Core Insights - The luxury home furnishings sector is facing challenges due to economic headwinds and changing consumer preferences, impacting financial outlooks and strategic decisions of major players [1] - RH reported disappointing second-quarter results, leading to a decline in its share price [1][6] Financial Performance - RH's sales growth for the second quarter was 8.4%, slightly below the consensus estimate of 9.0%, despite improved demand from product transformation and new gallery openings [3] - Management has guided for third-quarter sales growth of 8%-10% and EBIT margin of 12%-13%, which is below the consensus expectations of 11% and 17.8% respectively [4] - RH has lowered its 2025 revenue growth and operating margin guidance to 9%-11% and 13.0%-14.0%, down from previous estimates of 10%-13% and 14.0%-15.0% [5] Market Reactions - RH shares were down 0.45% at $227.09, trading within a 52-week range of $123.03 to $457.26 [6] - Analysts have differing views, with JPMorgan maintaining an Overweight rating and raising the price target from $250 to $275, while Telsey Advisory Group downgraded its rating from Outperform to Market Perform and reduced the price target from $255 to $220 [8]
Tariff Headwinds Cloud RH Outlook, Analysts Split On Stock's Path Forward