RH (RH) Stock Dips Despite Revenue Growth as Tariffs Squeeze Margins
RH shares fell 2.49% to $153.31 despite reporting a 9% revenue increase to $884 million in Q3. The luxury home furnishings company continues to gain market share amid housing sector headwinds, but tariff impacts and expansion costs are pressuring profitability.
Operating margins contracted to 12.0% as Chinese tariffs and Paris showroom investments weighed on results. Adjusted EBITDA remained healthy at 17.6%, demonstrating RH's ability to maintain premium positioning despite cost pressures.
The company strengthened its balance sheet with improved cash FLOW and debt reduction, providing flexibility for future growth initiatives. Management maintained guidance for Q4 growth while cautioning about persistent margin pressures from global trade dynamics.
