RH stock price plummeted 19.5% overnight.

This luxury furniture brand formerly known as Restoration Hardware missed across the board in its earnings report last night.
The numbers are ugly:
Revenue of $843 million, down 3.6% from expectations.
EPS of $1.53, 30.6% below expectations.
Next quarter guidance of $789.5 million, 10.2% below analyst estimates.
The stock dropped directly from $141 to $114.
The company offered two reasons: tariffs causing supply chain reordering, impacting $30 million in revenue.
Bad weather at the end of the quarter also knocked off $10 million.
But frankly, these are just excuses.
The real issue is: luxury spending is cooling down.
What does RH sell? $5,000 sofas, $3,000 dining tables, $800 lamps. These big-ticket items are extremely sensitive to interest rates.
Currently, mortgage rates in the U.S. are over 6.5%. Who’s changing furniture at this time?
Deeper logic — RH’s business model is “membership + showroom.” You pay $175 annual fee to become a member and enjoy a “25% discount.”
Sound familiar? Cutting to the chase.
Their Gallery stores (those huge showrooms) have extremely high rent.
High fixed costs mean revenue is highly sensitive — even a slight dip causes profits to collapse.