Benzingaยท2025-09-26 16:29Core Viewpoint - RH's stock declined due to new tariff announcements and updated manufacturing and spending plans, impacting the home furnishings sector [1][2]. Company Summary - RH anticipates producing approximately 52% of its upholstered furniture in the U.S. next year, with this percentage expected to increase through 2026 [3]. - The company has incorporated about $30 million in additional tariff costs for the second half of the year, net of mitigation, and expects around $40 million in revenue to shift from Q3 to Q4 and Q1 of 2026 [3]. - Projected adjusted capital expenditures are between $200 million to $250 million in 2026 and $150 million to $200 million in 2027 and beyond, aimed at enhancing supply-chain resilience and addressing policy-driven cost pressures [4]. Industry Summary - The new tariffs, including a 30% duty on upholstered furniture, have been met with resistance from U.S. businesses, complicating operating conditions for companies like Ikea [5]. - Competitors such as Williams-Sonoma, Inc. and Wayfair Inc. experienced stock declines following the tariff announcements [5]. - A higher U.S. production mix may help RH mitigate import-related volatility, although near-term tariff costs and revenue timing shifts present execution risks [6].