RH (NYSE:RH) stock rose 11.55% (As on June 13, 11:22:54 AM UTC-4, Source: Google Finance) after the company stuck by its sales forecast and said it is taking steps to offset higher costs from tariffs. RH reported net income in the fiscal first quarter of $8.04 million, or 40 cents per share, compared with a loss of $3.63 million, or 20 cents per share, in the year-ago period. RH is maintaining a disciplined capital allocation strategy. It plans to monetize $500 million in real estate equity and reduce inventory by up to $300 million, helping fund international rollout and mitigate elevated debt levels, which currently stand at a net $2.56 billion.

Meanwhile, the company has laid out some steps that it is taking to blunt the impact of tariffs. The luxury retailer is moving more production out of China and expects its receipts from the country to drop from 16% in the first quarter to 2% in the fourth quarter. The company expects 52% of its upholstered furniture to be produced in the United States and 21% to be made in Italy by the end of this fiscal year. The luxury retailer will now delay the launch of a new concept until spring 2026, when it hopes to have more certainty about tariffs. It had previously planned the launch for the second half of this year. RH has pressed ahead with plans to open stores in other countries, including one of the most exclusive retail addresses: Paris’ Champs Élysées. It plans to open the RH Paris store in early September.

RH in the first quarter of FY25 has reported the adjusted earnings per share of 13 cents, beating the analysts’ estimates for the adjusted loss per share of 9 cents, according to a survey of analysts by LSEG. The company had reported the adjusted revenue growth of 12 percent to $814 million in the first quarter of FY25, missing the analysts’ estimates for revenue of $818 million. Adjusted operating margin reached 7% and adjusted EBITDA margin was 13.1%. Free cash flow was $34 million for the quarter. Inventory sequentially declined from $1.20 billion to $1.08 billion, a reduction of $12 million.

The luxury furniture retailer said it expects full-year revenue to grow by 10% to 13%, adjusted operating margin of 14% to 15%, adjusted EBITDA margin of 20% to 21%, and free cash flow of $250 million to $350 million.

Second quarter 2025 guidance includes revenue growth of 8% to 10%, adjusted operating margin of 15% to 16%, and adjusted EBITDA margin of 20.5% to 21.5%.