RH (RH) 9 Sep 212021 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the RH Second Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Ms. Allison Malkin. Ma’am, please go ahead.

you. Thank everyone. afternoon, Good joining call. our for XXXX quarter earnings conference us you second for fiscal Thank

today Gary me Jack Joining are Preston, Officer Chief Chief and Executive Financial Officer. Friedman, Chairman and

you and I number statements to a risks outlook like matters to as we These start, filings today our about make forward-looking issued today meaning the within that statements referenced other of are cause and certain legal securities of we Before the will as to for remind federal release press today. could involve in uncertainties disclaimer issued differ of would release statements materially. that forward-looking our the well of actual business that results press our Please our refer our laws, including the description date factors our and statements this forward-looking affect statements a the that that information also in the the reflect results may we adjust Please eliminate to publicly GAAP non-GAAP no more to during risk of certain Also, of financial light these call, may of discuss this note as detailed our forward-looking results future events. revise new results. our or obligation measures, or to release of which these revision impact items. undertake call of any we opinions only SEC of

to With press will today’s is Investor results website measures the reconciliation call ir.rh.com. that, of a on financial the non-GAAP A these of and over find GAAP turn of will Relations financial You to measures information I our available call regarding in these additional live at Gary. also non-GAAP section this release. broadcast

to To to million start another results generated then stock to of everyone and thank million those earnings set million increase X.X% for from increasing million benefited in a versus the quarter the exercised furnishings due low quarter in XX.X% call we sector increase XX% year XXX% of XX% report going net I second nearly share Xx second last the rate $X.XX, in EBITDA the quarter million $X.XX been second in of and our an quarter have per increase earnings would We versus to of our million $XXX adjusted year’s $X.XX increased tax XX.X% in average flow. quarter an rate ago comparable $XXX diluted unusually of adjusted per tax an and share diluted stock year, of year. adjusted free versus the If ago. and XXXX. $X.XX to of income in reached up Adjusted a net adjusted year operating us with cash in income year was XX% to $XX to net second last price. This a reflect of adjusted our the open versus options to increased the in letter versus standard We performance $XXX we to quarter $XXX and people, Thank last partners questions. the industry margin of compared of new compared home shareholders, results generated year. a shareholder XXXX. to RH $XXX operating adjusted the are am and now XX.X% our our and the luxury income for revenues continues joining Great. adjusted pleased Allison as with up financial today. $XXX quarter million quarter, of ago, will XX% you you, to record the

for total million a RH. debt new XX quarter ended of milestone $X and adjusted second net with trailing of EBITDA The months billion, $XXX

outlook our business a the million in-transit Raising year – XX% outlook, XXXX ago. of inventory balance on of increased million, the While a to XX.X% our year to power to revenue expect of increased year was hand XX.X%. XX% our to again on in the XX% inventory outlook and XX.X% XX% growth inventory to our we versus last model, XX% based operating on sheet of once range prior $XXX compared prior up to of and margin operating our fiscal to $XXX ago XX% the for $XXX XX.X% versus million, to continued strength XXXX. outlook of now as We of raising are XX% fiscal adjusted

are We of versus to outlook ROIC raising prior also year our for outlook our XX% the XX%.

comparisons the ago sustainable and has well amplified furniture the to the challenges trend that been larger is is from of the strong resulting point data record rates, Our of analyzing change spread An long that, long-term quarter trends a demand home. a third continued consumer a of the housing several and and cycling We to and homes. the migration build and the This support supply most argument continued is parts the when the the and during interest believe on a substantial demand. consumers on important furnishings increased Add could to accelerated in second in to market current market basis the have low step by suburban tail. square footage that of has home the stock historically demand very the more variant. momentum have spending X-year consider large year and economy driving on growth of despite reopening in a the chain Delta growth spending difficult elevated

unveiling been to us record planning cycle are lead designed which opening and The product Gallery of and revolutionary hospitality RH fashion; shaping is our of XXXX; history, for the largest RH Sir luxury architect, England, the in of travelers New factors RH in a and unforgettable a to magical market; of Modern the RH and introduce ecosystem XX-acre products, the spring the Books, thought have a launch hotel as a Contemporary latest be highlighted Aynhoe at our as $XXX the RH to places, year the and the our spring designed Park, communicate believe World authority privacy brand the historic RH the Guesthouse presenting for several up estate we leader, English integrated Soane the our of of first in elevate by portal place XXXX, fiscal dramatic services new seeking the that of plus spaces, RH American John to the legendary Interiors exciting a XXXX concept in in taste most billion launch North not mailed new in all UK the of brand and since XXXX will our we by Source maker. RH, the forward, digital York; on Looking

of This began shutdowns the recently the full As closures July factory in it relates and with Delta challenges, chain ordered expanded shutdown facilities by rapid of the supply early variant. partial spread the government to manufacturing Vietnamese a July. due ongoing to late to

Vietnam with in the production currently expecting ramping end capacity the year. by are restart full manufacturing to We in of October to

the suppliers with materials Additionally, increases continues longer raw and seeing globally in including costs. transportation to sourcing are and continue experience number higher of product of we a also categories. price a transit Shipping our times majority challenges, headwind be to

As spring are trends of supply of and our accelerating demand a until we result of XXXX. compounding delaying Contemporary launch chain RH the challenges,

the new meet core to quality supply production to books of pushing reducing the are backlog products, we of on manufacturing mailing Additionally, our our on focus to Based while elevated standards. collections fall source partners and on ramping the enable winter, out refining similar the decision City hospitality guesthouse industry XXXX. first New of delay – variant York guesthouse we have our first New the of will uncertainty how chain Delta in spring the of made to challenges this our opening York and until impact

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market billion to $X to billion design globally. and in the plan immersive open of assortment America $XX $XX billion North galleries major unlock value will in of every Our $X revenues our generating to billion VAS

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four Our expand walls to RH hospitality for billion privacy new brand to into and will create travelers continue American is $XXX market as the goal North of the galleries the our hotel Guesthouses, seeking RH we efforts a in elevate luxury where our industry. beyond

charter of and multiple like design available and immersive long-term Caribbean new and RHX, building This leads our first and the Additionally, design yacht interior brand RHX RH of landscape and and by and architecture, visit the amplifying These Mediterranean, and an wine, authority business Yountville, architecture. core services integration Napa and for are the disrupting interior and existing food, bespoke world’s customers we jets; the while is our redefining inside affluent landscape creating our the Valley; revenue in and streams, private platform galleries, new architecture architecture, to consumer-facing experiences art expose experiences evolving in and luxury our design to strategy that elevating RH RHX, industries. our where wealth our vacation. adding

the Our condominiums time-starved trillion $XXX begin furnished spaces, services luxury apartments circle consumers. RH conceptualize integrated the time American discerning the in $X.X strategy to housing North Residences, deliver and market sell we furnishings fully to value homes, home full with moving as comes taste billion launch to market into with of and beyond

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way RH today. an players, the life global to to A are greatest are The and most will are Officer, any creative plan Values every driven, people and create who who answer, our with is more X% our that with people DeMonty trillion, point others, rather who are people right can in people $XXX the the He we what’s people that the who Operating, brand are At asset by values versus our see billion reminds XX than smart, answer, and high XX that the DP answer your concerned so, valuable view, asset. our value Chief We opportunity inclusive. valuable. are take of $XX we of the point answer. than the right not to an ability addressed become expand Our call ecosystem to call I energy, have $XX problem taking view, RH, as Thank point, our continue are to the for of won’t the you and would those everyday. for a the more is who to for Carpe them. than your bring vision each who concerned people thank and right doing people above. often to the world every a one we We and greatest rather Operator? Price, energy are being who asset. and the opportunity. admired open makes no At out of right of wrong value and positioned right market $X trillion multiplies in people who taste of largest represents believe share says, more brands in as greatest Service one determined see the in team XXs who our also what’s right billion by no reflection the questions. people globally, market greatest an value one people of have better want of tenets I the for and with the believe elevating of no quest our to Taste ecosystem the The our people people deeply a to liability. And world. life to energize be us most problem all right is Diem. right rendering this RH elusive and for right.

question of comes the Thank Guggenheim. you. first [Operator from line from Instructions] Your Steven Forbes

Your line is open.

rates. Jack, retail. Curious cancellation to trying as of the we in this afternoon, without on launch, seeing new the guidance the half high given towards combination engagement as of a discuss well conversion Gary, rising And rising you potentially is trends if is could back changes a just supply customer stimulating what’s year right, product to yet driving here look chain cost level idea level conviction comfort again as Good just your demand? gain customer this whether driving raise which any more at I having, pressures, Gary, or Allison. challenges, are believe you

with quarter. start we the that I’d Steve, into Well, fact have the insights Yes.

well quarter We month are month the quarter demand over of the in and accelerating into already. today kind relatively have third we

can So we have. stand we going business business to have add a – and here. not think that newness see going back and replace the just very we large – very is to It’s to about large

experienced. is of stocks underlying highest of ever a highest and back through very healthy. business that the went period We orders out So, our we

guidance at everything normally of delaying ski inventory better. a view what Modern, X of years And just, I we newness to missed everything membership last would know Our best or in I levels the we launch moved if X supply delaying The of Contemporary, and all in And we mail. starting quarter reconceptualized though into RH once house, even we that Rugs, look think you chain I think RH we beach see. are are is are the XXXX, go Interiors, to since don’t would X RH our the years. history have don’t of get RH, else, house, again kind else we the

or know would pattern much how conviction need. more don’t I So, recognition you

was No, quick the that’s just a there follow-up, to about broader first as the commentary And think helpful. then back letter, pipeline. I international quarter

it negotiations. you was Any come final has you. would that signed, were leases Any helpful? provide on think I how together? in can pipeline X update update be X Thank

now, new conversations. – really an have a we talked it letter. It’s kind has nothing and negotiate difficult coordinate kind of international Yes, nothing and little travel business the would about to in right or of and But so the changed. meetings

– have with. that I of kind deals we think are we still we X moving forward

We X. have multiple deals,

to are We are looking at at to more. The pipeline as far as is opportunities that continue looking we grow. going

very, you walk a and unique As you know, galleries our need. that are and not find we very to a somewhere building street could just

going brand. the but that So are we be – are confident to we to scale able

rooftops floors of one can multiple and and so are a of forth. that people gardens We and and any Europe business only kind specialty in on sell the with up multiple can levels so use that

one priority tied hands is strains to world with letter. international drastically and of are expansion our something a number product the our virus, to on that out unless have tied feel our the put the the less going – but changes expansion, the product. in of else and deliver very this or in everything in just we confident that on we are right brand now that So the we new bit And focus the but the launch company

really was this variant new confident don’t anything changes, best about and much a when this. we talked is or our was thinking of there happening think we I something So, yet. today last, that are If Delta

vacation to all and away work that masks on interesting, threw it new needed buy and July while my off. masks. back like in masks and went I came to are So, wasn’t but – And

world So, think build And learn improvise, all our is team you here of whole got at have proud quickly I overcome new a and and the to far. we changing new thus but am for extremely I to adapt the execution muscles. level,

that August when business. XX, ago, to never comp have our There going where comfortably a on a I sellers August, comp a mirror around not and think were we a core the our oh, business right, right. core asked me as come be to And was I wouldn’t business on going They customer starting best have have flow better If fact thought Were really our have guys, and I have you to we that is not in things of peak about that. have that that month and going I were September in said it impulse and would running not confident about weeks XX is mean year the couple big an I our we home. in-stocks our focus are in flow we way. it’s of to that. are that? one, goods our no go, bit. in of walk and is would business. Based is by the you the first looked business, really if rearview new. the get And They seen think should anything is coming, we never the but good in that. drive you business. The seen furnishing you It’s impulse expectation, on the

are weeks with time to with the designers, is are are planning our and you you consumer do You shopping, working months an it, order.

– in there of cheap I I will in, multiple right easier period. comes like goods, say just right. we now, lot is selling a if kind of and ramp newness cheap goods back stand would the kind market – if bring in say the even would were So, a month But what to

business. home We world in goods the quality highest the selling scale are the in at

of and are the trying goods. the quality we – So elevate to

a and design. quality round goods of is next level whole the of So, another

rush quality. don’t You

it. for it. pay And You for people guess wait what,

thinks pandemic a And terrible on a measure in there so in that are people feel if they right us and Vietnam where to want there. lot And someone what’s for sick going now. I like of is dying

You their that their work. have families – people on to feed lives it they and depended can’t

going here. we to So be okay are

is Our business ripping.

not X-year accelerating. like are third X-year that in maybe because I have the else XX% is quarters our – the think is growth, many. to mean fourth report going anybody growth business we has we have So, to don’t and somebody going I

building. So demand – what’s picture and important but is important. just the on And is what’s big I’d really focus really our

in have We business the some best had of industry. the

We are taking market share.

are in And you dying is help people to this and right decisions, pandemic. got not today. have expanding the their out I the there for prioritize the have margins sick long-term, very beginning of do from told the the it’s like world them We and what’s operating make right team lives, –

We going are chase to not here. every sale

lucky. are We

a world years almost has now sick for We Most are and world. dying have in People of had this the headwind. a X tailwind. had

Our business We great. is blessed. doing feel

you. Thank

Thank you.

Our the next from Lasser of UBS. comes question from Michael line

open. is line Your

Thanks evening. Are being for place, this these few from linear? lot margin you You your are year shift to delayed to have initiatives to my costs going next a from of and perspective a over some all path taking years be Good some to Gary. year. the next year in them sales from planning year, question, that’s for a this mean next

next we over build few sales should after modeling and your that continuing be years the year? year to So, business margin

someone are ask say – of of gosh, well, Michael, guidance would like you Yes. me, couple are money. I giving we will the detailed not years. it’s next kind over saving

catalog. money. mailing are get and you lose we not So, catalog are mail to catalog don’t Well, to up we mail your our earnings don’t your our because zero and

are getting So catalog, not we not our we revenues. so Yes. mailing are

can period new drive business revenues new make So going a Where course, about am like things any. like past – and have to have to waste there investments things are have we ramp. country, Europe drive – don’t if I sorry, to we see, like of data. Europe, experiences let open things think have when as we a that initial let that. in you I lot launch to joke mean time to we website. got what What investments, thinking got that, me look of at some you I in with I do does Oh, we to about, that consumer is look don’t just are some me where great some But in I a great infrastructure got we make open a launch invest have and have got we profit.

intelligent We to real launch with have got marketing.

got We year $XX execute first be is to prepared to $XXX million the have million. or whether

this in You know, little $XXX million for I California, tell a million galleries stand is California like, relatively business is million slightly us, let’s is in an more I people. me would design There the people XX be, If hey, bit had back There second. think more. don’t demographic, wealthier new about similar and UK. a exciting California. in in maybe for but people There California, XX

say, would we expand like I a So when brand to continue billion the $X California, looks business.

UK the $X billion call Let’s business.

admire for XXX% XX%, cases us almost customer we know of They interior key UK pyramid. people end have some in of of there. a deep mean, us. market on the pretty we some some think from of today, they some High the the really business. a the have lot right, a small not the lot research know They They kind And designers There research a consumers, of interior done are us in $XXX their what – of seen designers like UK the of homes top of have percent a us. have very our are research they call Let’s investors they that’s research, pretty and have million. of money. in large we when – I I and What done home. so exponentially directionally a have who data in are and our France. that and spend – top seen lot know the you They and at happens much XX%, have very like is so – like well-known brand own ours,

probably will most our the the be have XX-acre you but in bit you it’s Granted, outside innovative when the London, happens retail destination with what and it’s dominant audience I lot that people don’t going be they I know, to the have when to exciting, one time have business have open to in a estate assortment a website country. target – don’t a an you what you relatively better world. wide and with have got a SKUs and getting high other XX,XXX is of incredible big, high recognition, spend the experiences most happens And of awareness. believe than because So, launched known. got

So, or but year years. I couple million, I directionally don’t to if matter of be I everybody don’t the really $XXX or with to UK our be – big be am the I here, it’s That’s know million million just spend, first $XX next no what to will really sales going honest know have $XX in if over million. it’s range. trying $XXX we

into So I ramble a we so I of we think And are times go going say to question. that same different a learn to I a get long the that a yes. four way, in don’t lot on And when kind get say question I going.

unfolded? demand what of give second for what you calibration quarter-to-date the part you second experienced trends, follow-up so quarter. Understood. quarter on X-year based a accelerating of you for of demand was articulating us that because have comp the a we metric can the our question helpful. Can models My on comp how in lot That’s back the year in the and confidence are half the is the enthusiasm

think – pretty we – say would think want Look, I Steve’s demand to comps don’t in to make like it of to want too a are have give we of lives, the gave year. for Yes. demand think the habit. And going the question, first crazy most It’s of now. right It’s just I don’t crazy the a I we I our a rest – record of kind pandemic guiding we I what comps doing aggressively. I record time do. of We have don’t during answered track track just I right. again, good

of So, our the QX earnings aggressive am QX the right. pretty stock when went you. to numbers to reported sure up aggressive may looked look took and we I really We numbers big a everyone, Yes, one in like $XXX have numbers how picked really the got I going you think Do up lot questions to day. make do yes, them? up? you yes. you’re And

every know so, Gary. hands I for hours it’s with our like over going through and XX and sit We people detail here are going And gain don’t and – and the hours sheet not turned we I gotten says, that and long So doing rock. pretty where with time We even alignment numbers to have in the gain business. here a clarity. We this. good gain clarity and we we recommended guidance, is have we on believe be. trends then every been alignment it hours a like enough it categories someone on me and

start outlook. one giving were we think the of to ones an first I So,

give of any guidance we lot of did. for [indiscernible] even people didn’t kind directional Now,

are something we looking based it, and are the at today, It’s data on not are did at all – that bets world, the based we because aggressive. this our looking what our but you too we business. know we know got massively changes If is confident and in off, yes, generally So we are guidance. on

you Thank and very much good luck.

Perfect. yes. Yes,

you. Thank

comes next Your line Rakhlenko question from Company. Max & from the of Cowen

Your line is open.

lot. Great. a Thanks

So bigger picture of here. a couple questions

of do share first think the of the is today. Gary, your market luxury one So, segment is, you what the

longer where in do continuing you You share or your galleries, downsizing their the RH with closing could had think term, And your recent go are transition of one letters to stores. market competitors over comment your that a time?

and product right. billion are billion Yes, are I in sight the to in depending to on I $X innovation say that North which we that have America. have clear line articulated, not really $X concepts number, all the of them bigger all maybe of And that and a even elevation

to not business, would business, interiors very going If and launch and directionally continue expand and expand the galleries get business new billion the million, to have something think contemporary build lighting does build it to But and to $X continue really $X likely to we and our and what go to existing to $X than expand categories say more $X galleries billion, wrong that directionally here. and we to not. our America. hit dimensionalize we and right, assortments $X confident I’d So add we number our product modern, it’s design North bigger billion do, textiles are if does upgrade in our about today, just continue to billion rug are and than transform

seen about I call that and a an to County interactive had have We it’s before home We we So, to opened and a I new that be presented an full that have in that of and able million. about new might standing range. it’s opened football because setting, way it’s presentation. $XX seeing to people not but pass. on we from abstraction never that’s environment hit right. gallery I light before very mean, market, air think they a far. and our have say because gallery in but in think our galleries, creating a take have theatrical a like I they And guys the do are And fresh and market gallery like have we And that’s of did furnishings here. combination never artful seen even inspiring take and are somewhere XX gallery many throw of them we I new million, gallery – Marin roof, we a what how maybe, know a trending, don’t doing products before, old it’s yard gallery – share, $XX a It’s in a done new right, us people this we

We of artistic of our really So, we stores. kind home just furnishing. don’t create merchandise installations

haven’t this people like seen before. anything So,

And But the on now, Valley. knows call, it boutiques, square XX, So, phone – I is I’d call that math from Napa if about I mom-and-pops some our to stores are am give say X, XX,XXX degree, listening regional X talking people X,XXX some it’s but think to market. a new the creates from years Santa including Marin one And people because an who what higher Sausalito to yes, because Marin’s the name players. some stores our not – to end it you ago, small were home their sitting right are ago, them, X I going example yes there Rosa, feet. years take are RH – we of about like there

gallery square was X,XXX Our feet. about

we of bedroom right, So, middle. dining had our the X we the in or sofa X Marin, – X kind it’s gallery. collections, collections X and in think gallery here In in – X sofa I collections collections

X% of we we really we – like differentiated. maybe the And the our yes, are gallery of other the closed it, that right, else X% we had if X.X% had So, it, like in right in we weren’t assortment, kind middle, call galleries, when less way, by assortment. our looked everybody about it than of

don’t really went assortment just everybody because more than That’s guys doorstep in we if couldn’t Because else, hit those that our galleries. we our else anybody any you you your have look gallery. have would you we if big why a really and saw see people’s lot big like in thin have we than hey, So, right. books, where physical other traditional the world, mailed books, go, book our more you

wrong say our but always it is And kind did go – did XX – higher X:X us, to it the generally X probably call of to legacy to to competitors, a infrastructure. will But XX going people maybe of year square them home boutiques Now, go times, outperformed we more did XX are themselves long footage. galleries in it open be from big and end XX, gallery, when quickly. survey it competitors, go count and go XX, do in tell could same the than the galleries of XX after that and wait of to another we did X, And it expensive pretty have half the do away don’t I’d created last I it’s go to had more I some they time financial a comparison we yes, They claiming Apple, not take completely but Apple kind – some will was talking probably the you not right, that’s than phone market write just creating, new XX? compared to like new But who phone. they but of into was to this cell letter, market. that us remember the it model. a people a game. I in now are compare like are I Friedman can’t – But Hermes, Gary we – XX – It don’t said on about last to this a to game, the it’s something that new was created it’s

and So, it market also share. it massive new a market took created

we are directionally, kind think I to similar that. of

on a about the second, when Europe weaker for Europe, share market in U.S. is in we look I when and if than the landscape both And at just it significantly pretty creating aggressively I – kind that taking to we new competitive talk a are of sides scale. at market is think We are

and will and think we even I confident very be Europe, disruptive about we’re more it. why in that’s differentiated So

Great. very discuss you can deployment priorities. helpful. And cash That’s your

with of to of balance you’ll now accelerate flow with the years, You’re cash opportunities. a the free sheet. sitting over on coming almost cash set lot And $XXX million have

you share business are M&A you. or repurchases? So about ramping the up thinking Thank how versus reinvesting back in

Jack, all about of Thinking don’t the above, what. I know

Yes. the say thing. going to I same was

And even things, I but mean... yes, more

This think I we quarter, and it is so... answered every

Yes.

a have We chessboard sitting here. cash

will or investments we’re whether So M&A of innovation just looking and to business, elevate right moves and we make whether business the But waiting into investments things our there lot is time moves. positioning the acquisitions the our brand. of in at all kinds right it’s and into strengthen – business and the a for that it’s

about thinking you everything We’re and about. share probably about we’re thinking think we’re that repurchases thinking

but we tend – be So opportunistic. to

And so – and patient.

pieces move So make all will the – time, we we the still good Right our chessboard. there. on a now, I will are at right think

we anything We a yet haven’t moved but contemplated lot.

regards. Best Understood.

Matt. Thanks, you. Thank

you. Thank

from comes Yih question of Barclays. the Adrienne next Your from line

now. Adrienne. is your Your open. line open is you please Excuse Your line unmute line? me, Can

Hi, Adrienne.

be might You unmute.

Hello. Can you hear me?

Yes, we hear Adrienne. can you. Hi,

Hi, just consistency the Congrats about the I on success don’t know that that. the and happened. sorry of progress. I –

continue to And more opportunity. of income product the outside shift the The come And really past to Gary, $XX guess X like sounds awesome I feel to billion to into RH I overall. more is you specifically has I or the America, what over RH is where European Just going to the really as materially on household there is do billion TAM you see different Europe. this. is investment, the North international the been, of in online. elevating to design, target sort Contemporary XX than demographic to feels market, know It the that wanted $XX it years. focus maybe, say, like want can you talk about

is and greater and of Thanks pond. goods brands for kind appetite appreciation there like seems much. Just a luxury cross the we when so

high markets, looked It’s housing brands volume. think based net consumers, in looking directionally It’s looking I don’t to we No. at know But Again, And in we’ve see so with it’s I ways, that. and global on opportunity. start wealth, the ways, we add the – what the many on have math. I and pie in in math mean, high right. could the at worth ratios. net luxury it. worth, – let’s ultra based That’s penetration how we’re at I multiple directional

got generally room of If big where we’ve get Europe. about here, a team. cross-functional all you were big Thursdays, you’d together, on people see giant XX And

it’s just whole we the and to had too look much at. First, world

world that each strategies, high just end the lot but said other down people at at I’d understand Look like, Go whether and of at an we get really of of shops money approaches app it it, next RH. say. at at let’s people’s has a Got it’s phone deeper. now top market, line, estate spend Apple, But yes, the the Europe country. real in not and the most the rest – So everybody break room. right understand

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comes of question next Thomas. the Your Brad from line

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to So the beautifully. together are I all pieces – fit think of and puzzle the going

you, Thank guys. Great.

Brad. Thanks

Thank you.

question from line the of Basham Seth Wedbush. next comes Your from

Your is line open.

million operations taking my and bit us the Thanks sales Europe a more little I year. much you a just is appreciate $XXX building blocks evening. infrastructure the as lot. coming to as of Good terms question little the a in in first how support bit and what are My that’s give along the roadmap It’s Can Basham. about question. Seth in color more and on there?

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are doing I things. be think we more to going

world really ideas really where of the got can we as good really, exercises have good evolve especially our some RH, at and really, some with that eyes in with rifle and open not we and and ideas shoot the We shotgun. the

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are build going to incredible we physical experiences. So,

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execute to it able really be to have well. We

do whatnot, and with the going there to company, we European to So, that have Even we have to States know and Europe there is worked same get we third-parties people. before. division how the that though with are in going worked are never but United in third-parties with

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but you. – with So it we share know when more, we will

follow-up And for Jack. a Thanks. modeling just question

you how could balance margin of about color on terms year, of for the versus give SG&A? operating us margin some gross think In the outlook to the

that at guiding not are We level.

we we moment, I margin. operating just at the income will are – leave think the it at

years I you what have gross last variances we of you SG&A and terms the biggest advertising margin seen clearly, last at one – has about. timing the And X differences think there have look the delivered been that’s SG&A there been in of versus drivers. as have been versus year has and of we difference, talked

our in quarter comments I the then noticed change this we year. books that I So are made the last you think what mean, about with and plans

mind. in keep just So, that

you Okay. much. very Thank

Thank you.

from from comes Fernandez last Your of Group. Advisory the Telsey question Cristina line

open. is line Your

On you delays, on country? the questions. chain. shutdowns product any sort be Vietnam, comment your Thank from categories is afternoon. you. for taking manufacturing can And product how Good expect I you much Thank particularly, do ask want my going on now. you sourced to on impacted by of supply of to the the right

from product much How Vietnam, said? is sourced you

Yes.

what that Is you are asking?

and Correct, then yes. How much product total…? sourced is

Yes.

I if right. it specifically think in we we know the I the have country. amount disclosed by Asia, past in do don’t

broken out China... We have

Yes.

with we ‘XX, have got maybe are ‘XX. to involved got with we $X $XXX And them, in we XXXX, that million. with million grown of $X have high million people is ‘XX, boutique, volume of the China. and factories situation had business more meaningful out small Vietnam broken in Yes. some have really mean high-quality we Vietnam makes to $XX Vietnam a tariff part We China. – our now first ‘XX, ‘XX, cost. to We that with that million I in were business migrated

So, we furniture – for a can’t meaningful in great production. buy Especially you in have think Vietnam. really a about you relationships wood China got right. It’s when bedroom,

right. crazy is You would pay tariffs exponential,

make to they so is antidumping and So, so bedrooms. and it impossible There forth. on buy

And is China. of so there coming bedroom out no

been it’s of that’s meaningful Indonesia always because caused So, contemporary meaningful. But part on the the launch books countries. push Vietnam, heavier yes, us newness. And and hold it’s the it’s of a other in and to

it also business? Is the of part core a Understood. meaningful

Yes. here. meaningful sort – business core Well, of is the the all meaningful towards the anything to that’s

Yes.

I or revenue guess follow-up comment Contemporary out be And shifted you assume question, would smaller, Okay. XXXX? delay of XXXX the of how much can then much how how kind my RH are and the of the of digital but quantify into able in I to

right, for in Alright. our It’s all this year. guidance,

yet. it’s fall. first ‘XX to We in are guiding launch But spring. not launch it Then supposed in was to going

it’s Now launching spring. next

zero. So, it wasn’t

Thank you. Alright.

I no will remarks. in questions are back to There any other Gary queue. you. Thank the call now turn for closing over

we team is blessed feel be that work we be bringing everyone, position who for the to that vision effort And in is thank We your super to devastation. And are of for are our and life. not only fortunate suffered charge doing continuing havoc. America, wreak Vietnam. that variants and has here who the Great. much just more in and through. a are suffering interest, just thank could through recently you, not scale, COVID But hurricanes the to in the right the hearts even here smaller it’s that suffering and put out the even kind our values and our proud leading everybody Well, and you the all go in people and the of everybody the people to again, – it’s world and and of

good people hard feel been about business so it’s So, it’s your when are so many to suffering. –

– more of never but empathy. have of so excited, a the edge we a lot said And have lot have to been and this and time we is

also so to these best And just people just our everyone want magical history other send we we think really you wishes to more innovative, and the thank exciting, struggling for our time to are out than go are our rewrite times. more And I – just very people, any going through that to And in that thank history. as at more company I making forward. this just

So great job, you. everyone. Thank

it, operator. Okay. Operator, thank That’s you.

You’re welcome. This concludes today’s for participating. conference call. Thank all you

You may now Goodbye. disconnect.