03:23 PM EDT, 09/15/2025 (MT Newswires) -- RH's (RH) profitability will likely come under pressure over the coming quarters amid challenges related to tariffs, Oppenheimer said in a client note e-mailed Monday.

The brokerage lowered its fiscal 2025 and 2026 earnings-per-share estimates for the home furnishing retailer after scrutinizing trends and having discussions with its senior management.

Last week, RH lowered its full-year revenue growth outlook amid persistent tariff-related uncertainties, while its fiscal second-quarter results came in below market expectations.

"Overall, while we are encouraged somewhat by clearer indications of stabilizing, if not improving demand trends at RH, we are turning increasingly concerned that now significantly elevated tariffs could interrupt top- and bottom-line momentum at the chain over coming quarters," Oppenheimer analysts, including Brian Nagel, said in the note.

The brokerage is now projecting EPS of $8.48 for fiscal 2025 and $12 for fiscal 2026, compared with its previous estimates of $10.39 and $13.15, respectively. Consensus forecasts indicate $9.03 and $14.31, respectively.

Oppenheimer said the 2025 forecast is based on a reduced operating margin estimate.

RH is "aggressively responding" to the recently imposed tariffs of 50% on India, which impact 7% of its business, "almost entirely hand knotted rugs," Chief Executive Gary Friedman said in a shareholder letter last week.

"Debt service coverage remains a risk for RH, particularly against a more precarious sector backdrop," Nagel wrote. "We advise clients seeking opportunity within home furnishings to focus on shares of outperform-rated Wayfair ( W ) ."

Oppenheimer has a perform rating on RH shares.

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