RH Stock Surges as Tariff Pressures Ease Into 2027

What Triggered the Rally?

Luxury furniture retailer RH (NYSE: RH) experienced a strong opening to 2026, with shares climbing 9.6% in early trading. The gains came after the Trump Administration announced a one-year postponement of previously planned tariff escalations on furniture imports. What had been scheduled to take effect on January 1—including increases to 30% on upholstered furniture and 50% on cabinets and vanities—will now be pushed back to 2027.

This reprieve provided meaningful relief to the beleaguered furniture sector, which had been bracing for a significantly more aggressive trade environment. For RH in particular, the delay removes an immediate threat to already-strained operations.

The Tariff Saga and Its Impact on RH

The current tariff framework has created substantial operational challenges for RH and its competitors. When the Trump Administration initially introduced a 25% levy on imported upholstered furniture, kitchen cabinets, and vanities back in September, it marked another headwind for an industry already struggling with multiple pressures.

CEO Gary Friedman highlighted the severity during recent company discussions, noting that tariffs have “disrupted supply chains and driven higher prices.” The company documented 16 separate tariff announcements over a 10-month stretch, resulting in product delays, inventory shortages, and repeated rounds of price renegotiations. Management subsequently reduced its annual operating margin guidance by 90 basis points to account for tariff-related impacts.

Friedman emphasized that while policymakers aimed to revitalize North Carolina’s furniture manufacturing base, the tariff regime posed existential risks to smaller operators in the space. The delay announcement suggests the Administration responded to industry feedback regarding these unintended consequences.

Why RH Faces a Longer Road to Recovery

While today’s rally signals optimism, RH’s broader challenges extend well beyond trade policy. The company’s stock has deteriorated 76% from pandemic-era peaks, reflecting multiple years of industry-wide headwinds.

The residential real estate market contraction that followed the pandemic severely impacted demand for RH’s premium furnishings, as consumers pulled back on discretionary home purchases and renovations. Compounding this weakness, RH management authorized aggressive share buybacks over the past two years—a strategy that now appears poorly timed given the company’s continued operational challenges. These repurchases consumed capital that might have been deployed elsewhere or preserved as a financial buffer.

The tariff regime added another layer of complexity to an already difficult operating environment, though the postponement provides a window for the housing market to stabilize and for management to recalibrate strategy.

The Turnaround Question

The substantial stock decline has created theoretical appeal for value investors and turnaround specialists. RH could deliver significant upside if three conditions align: the housing market shows genuine recovery signals, management demonstrates disciplined capital deployment, and trade policy stabilizes. Today’s tariff delay represents progress on the third front, though it hardly guarantees the other two will materialize.

The 9.6% single-day move reflects market recognition that one major risk has been mitigated, not eliminated. Whether this represents a sustainable inflection point or a temporary reprieve remains an open question for investors evaluating the stock’s prospects.