,” he said. “They don't have the scale, the leverage, or the strategic flexibility.”

According to Friedman, RH's ability to act decisively in a downturn, rather than retreat, positions it to emerge stronger as others falter.

Why It Matters: Being significantly exposed to international trade, the stock plunged 40% when the tariffs were first announced, which coincided with a disappointing fourth quarter performance.

It, however, rallied 29% just a few days down the line when Trump announced a 90-day pause on the tariffs, which underscores the level of exposure the company has to foreign trade and tariffs.

During its first quarter results on Thursday, RH reported $813.95 million in revenue, and while it missed consensus estimates at $818.12 million, it came in well ahead of estimates on earnings, at $0.13 per share, against analysts estimating a loss of $0.009 per share.

Price Action: Shares of RH were down 1.18% on Thursday, ending at $176.87, but have since surged 18.05% during after-hours, following its first quarter results.

According to Benzinga’s Edge Stock Rankings, RH fares poorly across the board but has a favorable price trend in the short term. Click here for deeper insights into the stock, its peers and competitors.

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