Upscale home furnishings retailer RH reported weaker-than-expected earnings and warned that new 50% tariffs on Indian imports could constrain growth in 2025 and 2026. Imports from India, which are affected by the tariffs, account for nearly 7% of RH's sales.
© RH
Although revenue rose 8.4% last quarter, adjusted earnings per share were $2.93, at the low end of guidance and below analyst expectations. The company subsequently cut its full-year profit outlook amid uncertainty over when earnings might recover. Analysts, including Oppenheimer, have reduced earnings forecasts for the next two years due to persistent inflation and rising costs.
Shares rose nearly 3% to $223.87 following the results, but profit margins are expected to remain tight. The situation highlights broader market risks, as higher tariffs and inflation increase costs for retailers, potentially affecting global supply chains and consumer prices.
The RH case underscores the impact of trade policy changes on luxury home goods retailers, illustrating how import duties can squeeze margins even as demand stabilises.
Source: www.finimize.com
