The CEO of a home furnishings company was in the midst of his firm’s quarterly earnings call on Wednesday when President Donald Trump’s tariff plans were revealed, leaving the executive caught off guard as he reacted in real time to the company’s stock taking a hit.
RH CEO Gary Friedman was discussing how the luxury furnishings company, which was previously known as Restoration Hardware, reported earnings that fell below the expectations of analysts when he was alerted that the company’s stock was down 25%.
“Oh, really? Oh, s—. OK,” Friedman said. “I just looked at the screen. I hadn’t looked at it. It got hit when I think the tariffs came out. And everybody can see in our 10-K where we’re sourcing from, so it’s not a secret, and we’re not trying to disguise it by putting everything in an Asia bucket.”
RH’s regulatory filing with the Securities and Exchange Commission (SEC) shows that the company sources the vast majority of its products from countries in Asia, which will now be subject to higher tariffs.
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According to the 10-K, RH sources 72% of its products from Asia, including 35% from Vietnam and 23% from China, while the remainder of the Asia subset is sourced from Indonesia and India.
It also sources 18% of its products from North America, including 10% from the U.S., while the remaining 10% is primarily from Europe and other countries.
RH’s filing notes that it operates a manufacturing facility in North Carolina, where the company makes some of its upholstery products.
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Friedman went on to say that while he thinks some of the tariffs will be lifted through negotiations with U.S. trading partners, they would be a good thing over the long term.
“Leverage is how you win negotiations, not bluffing. My view is, I don’t think these tariffs are going to completely stick. I think if you’re these other countries, you’re going to start playing the few cards you have,” he said. Friedman added that tariffs would be a “really good thing long-term.”
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RH’s stock slide continued on Thursday, ending the trading session down 40%.