What You Should Watch With RH Stock in 2026

RH (NYSE: RH), the high-end home furnishings company formerly known as Restoration Hardware, is no stranger to volatility.

The stock has been through several boom-and-bust cycles over the last decade, most recently struggling in the post-pandemic era as the housing market has slowed to a 30-year low, dealing a blow to much of the home improvement sector. Additionally, tariffs have been another thorn in RH's side, and as a result, the stock has had a forgettable 2025 as optimism at the end of 2024 around lower interest rates and a housing market rebound has given way to a less favorable reality.

As the chart below shows, the stock is down nearly 60% this year, with essentially all of those losses coming in the first quarter, partly in response to higher tariffs than expected under President Donald Trump.

RH data by YCharts

Despite the disappointing stock performance, RH has actually delivered solid growth so far this year with revenue up 8.4% in the second quarter, and profitability has spiked as the company controlled overhead costs while doing it.

So what's in store for RH in 2026? Let's take a look at a few key factors to watch.

Image source: RH.

All eyes on the housing market

RH has managed to deliver growth in spite of a weak housing market, but there's no question that the slowdown has weighed on the business. In fact, CEO Gary Friedman, who's never afraid to share his opinion, has been outspoken on a number of occasions, reminding investors that the company is operating in "the worst housing market in almost 50 years."

No one knows where the housing market will go in 2026, though the lack of rebound thus far seems to be telling, especially as consumers are struggling, inflation remains elevated, and home prices are out of reach for many younger buyers. However, interest rates are expected to come down in December and could fall further in 2026, which would likely bring down mortgage rates.

Still, at this point, it seems risky to bet on a housing recovery in the near term.

European expansion

The biggest initiative happening inside the company right now is its push into Europe. RH has opened several galleries across the pond and has more openings planned for 2026. Additionally, it expects sales at recently opened galleries, including RH Paris, which opened its doors on Sept. 5, to ramp up next year.

Among the openings planned for 2026 are marquee markets like London and Milan, and the company expects its push into Europe and the Middle East to double the size of the business in the next five to seven years.

Other factors to watch next year include tariffs, which continue to fluctuate, though the company has made significant strides in reducing its exposure to China.

After RH's sell-off in 2025, the stock is arguably undervalued. If the company can deliver and the macroeconomic environment cooperates, the stock could see a robust recovery in 2026.

Jeremy Bowman has positions in RH. The Motley Fool recommends RH. The Motley Fool has a disclosure policy.