Why RH (RH) Is Down 6.0% After Trump Tariff Probe Sparks New Supply Chain Uncertainty

• Earlier this week, President Trump announced a federal investigation into furniture imports that could lead to tariffs at an as-yet-undetermined rate on items brought into the United States.
• Even though RH has shifted much of its manufacturing away from China to Vietnam and its own US factory, uncertainty remains regarding how the potential tariffs could still affect its supply chain and cost structure.
• With fresh tariff uncertainties on furniture imports, we'll explore how this development could alter RH's investment outlook and risk profile.

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RH Investment Narrative Recap

To be a shareholder in RH, you need to believe in its premium brand position, expansion into new galleries, and the ability to manage costs amid a volatile housing market. The federal investigation into furniture imports introduces more near-term uncertainty around tariffs, which could threaten margin improvement, a key short-term catalyst, while amplifying the largest current risk: supply chain cost pressures. If the resulting tariffs are limited or exclude RH’s main sourcing countries, the impact may remain manageable, but the lingering ambiguity is front and center for investors right now.

In the wake of this tariff news, RH’s recent expansion with RH Manhasset, The Gallery at Americana, stands out. This 19,000 square foot immersive retail concept showcases RH’s ongoing investment in brand experience and broadening its physical presence, which remains a core catalyst for potential sales growth, even as shifting import costs may present hurdles to its profitability targets in the near term.

On the other hand, investors will need to watch closely how rising supply chain costs from possible tariffs could impact RH’s ability to...

Read the full narrative on RH (it's free!)

RH's outlook anticipates $4.3 billion in revenue and $442.6 million in earnings by 2028. Achieving this would require annual revenue growth of 9.6% and an increase in earnings of $358.5 million from the current $84.1 million.

Uncover how RH's forecasts yield a $262.25 fair value, a 62% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community put RH’s potential between US$220.85 and US$420.02 per share. With tariff uncertainties rising, these wide-ranging opinions highlight just how much views on margin risks and future earnings can differ, prompting you to consider more than one angle when making your own assessment.

Explore 5 other fair value estimates on RH - why the stock might be worth just $220.85!

Build Your Own RH Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your RH research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free RH research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate RH's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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