Telsey downgrades RH on reduced revenue, profit outlook

Telsey Advisory downgraded RH (RH) to Market Perform from Outperform with a price target of $220, down from $255, following last night’s earnings report. The firm cites the company’s reduced revenue and profit outlook, due to a delay in a Sourcebook mailing and higher costs as a result of recently enacted tariffs, for the downgrade. Telsey remains positive on RH’s product transformation, and revenue contribution from international stores, but is concerned about the impact on profitability from tariffs and its ongoing spending to scale the international business.