MILAN — RH shares are still recovering from the “Liberation Day” duties announced by President Donald Trump on April 2. Since then, the firm has shifted sourcing out of China and rerouted a significant portion of its upholstered furniture to its own North Carolina factory, RH chief executive officer Gary Friedman said Thursday, as the company released its first-quarter results.

The Corte Madera, Calif.-based RH firm formerly known as Restoration Hardware posted a net profit of $8.04 million, or 43 cents a share in the three month fiscal period ended May 3. That compares to a loss of $3.63 million or 20 cents a share in the same period a year earlier. Shares rallied 19 percent in late trade on the news. In April, President Trump’s trade policy announcement drove RH’s shares to their lowest level in almost five years.

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Revenues fell slightly short of analyst expectations, as well as the revenue target RH issued in April. Sales rose 12 percent to $814 million in the fiscal three-month period ended May 3. This compares to RH’s guidance of a 12.5 percent to 13.5 percent rise. A Factset poll of analysts forecasted sales of $818.6 million.

In the same period, RH posted an operating margin of 6.9 percent and adjusted earnings before interest, taxes, depreciation and amortization or EBITDA margin of 13.1 percent.

“While there remains uncertainty until the reciprocal tariff negotiations are complete, we have proven we are well positioned to compete favorably in any market conditions,” Friedman continued, adding that the firm sees disruption negatively impacting its revenues by approximately 6 points in the second quarter and will recover in the second half. Friedman said the company is sticking to its full-year fiscal guidance.

Offsetting Market Headwinds

Despite a challenging housing market, the worst in 50 years, RH forecasted revenue growth of 10 to 13 percent in fiscal 2025, an adjusted operating margin of 14 to 15 percent and an adjusted EBITDA margin of 20 to 21 percent. Friedman also said the company is working on a long-term sourcing strategy to diversify production.

In fiscal 2024, the company sought to offset macro headwinds by investing $2.2 billion into stock repurchases and expanding its portfolio with real estate assets totaling an estimated equity value of approximately $500 million. “We plan to monetize opportunistically as market conditions warrant,” he said. With regard to excess inventory worth $200 to $300 million, the company plans to turn it into cash over the next 12 to 18 months.