We're Not Allowed to Tell You What RH's (NYSE:RH) CEO Thinks of the Recent Share Price Plunge
Just recently, upscale furniture retailer RH (RH) put out its earnings report. And as is commonly the case, the CEO, Gary Friedman, was on an earnings conference call providing visibility to analysts. But Friedman provided way, way too much visibility with his shockingly visceral reaction to the share price plummet that followed the announcement of earnings. It was sufficiently visceral, in fact, that it was unprintable. And shares are in free-fall to this moment, with shares currently down over 41% in Thursday afternoon's trading.
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This earnings report came out right about the same time that President Trump was unveiling the 'Liberation Day' tariff plans, and you can about imagine what that meant for RH. But the extent of the damage proved a shock to Friedman, during the call itself, when he delivered a four-letter word for 'barnyard leavings,' and noted that RH's own 10-K report makes it clear that it is about to walk into a tariff nightmare.
Thus, the combination of an already-poor earnings report, consolidated by the fact that RH is an upscale furniture operation in an uncertain economy, followed up by tariffs that would hit much of what RH sells like a bus dropped off a building would ultimately prompt the four-letter epithet from Friedman during the earnings call. Reports note that, if current trading trends hold through Thursday's session, this would be the worst day in RH's entire history of being publicly-traded, which now goes back about 13 years.
Going Down Swinging
But RH will not be taking this lightly. In fact, reports note that RH will be opening a new store this week, part of a former Target (TGT) store. The RH Outlet store will be opening in Commack, on Long Island. That is not all, either, as RH also plans to open a full-price version, an RH Gallery, in Manhasset later on.
The RH Outlet store is an 'off-price' option, which offers '…the opportunity to bring home overstock, past-season, or slightly imperfect pieces at significantly reduced prices.' Which will likely be helpful, because with economic uncertainty ruling the roost right now, 'significantly reduced prices' are likely on the top of wish lists for a lot of shoppers out there.
Is RH Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on RH stock based on 10 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 48.31% loss in its share price over the past year, the average RH price target of $426.75 per share implies 187.72% upside potential.
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