Now, mark my words, the stock ticker for RH (RH) took a dive Monday, plummitin’ like a flatboat off a waterfall-down 10% before clawin’ its way back up to a 5% gain by 1:07 p.m. ET. A rollercoaster, if you will, though I reckon Wall Street’s version of a rollercoaster ain’t got no seatbelts.
Last week, folks in the furniture trade were sippin’ lemonade after Federal Reserve Chair Jay Powell hinted at interest rate cuts. You know, that old tune: “The market will recover, just you wait!” But hold yer horses-along comes President Trump, still in his Truth Social pasture, announcin’ a new round of furniture tariffs. Seems he’s got a vendetta against sofas, dressers, and whatever else China and Vietnam ship into our fine country.
Fifty Days and a Tariff Tempest
Now, RH and its ilk used to build their wares in China, but that first Trump term taught ’em a lesson: diversify or perish. They shifted production to Vietnam and elsewhere, where tariffs hover like a buzzard-55% on China, 20% on Vietnam. But Trump, bless his stubborn heart, ain’t satisfied. He’s fixin’ to drop another tariff bombshell in 50 days, “to bring the furniture business back to the Union.” Says he, with all the solemnity of a preacher, “Thank you for your attention to this matter!”
“I am pleased to announce… Furniture coming into the United States will be Tariffed at a Rate yet to be determined. This will bring the Furniture Business back to North Carolina, South Carolina, Michigan, and States all across the Union. Thank you for your attention to this matter!”
Now, the question is: Will these tariffs stack atop the existing ones, or start a new pile? RH won’t know until that 50-day clock ticks down. And let me tell you, if these tariffs are as heavy as a Mississippi mud slide, RH’s got a problem. Last year, they sourced just 10% of their furniture domestically-90% came from Vietnam, China, Europe, and other places where folks don’t grow oak trees in backyards.
A Recovery in Peril
RH’s revenue had been creepin’ upward lately, up 12% from the prior year. But let’s be clear: That’s lappin’ over last year’s slump, which CEO Gary Friedman called “the worst housing market in almost 50 years.” A low bar, friend, but a bar none the less.
Now, these new tariffs? They’re a spanner in the works. RH’s a premium brand, sure, and they might raise prices if rates drop and the housing market perks up. But if demand stays flat, well, even kings must bow to the gods of margin compression. Dividend hunters like myself keep a wary eye on such things-what good’s a dividend if the company’s bleedin’ cash?
And so we’re left with a tale as old as the stock market itself: greed, tariffs, and the eternal struggle to keep the gravy train rollin’. Whether RH’s stock rebounds or crumbles like a poorly glued chair leg, one thing’s certain-this ain’t over till the last nail’s driven.
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2025-08-25 21:58