RH shares opened sharply higher after the White House announced a one-year postponement of planned tariff increases on imported furniture, providing relief from a 25% cost headwind on products sourced abroad. The stock jumped from a previous close of $179.15 to an opening print of $191.55, trading 204,365 shares on the first half-hour of trading. This policy reprieve eliminates an immediate margin pressure and underpins today’s rally, as investors priced in a full year without further duty hikes on items such as upholstered furniture and kitchen cabinetry.

In its latest quarterly report, RH posted revenue of $883.81 million, up 8.9% year-over-year, and delivered free cash flow of $83 million for the quarter, lifting year-to-date free cash flow to $198 million. Earnings per share of $1.71 fell short of consensus by $0.42, but management reiterated full-year free cash flow guidance of $250 million to $300 million. With net debt at $2.4 billion against a market capitalization of $3.6 billion, the strong cash generation provides a clear path to debt reduction and supports ongoing investments in growth initiatives.

RH is executing an ambitious international rollout, having launched flagship galleries in England (2023) and Paris (2025) and planning openings in London and Milan in 2026. These immersive, design-driven spaces are intended to establish the brand globally and seed its design-services business, though management warns of a 200 basis-point operating margin drag in the near term due to startup costs. On the legal front, Robbins Geller Rudman & Dowd has initiated an investigation into potential securities law violations, introducing litigation risk and potential volatility should further details emerge.