RH’s CEO had a very relatable reaction when he heard his stock was plunging: “Oh shit.”
On an earnings call on Wednesday for the company previously known as Restoration Hardware, Gary Friedman cursed when he found out RH’s stock fell 26% after hours as investors reacted to a major tariff announcement.
“We’re just really well positioned right now. I think that’s the headline. If you’re going to bet on somebody in this race, and what’s our stock now?” Friedman said. “Oh really? Oh shit, okay. I just looked at the screen.”
Friedman said that the stock was hit after Wednesday’s “Liberation Day” tariffs were announced because investors recognized the company gets most of its luxury homegoods from affected countries.
In the year that ended in February, RH reported that 72% of its products were sourced from Asia, with significant chunks coming from Vietnam and China. The rest of its Asia goods come from India and Indonesia, the company said Wednesday.
On Wednesday, President Donald Trump announced a 34% retaliatory tariff on China and 46% tariffs on Vietnam. India and Indonesia were hit with 26% and 32% in duties, respectively.
Friedman said that other home decor and furnishing businesses were going through a similar challenge.
“I know most of the businesses pretty well,” he said. “So we’re all in the same boat.”
RH acknowledged that tariffs could hit its business in its annual report.
“Significant uncertainty exists as to whether and when tariffs may be reduced or imposed, and what countries may be implicated. Given that we cannot reasonably predict the timing or outcomes of trade actions by the US government or other countries, the impact of such actions on our business and results of operations remains uncertain,” the company wrote.
RH said in the filing that it had begun moving its supply chain away from higher-tariff countries — but that might not be enough.
“The ability to predict tariff rates in different countries may be difficult as policies may change on short notice,” the company wrote.
RH reported a 5% increase in 2024 revenue to $3.18 billion, compared to last year. Its stock is down over 37% so far this year.
Governments use import tariffs to encourage local manufacturing, but they drive up the cost of production for businesses that rely on foreign raw materials. These duties are likely to raise prices for everyday goods Americans use. While companies might choose to absorb a portion of the costs, customers usually shoulder most of the burden.
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” Trump said during Wednesday remarks.
