RH Delays Tariff Increase, Reports $198 Million Free Cash Flow
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 03 2026
0mins
Should l Buy RH?
Source: NASDAQ.COM
- Tariff Delay: The Trump administration's decision to postpone the tariff increase on certain furniture imports, originally set for January 1, 2026, maintains the current 25% rate, providing breathing room for RH and other furniture companies while alleviating market uncertainty.
- Cash Flow Growth: RH reported a 9% revenue increase in its latest quarter, with free cash flow reaching $83 million and a year-to-date total of $198 million, while management anticipates full-year free cash flow between $250 million and $300 million, showcasing the company's financial resilience amid a challenging housing market.
- International Expansion: RH opened RH England in 2023 and plans to expand to Paris in 2025, with additional European galleries set to launch in London and Milan in 2026, positioning these locations as brand showcases to enhance awareness and drive demand for its design services.
- Market Challenges: Despite the positive tariff news, RH faces significant challenges, including approximately $2.4 billion in net debt and an unpredictable housing market, with management projecting a near-term operating margin impact of about 200 basis points from international expansion investments, necessitating cautious risk assessment by investors.
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Analyst Views on RH
Wall Street analysts forecast RH stock price to rise
13 Analyst Rating
5 Buy
6 Hold
2 Sell
Hold
Current: 195.260
Low
144.00
Averages
203.45
High
283.00
Current: 195.260
Low
144.00
Averages
203.45
High
283.00
About RH
RH is a retailer and luxury lifestyle brand operating primarily in the home furnishings market. The Company offers collections through its retail galleries, sourcebooks, and online at RH.com, RHModern.RH.com, RHBabyandChild.RH.com, RHTEEN.RH.com and Waterworks.com. The Company offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, and baby, child and teen furnishings. Its segments include RH Segment, Waterworks and Real Estate. The RH Segment and Waterworks segments include all sales channels accessed by its customers, including sales through retail locations and outlets, including hospitality, websites, sourcebooks, and the trade and contract channels. The Real Estate segment represents operations associated with certain of its equity method investments and consolidated variable interest entities that are non-wholly owned subsidiaries and have operations that are not directly related to its segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Design and Materials: The products in the new sourcebook are crafted from the finest materials, showcasing RH's unique position in the luxury market, which is expected to enhance brand image and competitive strength.
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- Asset Management Proportion: Following this acquisition, RH now represents 2.07% of Greatmark's AUM, highlighting its significance in the investment portfolio despite not being among the top five holdings.
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- Management Strategy: CEO Gary Friedman successfully implemented a membership model that initially faced backlash but ultimately locked in customers and boosted sales, showcasing the management's foresight and adaptability.
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- Market Expansion: The company has launched its brand in Europe, opening lavish galleries in cities like Paris, London, and Milan, significantly increasing its addressable market and positioning for future growth.
- Successful Membership Model: RH pivoted to a membership model in 2016, charging an annual fee of $200, which initially faced challenges but ultimately locked in customers and boosted sales, showcasing the management's strategic foresight.
- Stock Buyback Strategy: In 2023, the company repurchased approximately 25% of its outstanding shares, aiming to enhance earnings per share, and with a potential recovery in the housing market, RH is positioned for long-term profit growth.
See More
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- European Expansion: By launching lavish galleries in cities like Paris, London, and Milan, RH significantly increases its addressable market, which is expected to drive future revenue growth, particularly as signs of recovery emerge in the housing market.
- Management Acumen: CEO Gary Friedman has effectively locked in customers through a membership model and share buybacks, repurchasing about 50% of outstanding shares in 2017 and approximately 25% in 2023, setting the stage for future earnings growth and shareholder value enhancement.
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- High Strike Call Options: Within FSLR, the $270 strike call option expiring on June 18, 2026, has seen 2,867 contracts traded today, equating to approximately 286,700 underlying shares, suggesting an increased bullish sentiment among investors regarding its stock price.
- Maplebear Options Activity: Maplebear Inc (Ticker: CART) recorded an options trading volume of 36,382 contracts today, representing around 3.6 million shares, or approximately 62.9% of its average daily trading volume of 5.8 million shares over the past month, reflecting active market interest in its stock.
- CART Call Options Popularity: For CART, the $37.50 strike call option expiring on February 13, 2026, has seen 9,801 contracts traded today, representing approximately 980,100 underlying shares, indicating strong investor confidence in its future growth potential.
See More
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- Sourcebook Launch: RH announced the release of the 2026 Outdoor Sourcebook, featuring over 420 pages of outdoor collections that reflect the brand's commitment to exceptional design and uncompromising quality, aimed at attracting high-end consumers.
- Design and Materials: The products in the new sourcebook are crafted from the finest materials, showcasing RH's unique position in the luxury market, which is expected to enhance brand image and competitive strength.
- Market Coverage: Operating across the United States, Canada, the United Kingdom, and Europe, RH offers collections through retail galleries, sourcebooks, and online platforms, thereby increasing the brand's global reach and customer touchpoints.
- Integrated Experiences: RH provides integrated hospitality experiences in its galleries, aiming to enhance customer shopping experiences and increase customer loyalty, which will drive sales growth.
See More
Greatmark Increases RH Stake to 2.07% Amid Market Recovery Signs
- Share Increase: Greatmark Investment Partners increased its RH shares by 16,560 during Q4 2025, with an estimated trade value of $2.83 million, indicating confidence in the company's growth potential.
- Asset Management Proportion: Following this acquisition, RH now represents 2.07% of Greatmark's AUM, highlighting its significance in the investment portfolio despite not being among the top five holdings.
- Market Performance: As of January 26, 2026, RH shares were priced at $219.09, down 46.7% over the past year, yet the stock rebounded by 13.5% at the start of 2026, reflecting growing market recognition of the company's prospects.
- Industry Outlook: Despite cost pressures from tariffs, RH achieved a 9% revenue increase in Q3, demonstrating resilience in a challenging market, with signs of a housing recovery likely to further boost stock prices.
See More
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- Revenue Growth: RH achieved $884 million in revenue for Q3, marking a 9% increase despite facing the worst housing market in nearly 50 years and tariff pressures, demonstrating resilience and profitability in adversity.
- Market Expansion: The company launched its brand in Europe and opened lavish galleries in cities like Paris, London, and Milan, significantly increasing its addressable market and expected to drive future revenue growth.
- Management Strategy: CEO Gary Friedman successfully implemented a membership model that initially faced backlash but ultimately locked in customers and boosted sales, showcasing the management's foresight and adaptability.
- Share Buyback Program: RH repurchased approximately 25% of its outstanding shares in 2023, aiming to enhance earnings per share and lay the groundwork for recovery, with profit margins expected to rebound to as high as 20% in a healthy housing market.
See More
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- Revenue Growth: RH reported $884 million in revenue for Q3, a 9% increase year-over-year, demonstrating strong profitability despite facing the worst housing market in nearly 50 years and tariff pressures.
- Market Expansion: The company has launched its brand in Europe, opening lavish galleries in cities like Paris, London, and Milan, significantly increasing its addressable market and positioning for future growth.
- Successful Membership Model: RH pivoted to a membership model in 2016, charging an annual fee of $200, which initially faced challenges but ultimately locked in customers and boosted sales, showcasing the management's strategic foresight.
- Stock Buyback Strategy: In 2023, the company repurchased approximately 25% of its outstanding shares, aiming to enhance earnings per share, and with a potential recovery in the housing market, RH is positioned for long-term profit growth.
See More
RH Reports $884 Million Q3 Revenue Amid Housing Market Challenges
- Revenue Growth: Despite facing the worst housing market in nearly 50 years, RH reported $884 million in revenue for Q3, reflecting a 9% increase and demonstrating resilience and continued market share growth in the home furnishings sector.
- European Expansion: By launching lavish galleries in cities like Paris, London, and Milan, RH significantly increases its addressable market, which is expected to drive future revenue growth, particularly as signs of recovery emerge in the housing market.
- Management Acumen: CEO Gary Friedman has effectively locked in customers through a membership model and share buybacks, repurchasing about 50% of outstanding shares in 2017 and approximately 25% in 2023, setting the stage for future earnings growth and shareholder value enhancement.
- Future Growth Potential: With a current market cap of $4.3 billion, RH could achieve a ten-bagger by doubling its annual revenue to $8 billion and restoring profit margins to nearly 20%, showcasing the high-margin potential of its luxury business model over the next five to ten years.
See More
