MW RH's stock plunge shows even the ultrarich are worried about spending on their homes

By Tomi Kilgore

The Iran conflict likely hurt sales to certain customers in Europe with ties to the Middle East, UBS says

RH's stock plunges, as even the ultra rich will curtail spending during times of geopolitical stress.

Shares of RH plummeted toward a six-year low Wednesday, after the high-end furniture retailer's latest earnings report and outlook suggested that even the super-rich have cut back spending on their homes.

In video presentation late Tuesday, CEO Gary Friedman highlighted tariffs, global discord from war and "the most dire housing market in decades" as creating an environment of heightened uncertainty. And although the sales outlook for the current quarter was disappointing, as the launch of the new RH Estates initiative was delayed, Friedman tried to reassure investors that sales growth would start accelerating.

Still, the stock $(RH)$ plunged 23% in recent afternoon trading to put it on track for the lowest close since April 2020, during the height of the COVID panic. That follows a 15.6% drop in March amid worries about the how the Iran conflict could hurt sales.

UBS analyst Michael Lasser said RH's results and outlook indicate that RH's core customer has not only been "distracted" by, but could also be "more sensitive" to, recent geopolitical developments.

"Notably, [RH] has certain customers in large European cities with ties to the Middle East, which likely saw the most acute impact," Lasser wrote in a note to clients.

The stock is on track to suffer its biggest one-day drop since it plummeted a record 40.1% on April 3, 2025, when investors reacted to concerns over the impact of sweeping tariffs announced by the Trump administration.

Basically, what those historic stock selloffs show is that not even the ultrarich consumer with a net worth above $20 million - Friedman indicated that was RH's target customer - is immune to tariffs and the Iran war.

Late Tuesday, RH said sales for the fiscal first quarter, which runs through April, are expected to decline 2% to 4% from a year ago, while the average analyst sales estimate compiled by FactSet of $817.3 million implies an increase of 0.4%.

For the fiscal fourth quarter through Jan. 28, revenue rose 3.7% to $842.6 million, which missed the FactSet analyst consensus of $842.6 million.

Adjusted earnings per share for the latest quarter slipped to $1.53 from $1.58, while analysts were modeling for a jump to $2.20.

The company explained that profitability was hurt because the launch of RH Estates, tailored to a more customizable offering, has been delayed to the second quarter, which comes with "significant" advertising and launch costs. The original plan was for it to launch in the third and fourth quarter of last year.

Meanwhile, CEO Friedman looked to paint a brighter outlook with the launch.

He said full-year sales growth is expected to be 4% to 8% in fiscal 2026, then accelerate to 10% to 12% in fiscal 2027.

A key reason for his optimism is that the company's "ultrahigh-net-worth" target customer owns on average 3.7 homes, while billionaires own 10 homes on average. Ultrahigh-net-worth consumers also tend to spend 6.4 times more on home furnishings than consumers with a single primary residence.

That hasn't provided much comfort for investors, as RH's stock has tumbled 54.9% over the past 12 months, while the State Street SPDR S&P Retail ETF XRT has rallied 15.8% and the S&P 500 SPX has advanced 17.3%.

-Tomi Kilgore

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April 01, 2026 13:36 ET (17:36 GMT)

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