Formerly known as Restoration Hardware, high-end furniture retailer RH (NYSE: RH) has been embarking on a major brand transformation and expansion over the past few years. That earned it a booming stock price during the pandemic housing boom.

However, the interest-rate shock that followed the pandemic has flipped the script. In 2023, sales and profits are on the decline, even as the company spends big to expand its brand. Even Warren Buffett's Berkshire Hathaway, which had bought RH stock back in 2019 and increased its holdings through early 2022, sold its entire stake in the first quarter of this year.

But that didn't stop RH CEO Gary Friedman and his team from zigging when others were zagging. Management decided to spend most of its cash on a massive share repurchase in the second quarter. Was this a genius move or one that put the company in danger?

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Source Fool.com