RH (NYSE:RH), formerly known as Restoration Hardware, reported second quarter financial results below Wall Street estimates, sending the luxury furniture store’s shares lower on Friday.
Revenue was up 8.4% year-over-year at $899.15 million, falling short of expectations of $905 million.
Adjusted earnings per share were $2.93, up from $1.69 in the year-ago period but missing estimates of $3.22.
The company noted that it saw a 13.7% increase in demand despite tariff uncertainty and a weak housing market.
CEO Gary Friedman highlighted that the company continues to shift sourcing out of China. It has also identified alternative countries to India, which supplies the business with hand knotted rugs.
The company also revised its 2025 guidance due to the impact of tariffs, with its updated outlook reflecting a $30 impact of tariffs.
It now expects full-year revenue growth in the range of 9% to 11%, down from its earlier guidance of 10% to 13%.
It guided adjusted operating margin of 13% to 14%, adjusted EBITDA margin of 19% to 20% and free cash flow of $250 million to $300 million.
“While the sky in our sector has been darkened by inflation, interest rates, tariffs and global politics, those clouds will soon pass, and it will not only be clear skies, but also be clear that it was a good time to be a shareholder of RH,” Friedman said.
Shares of RH traded down 7.4% at about $211 shortly before US markets opened on Friday.