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Investing.com - Shares of luxury home furnishings retailer RH (NYSE:RH) shed more than a fourth of their value in premarket trading as investors factored in the impact of U.S. President Donald Trump’s latest tariff announcement and weighed disappointing fourth-quarter earnings.
The company posted fourth-quarter earnings per share of $1.58, falling short of the consensus estimate of $1.89. Revenue for the quarter came in at $812.4 million, below analysts’ expectations of $828.24 million.
For the current quarter, RH expects revenue growth of 12.5% to 13.5%, below projections of 16.3%, according to Bloomberg data. Adjusted operating margin is seen at between 6.5% and 7.0%.
RH provided full-year 2025 guidance forecasting revenue growth of 10% to 13%, under estimates of 14.6%. The annual adjusted operating margin outlook came in at 14% to 15%, compared to expectations of 14.9%.
In a note to clients, analysts at Morgan Stanley (NYSE:MS) flagged that RH was grappling with "slowing revenue" as consumers remain cautious against an economic backdrop clouded over by the possible impact of Trump’s trade policies.
Trump announced his broadest slate of tariffs to date on Wednesday, saying he would slap a baseline 10% duty on all foreign imports into the U.S. and impose greater levies on several longstanding trading partners in a bid to respond to perceived unfair trade practices.
China, the European Union, India, and Japan are among a number of countries set to face elevated so-called "discounted reciprocal" tariffs that aim to address foreign surcharges and other non-trade barriers. The White House considers these nations to be "bad actors" on trade.
The broad tariffs take effect on April 5, with the country-specific hikes starting April 9.
RH stands to be particularly exposed to the tariffs due to its reliance on sourcing materials from Vietnam, which faces a new U.S. import tariff of 46%, the Morgan Stanley analysts flagged.
Strategists at Barclays (LON:BARC) added that there was now "significantly more uncertainty" around the stock because of the tariffs, adding that it poses "risks to both sales and margin recovery."
(Scott Kanowsky contributed reporting.)