The take: Elevated interest rates and prices and lackluster consumer confidence have left the housing market in rough shape.

• Housing prices in July rose 1.2% YoY, while sales fell 1.3% in July, per Redfin.
• The long-lasting challenges make the current environment the third worst market RH CEO Gary Friedman has seen in his 38 years in the industry, he said during the company’s earnings call.

The challenging landscape is forcing furniture retailers to offer discounts. “Furniture is an industry that, at the highest level, does not sell at full price,” he said. He added that retailers that want to be “righteous” and say, “I’m not promoting,” are unlikely to survive in this market.

The other big challenge: Tariff uncertainty is weighing on furniture retailers, especially after President Donald Trump threatened in late August to impose new levies on imported furniture to boost US production.

• “God forbid they throw another tariff on furniture,” Friedman said. “Someone has got to come talk to us. Talk to me. Call me. I run the biggest luxury home brand in the world.”
• RH has tried to reduce risk by shifting sourcing away from China and ramping up upholstered furniture output at its North Carolina factory, but tariffs are still expected to shave $30 million off its forecast. That’s notable since the company reaffirmed its full-year guidance just three months ago.
• The ripple effects are also real. RH delayed its Fall Interiors Sourcebook by eight weeks while waiting on tariff decisions, pushing deliveries far behind schedule. Last year, all of its Sourcebooks were out by the first week of August; this year, only 28% had shipped by early September. That delay is expected to shift about $40 million in revenues from Q3 into Q4 and Q1 2026.

Our take: RH is holding up better than most home retailers, but it’s not immune. The company trimmed its revenue growth forecast range to 9% to 11%, down from 10% to 13%, and it doesn’t expect headwinds to ease anytime soon. Furniture sellers with less sourcing flexibility could take a harder hit.

Go further: Read our Retail & Ecommerce Earnings Q2 2025 report, which explores how housing-related retailers are navigating the slowdown.