Tariff Headwinds Cloud RH Outlook, Analysts Split On Stock's Path Forward

As economic headwinds and shifting consumer preferences reshape the retail landscape, companies in the luxury home furnishings sector are feeling the pressure to adapt. Major players in this space are navigating challenges such as fluctuating demand and global trade tensions, which are impacting their financial outlooks and strategic decisions.

Shares of RH (NYSE:RH) came under pressure in early trading on Friday, after the company reported downbeat second-quarter results.

Here are some takeaways from analysts who attended.

• JPMorgan analyst Christopher Horvers maintained an Overweight rating, while raising the price target from $250 to $275.
• Telsey Advisory Group analyst Cristina Fernández downgraded the rating from Outperform to Market Perform, while reducing the price target from $255 to $220.

Check out other analyst stock ratings.

 JPMorgan: RH hit the low end of its sales growth and operating margin guidance of 8%-10% and 15%-16%, respectively, Horvers said in a note. The company's sales growth of 8.4% came in slightly below the consensus of 9.0%, "despite strengthening demand due to product transformation, new gallery openings, and ongoing strength in Europe," he added.

Management guided to third-quarter sales growth of 8%-10% and EBIT margin of 12%-13%, below consensus of 11% and 17.8%, respectively, the analyst stated. The operating margin outlook reflects around $30 million of tariff costs, "an expense that will continue to build into 1H26," he further wrote.

Telsey Advisory Group: RH lowered its 2025 revenue growth and operating margin guidance to 9%-11% and 13.0%-14.0%, from its earlier outlook of 10%-13% and 14.0%-15.0%, respectively, Fernández said in the downgrade note. The operating margin guidance came in much below the consensus of 17.9%, she added.

The analyst expressed concern about "the impact on profitability from incremental tariffs and ongoing investment spending to scale the international business." RH has the high exposure to furniture, a sector that is at risk of additional tariffs, she further stated.

RH Price Action: RH shares were down 0.45% at $227.09 at the time of publication on Friday. The stock is trading within its 52-week range of $123.03 to $457.26, according to Benzinga Pro data.

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