The luxury home goods retailer $RH (-3,52 %) is currently recommended by The Motley Fool analyst Jeremy Bowman as a stock worth considering for patient, long-term investors. Despite facing significant challenges that caused its share price to drop steeply—down 54% year-to-date and about 76% from its peak in 2021—the company is showing signs of potential turnaround. At market close on October 20, 2025, RH shares were priced at $179.68, reflecting a slight decline of 0.5% in early October 21 trading.
The post-pandemic period has been tough for RH, as it operates in the discretionary luxury segment where consumer spending is sensitive to economic cycles. The slowing U.S. housing market and inflationary pressures have negatively affected demand for high-end furniture. Moreover, the import tariffs imposed by President Donald Trump continue to pose cost challenges, with RH’s stock falling 28% since the higher tariff proposals were announced in early April 2025. The U.S. labor market’s recent contraction also adds downward pressure on consumer spending, heightening uncertainty for RH’s near-term outlook https://www.themotleyfool.com .
Despite these headwinds, RH’s financial results suggest resilience and growth potential. In Q2 2025, ending August 2, RH reported an 8.4% increase in net revenues to $899.2 million, alongside a striking 79% rise in net income to $51.7 million. This growth is attributed to the company’s product line refresh and European expansion efforts, including the opening of RH Paris—the Champs Élysées location quickly surpassed the combined early performance of other European galleries and even outpaced traffic to their flagship New York store. RH England is also projecting strong demand in its second full fiscal year https://www.nasdaq.com/articles/rh-reports-8-revenue-growth .
Importantly, RH has been proactive in mitigating tariff impacts by shifting nearly all production out of China, with plans to move production from India as well. This strategic realignment aims to reduce dependency on countries affected by U.S. trade policies and to improve supply chain robustness. Further broadening its revenue streams, RH is experimenting with diverse ventures such as opening restaurants, luxury inns, leasing private jets and yachts, and purchasing, furnishing, and selling turnkey homes. While these new business lines carry inherent risks, they offer exciting avenues for growth beyond traditional luxury furnishings https://www.themotleyfool.com .
Bowman acknowledges that challenges remain—tariffs, slower housing markets, and a possible further decline in consumer spending could dampen near-term performance. However, the company’s strong underlying financials and diversified growth initiatives provide a solid foundation for a rebound if macroeconomic conditions improve. This balanced view resonates with Wall Street analysts, where the consensus is mixed but bullish overall: 10 analysts rate the stock as a hold, 9 recommend buying (including six Buy and three Overweight ratings), and 3 suggest selling. The average price target of $251 implies an upside of nearly 40% from the recent closing price, suggesting confidence in RH's longer-term potential https://www.marketwatch.com .
In summary, RH presents an intriguing opportunity for investors who can tolerate short-term volatility in exchange for exposure to a premium luxury brand poised for growth through geographic expansion and product diversification. While current risks are real and stock performance has been disappointing compared to its historic highs, the company’s strategic moves to navigate tariffs and economic headwinds position it well for a possible recovery. Patient investors with a multi-year horizon may find RH’s mix of traditional strength and innovative business expansion compelling in their portfolios.
