Shares of luxury furniture retailer RH (formerly Restoration Hardware) surged 18.30% in pre-market trading on Friday, following the release of its first-quarter fiscal 2025 results that exceeded expectations and demonstrated resilience in the face of ongoing tariff challenges.

RH reported a surprise adjusted profit of $0.13 per share for the quarter, significantly beating analysts' expectations of a $0.09 per share loss. This marks a substantial improvement from the $0.40 per share loss reported in the same period last year. Revenue rose 12% year-over-year to $814 million, slightly below the consensus estimate of $818.12 million but still impressive given the current economic environment.

Despite ongoing uncertainties related to tariffs and a challenging housing market, RH maintained its fiscal year 2025 revenue growth guidance of 10% to 13%. The company also provided Q2 revenue growth guidance of 8% to 10%, demonstrating confidence in its near-term prospects. CEO Gary Friedman noted that the company is performing "at a level most would expect in a robust housing market," despite operating in what he called the "worst housing market in almost 50 years." To mitigate tariff impacts, RH is actively shifting its sourcing away from China, projecting that only 2% of its receipts will come from China by Q4, down from 16% in Q1. Additionally, the company expects 52% of its upholstered furniture to be produced in the United States by the end of fiscal 2025, with another 21% produced in Italy, further insulating it from potential trade disruptions.