During a quarterly earnings call on Wednesday, the CEO of RH, a notable home furnishings company formerly known as Restoration Hardware, experienced an unexpected twist as President Donald Trump’s tariff proposals were publicized. This revelation coincided with a significant drop in the company’s stock price, catching CEO Gary Friedman off guard as he addressed analysts.
As Friedman was discussing RH’s financial results, which failed to meet analysts’ expectations, he received a notification that the company’s stock had plummeted by 25%. His immediate reaction was one of surprise and concern: “Oh, really? Oh, s—. OK. I just looked at the screen. I hadn’t looked at it. It got hit when I think the tariffs came out,” he stated. He then emphasized the company’s transparency regarding its sourcing, noting that their operational details are clearly outlined in SEC filings.
According to a recent regulatory filing with the Securities and Exchange Commission (SEC), RH primarily sources its products from Asian countries, which are anticipated to face increased tariffs due to the new trade policies. The SEC report reveals that approximately 72% of RH’s products are sourced from Asia, with 35% originating from Vietnam and 23% from China. The remaining Asian supply comes from countries such as Indonesia and India.
In addition to its Asian sourcing, RH procures 18% of its products from North America, with 10% coming from the United States and the remaining percentage from Europe and other regions.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RH | RH | 164.48 | +18.82 | +12.92% |
RH operates a manufacturing facility located in North Carolina where a portion of its upholstery products are produced. Friedman expressed optimism regarding the future of the tariffs, suggesting they may eventually be lifted through negotiations with other nations. He indicated that while the tariffs may appear burdensome now, they could ultimately prove advantageous in the long run.
“Leverage is how you win negotiations, not bluffing,” he remarked. “My view is, I don’t think these tariffs are going to completely stick. I think if you’re these other countries, you’re going to start playing the few cards you have,” he said, asserting that negotiating leverage would yield positive outcomes over time.
Following the announcement, RH’s stock experienced a significant decline, closing down 40% in trading the following day.
