Why RH Stock Plunged Today

Published: Monday, August 25, 2025 at 6:53 pm

RH Stock Plunges on Tariff Fears

Shares of RH, a luxury furniture retailer, experienced a significant drop on Monday, declining as much as 10% before settling with a 5% loss. The downturn followed a period of optimism for furniture makers, fueled by signals of potential interest rate cuts from the Federal Reserve. However, this positive sentiment was quickly overshadowed by news of potential new tariffs on furniture imports.

President Donald Trump announced on his social media platform, Truth Social, that a major tariff investigation on furniture imports into the United States is underway. The investigation is expected to conclude within 50 days, after which tariffs will be implemented on furniture from various countries. The specific rate of these tariffs remains undetermined. Trump stated that these tariffs aim to bring the furniture business back to states across the United States.

The announcement has raised concerns for companies like RH, which heavily relies on international sourcing for its products. While RH has diversified its supply chain, with 90% of its furniture sourced from countries like Vietnam, China, Europe, Indonesia, and India, only 10% comes from the United States. The impact of these potential tariffs on RH's business model is uncertain. It is unclear whether the tariffs would be in addition to existing country-specific tariffs or a separate levy.

RH's recent financial performance has shown signs of recovery, with revenue up 12% in its most recent quarter. However, the company is still recovering from a challenging period marked by a depressed housing market. While RH, as a premium manufacturer, may have the option to raise prices, the company's ability to maintain margins could be challenged if demand weakens.

BNN's Perspective: The potential for new tariffs introduces a significant element of uncertainty for the furniture industry. While the stated goal of bringing manufacturing back to the United States is understandable, the impact on companies like RH, which have established global supply chains, could be substantial. The balance between protecting domestic industries and the potential for increased consumer costs will be a key factor to watch as the tariff investigation unfolds.

Keywords: RH, furniture, tariffs, Donald Trump, import, supply chain, revenue, interest rates, housing market, China, Vietnam, stock, market

Full Story