Home furnishings boss live reacts to stock tanking 40% from tariffs and poor earnings: ‘Oh s–t’

New York Post - Apr 4th, 2025

RH, a luxury home furnishings retailer, experienced a dramatic 40% plunge in its stock value during a Wall Street selloff, following a disappointing earnings report and the announcement of new tariffs by President Trump. CEO Gary Friedman, visibly surprised during an earnings call, attributed the stock's sharp decline to the sweeping tariffs on Asian imports announced by the administration. These tariffs, including levies of 46% on Vietnamese goods, 32% on Taiwanese imports, and a 54% hike on Chinese products, have exacerbated cost concerns for RH, which relies heavily on overseas manufacturing. The company's stock, which closed at $250 before the tariff announcement, fell to $145.66 in subsequent trading, marking a 63% decline for the year.

The tariffs have sparked renewed fears about rising costs for companies heavily dependent on Asian manufacturing, such as RH. Friedman's comments highlighted the challenges of operating in what he described as the weakest housing market in nearly 50 years, with stagnant home sales despite a growing US population. Despite missing analyst expectations, RH projects modest revenue growth for the upcoming year, though it remains below Wall Street's expectations. In response to the challenging trade climate, Friedman hinted at a strategic shift in sourcing, suggesting a significant change in the company's operational strategy to adapt to the new economic realities. This move could potentially reshape the competitive landscape for the home furnishings industry.

Earnings Report Rh Housing Market Trump Administration Tariffs Gary Friedman Wall Street Selloff Asian Imports

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RATING

6.8

Fair Story

Consider it well-founded

The article provides a clear and timely account of RH's stock performance and the challenges posed by new tariffs and a weak housing market. It accurately reports key figures and events, but could benefit from a broader range of perspectives and more detailed verification of some claims. The writing is clear and accessible, though additional context and transparency about potential biases would enhance its quality. Overall, the story effectively informs readers about significant developments affecting RH and the broader economic landscape, with room for improvement in balance and source quality.

Accuracy

The article accurately reports the significant drop in RH's stock price, attributing it to a disappointing earnings report and new tariffs announced by President Trump. The specific figures, such as the stock's closing price at $145.66 and the missed earnings expectations, align with reported data. However, the article could improve by providing more detailed verification of the exact timing of the stock movements and the specific tariffs' impact on RH's supply chain. Additionally, while the CEO's comments on the housing market are included, more context or data to support his claims would enhance the article's accuracy.

Balance

The article primarily presents the perspective of RH's CEO, Gary Friedman, and focuses on the company's challenges following the tariff announcement and earnings report. While it provides a clear view of RH's position, it lacks alternative perspectives, such as analyst opinions or comments from other industry experts. Including these could offer a more balanced view of the situation and the broader market impact.

Clarity

The article is well-structured and uses clear language to convey the events and their implications. The sequence of events is logically presented, making it easy for readers to follow the narrative. However, the article could benefit from more explicit explanations of technical terms or concepts, such as tariffs and their economic impact, to enhance understanding for a general audience.

Source quality

The article relies heavily on statements from RH's CEO and data from the earnings report. While these are credible sources, the lack of independent verification or input from external analysts or experts limits the depth of the reporting. Including a wider range of sources would enhance the article's credibility and provide a more comprehensive understanding of the issue.

Transparency

The article provides clear information about the events and statements from RH's CEO but lacks detailed explanations of the methodology behind the reported figures and projections. Additionally, it does not disclose any potential conflicts of interest or biases, which would be important for transparency, especially given the financial implications of the news.