RH (RH) 9 Dec 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2021 RH Q&A Conference Call. [Operator Instructions] I would now like to turn the conference over to Allison Malkin of ICR.

You may begin.

Thank you. Good afternoon, everyone. us call. third joining Q&A fiscal for conference earnings you for quarter our XXXX 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

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

is line Your open.

the for currently level? number evening are XXXX X night everybody. of secured many several launches to on expect letter, we Good but if you here you to estate planned that states. highlighted Gary, reaccelerate good the can XXXX and should plus I the guess comment real was leases curious within are or openings that exciting the in pipeline How I in

so in that point, kind silent are will in happen have get Steve, as of are much through of we the on to that is bit there construction clarity the happening so on levels this talk world about change we At and many just because a Yes. going to we chaos we think quarter wait fourth we little in till XXXX. what more development

So – release. with in you the will more that fourth hear about quarter our

on impactful as quick level could Contemporary then are you comments is hear overall a great it you impactful Perfect. right it? current you next are. of would just to demand to think hear demand RH be about awareness how could the maybe follow-up, just you And it’s for I sort where growth? creation year, Any to year, newness brand thoughts guys a love be still source to just of to slated hear excited but book that high would on how think launch how love about and next the your of and

personally game I think Yes. it’s a changer. complete

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everything. changes this think I

opens I think market. of when sophistication think and of the I people style, see up quality the it level, taste Contemporary new entirely another sense the

designers I highest end it some think our attract of the brand. will interior to

will them brand. the of think it interior designers have our I customers highest point end to the

to things do our I in think a can’t you industry. that going are of deal one those it. to undeniable be that ignore it we going It’s big is

Thank you. Best of luck.

you. Thank

you. Thank

Our Adrienne Barclays. line of the next question comes from Yih with

Your open. is line

these could very and context of And or when be for you then and London, what Munich we supply say exposure XXXX? quarter into inventory looks I wanted about in you Thank the first have like to the times. And Paris, secured regard identified there, – you that see Thank very maybe talk and in Jack the through the you England? the on items half freight, to can expect the the had the difficult very and the color much, open you quarter? of of Dusseldorf, timing you can Jack, Gary, the that latter locations RH much. on team, some navigating line Gary, those to quarter Gary, you could entire if great you chain, with backdrop give current sight

Sure. Yes.

supply with It’s okay. and worst everything. the chain ever mess, start seen. It’s a we’ve Let’s

with is to than but And through and far. And thinking can had what more with team it’s smart it – we are so time can and because and we a world others really I thus around So have how others do had been, but inflation you’ve Vietnam, we worked leaders who overcome. leadership thought be we that until are cost it everybody country it’s parts, like adapt everywhere. we state, appreciative others but have navigated a in doing to where within a doing issues to proud you Earlier, have everything, can’t our leads it any and just worse this such disabled right. and who you with. a a never them. we time energy than side, grateful others to what through And takes was real ever perspective, to India it’s health things leadership this to to deeply side, all that challenging making suffer difficult uncomfortable, to a everywhere. you’ve is especially to have execution improvise, our of spend It’s brand taking never one, collaborate really, ability one but the collaborated think is doing and somewhere we from time line our real those It can’t are it’s strength thoughtful, generates do. you time. a have what operational I just am have perspective. am manufacturing outcome. lead we of this really But period on people be revenue the of until company generation Navigating this how the the see of the There lot demonstrates partners be partners, haul, done, tough a leader. who do the I also takes a through mentality, There is vision and sure freight what hurts, an whether times to best and time to the in we and with reactionary inspires see, in saying have kind of industry and guidance of your our have reactionary, from like navigate we in margin it say are expansion the to the look, these comfortable you perspective our demonstrates through from results our and that have

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think to health that The faster, have. have Omicron. The knows yes, say to, variants forward are data getting the I don’t it’s know would not variant you but going as as might knows going bad many it, to I as it’s are be, is we So, I better. hopefully, it what the who look bodes spread early – things risk. doesn’t but to things how same Delta, can’t seem Who Omicron say – right, next – well

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every For month sure, England. rains it in

like to we the would you impression. don’t weather get open a first chance second We is the when nice. make So, would to – to like

June May, I are track to open, we late be weather so early and on a in And honestly. the could think call, it

We are and the go to report your you rain and weather everyday. at see you looking phone

our everybody not and yet. we sunny people. ready be is see when we But to be going and including we that day. us first a a the We are in days, we probably might few is to smiling will happy, of day kind open want the summer, we hold by see thing up. clear don’t – That’s everybody early unless And open will but only that open

So, we we If have them. other expect confidence about this talking that. about did, openings No. international we’d we year? be Could

extraordinary say You kind And take more got about of These rollout. costs are but working like not to opening. takes it’s to is worth the and dimension in – complexity requires years. quick takes and more time, easy. more it. costs we requires a manner, think more a complicated not time, we the They people, we more. doing money, more people It projects more size They are of the are what

it’s monetize And when work think what you so And our remarkable out to figure always I that we monetize have unremarkable. it. extraordinary and here is really and hard in how to journey ordinary do you can learned

complicated things but and time. It extraordinary in so more people And takes requires doing It more it manner. more more costs remarkable, – a more money.

and ones the hard open. ‘XX. when have to forecast have it’s some going predict we say will are But listed opening so in I’d these And actually to

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I not we stuff about have The think not in is in about and way, the will that U.S. ‘XX it’s I the good like the by pipeline. – feel it, way are We ‘XX and opening

opening markets. not are We

overemphasize are open up in and up the the on Milan, shareholders like When opens We up it it – we phone, analyst Dusseldorf, in we countries. just right. we if And England, community but or team in open one we world, not England these up our at or to it opens France. Italy. opens opens Germany. to United Kingdom, that, gallery. Paris, around opens our partners When look We Munich I the can’t up opening the can’t RH open

big up long-term to for you and people And shopping the we are just by if economies. think one going virus one anything. online with these about this more are of about online is So, that financial moving the one, made countries. online comfortable is benefits And and business amount of a it shopping open lot of

So, we of that view. our point like timing from

them going high are galleries the learn consumer end. not We and correctly. to penetrate unknown we to are our – at end, need these are in high not we markets the to we the to how many how But we

a the was of low really they And think report around had whole intent our think the I report was of way conference probably of smart the another those have we it did ranked buy I research and those shop you the awareness RH one IKEA an and of RH. close has right But really a we I market in what We that are wouldn’t and was in even to – the bunch researched be when firm customers that radar, think ahead Europe. on Walmart, UK, they XX%. the out call And our analyst don’t XX%. I XX%, real that was many RH was you customers said to might UK, percent grasp because Target, mentioned open know what this the how listening in was and They of in interior and – UK. But are. – an and designers now, And there investors shop who came that right. obvious, somewhere to it awareness definitely, us. like people don’t right, a and and places on consumer

right. So, the are charts. charts, off the off are those Those numbers

of we countries are the legacy to and of square with or in kind stores square the and feet opening open not started in how this this you going So States like are so of the a opening this selling. market have little with have feet unique we company you X,XXX dynamic brand we United started way company when open, when X,XXX you – are

best We are work. with opening our

So good head right awareness because with start, we the brand running we a consumer. have have pretty

We of ever are one opened, every real like historical the estate we exciting some that the have galleries I we ever opening most most of of is incredible them are like re-imagining. things think done, have almost galleries exciting extraordinary we one

So, when anybody it think our next industry. I the a business us about the about our outgrow the and years, X mean, over think business position team I I in to puts thinks in

extraordinarily helpful, That’s Gary. Kudos on tons future of the obviously execution the has and Thanks. opportunity.

Thank you.

Thank you.

question line Grom Our the of from Chuck next with Gordon comes Haskett.

Your is open. line

Great you. thank question My deposits, on sequentially. they revenue are deferred Hey, is results. and customer up

the I have started am any to make earlier backlog $XXX you point levels. on million. down at in stood believe at about the progress one they So if I year, bringing curious

started So, many it’s of how you some going benefit? you have do out to them you or quarters to to down think bring that for clear take

Jack. it’s Chuck, Hey,

$XXX update million year. the So, beginning we of the that the for at you gave

One created. it to we thing some backlog appropriate. We that there new haven’t have of backlog, you updated realize and resolved that is do will when we as though,

higher you sequential, is the volume at sequential seeing this than and quarter revenue highest all of the you in prior sort So revenue. And time, quarter. higher sort is obviously the revenue of that’s and our last quarter of what look of really are our if

adapting size about we working, reflects of think. as I supply – chain, the the going chain So everything right over we And are it’s are will it. to are the sort sequential mentioned through a of it going But get else build in together as and get see the again, come and those. we we business. supply as now, time, improvising, are we you I resolves to Gary And think all

now, I’d way we year view with will is There by the say the enter backlog. is the following down a next won’t And our right backlog likelihood high all the get Yes. year.

it. Got

Okay. the your then And referenced new update. you Cool. also in variant

you about rates or changes the you’ve weeks. for I’m question, but wait bigger willingness not? And talked a being cancellation of unusual near-term over couple maybe then just the consumer uptick for or any the seen supply behavior curious chain any if the any picture, to products demand factor, trends past Sorry or curious seen if you’ve in still in

Yes.

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you on minutes. So XX around the to XX get ride somewhere – always but

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read on actually kind And read everything a love time, to because I longer, XX% XXX% is – a on conditioned there more costing we like today, they thought world were think XX% said they that’s and been the crazy than spend on almost going mean, we’ve to if is more get time. live surprise all every they remodel. you just to level, to are don’t wait. not any of they I it’s in I something getting – contractors, of I’d report the spending and nobody money. know anything on know their anybody that built I people I who’s other waiting know spending and the more are XX% who’s and

people Grubhub shows driver person only super because Postmates time you’re or kind on of they the with excited shows kind meal up your are the the like if up, are on So time who of today.

for in-stock our there customer the advantages that’s get able including about in-stock. is reason to one wait, to strategic can to our in on is to website, for in-stock have address was Chuck, of one thing Hey, of – wait them, want think mind too, And actually fast. is to keep items we plenty – any when talked And of what doesn’t I I and one was we there inventory. a one those but need obviously, you some design customers for, I want I ability And the I that, I items shop reason both. in-stock,

the I luck for works the Thank fast the thanks color. pretty year. of Gary, think the rest Great, It Good well. you. that pass.

you. Thank

with comes Loop question the from Markets. Chukumba line next Our Capital of Anthony

open. is line Your

Thank you question. my so much for taking

your say Before brand who European my and going provinces I that was analyst I’m not question, I report ask about to wrote awareness. low the just

clear white RH increase Oakbrook you mention just, wondering, dollars up. And letter positively the to I And there In-Your-Home. have to factoring in obviously, is to just RH mean, new should transaction the on sort I margin was so of to because of your and store that I I cost. breathtaking. expansion you wanted spectacular. about know how be I glove my just that that But want significant in cost just of So the absolutely that very, also we important. was gross In-Your-Home? recently But I in I talked you’re very is went mean it RH question, your – expanding each any in afford to

RH I go. think going would is in There is to In-Your-Home, just Officer were his say an math Garcia Delivery. Chain make. you’d And be President had the an call had room, – He’s Supply good if to any leader this on RH a investor Fernando of to kind you, be meaningful, of The and And return we’re to want going We of Chief RH It’s is in and visionary you Home we investment. an there I behind here. know that Dana In-Your-Home. Out, of significant In-Your-Home. don’t is guarantee a inspiring presentation. investment on he investment. our the been Fernando

mention you RH So anything In-Your-Home? Fernando, do in want to

to, requires an that as Yes. a I experience mean and Gary refers unique investment. memorable RH In-Your-Home,

for the the we desire with And the have consider the us contracts able financial Gary over have – create. but that brand will However, negotiate allowed years, the customer RH been significant our in for investment last to of In-Your-Home. great we X investment to demand partners the mentioned, investment the only the brand, not experience the that return is from from and

good That’s you Got so helpful. all up much keep the and guys. Thank it. work very

Okay, thank you, Anthony.

Thank you.

Our comes with the Curtis next from question line of Bank of America. Nagle

Your line is open.

question. for the evening. taking Good Thanks

But sub-brand the the Modern? I expectations core what the of brand. I incremental, So brand your I it’s a like I and it’s I mean product I Just launch And how yes, looking It think looked is evolving how the to what see obviously are evolving the year for guess, year. terms I obviously kind in bigger it. big guess don’t a business. of quick launches. back incremental product? of And last modern one just – than part on next guess, later, the didn’t

think Sure. Yes, the business business we the Contemporary. about Modern today, a of RH we about meaningful RH Modern, – we our think part way today. Interiors, have And RH

how we Modern introduced most have And years and So It’s the X mailed collection we of they have than Modern new Interiors it. years. book because had is a amount it’s in but core. the not think That’s about now sound aesthetic, haven’t we part X newness in got to will both anymore. years. in new of have But

of with me, now I incremental all – mean where and that up kind customers times. to going Contemporary knock the enough, got all as development of of where incremental. wait think Contemporary we wood, years’ massively we as But hope, far the longer worth and make happens. won’t lots to kind on We changes Curtis HR the Well, and product is backlogged, supply incremental. you’ve caught nothing you what create feel chain of new disappoint variants new So be X is excuse is should not time will

It’s we’ve is more pandemic, spot out Let’s would And to biggest about it, time it, in made new the next just than more through The is put how dimensionalize brand. be sweet new there some to XX% lemons biggest And us so incremental the because Modern incremental lemonade Modern Interiors from it’s it. collections think look in given Interiors be we ways, way, look this time, bigger it’s time of new idea. our new it’s of dimensionalize I Contemporary And to differentiated. our expand and and all it innovate idea. is it we we excited book the time of – kind tweak it could book. – is to get the and think to it, continue Interiors. kind every week able over dimensionalize biggest and now expect here more and both at been rival and of just to Contemporary more because of and XX% more time business. part a and about at Contemporary, critical we’ve and we lift the then it to we modern whole

of be incremental. that and Interiors So And business. piece be anything there’ll to Eri you missing is huge of Eri, be here. then incremental a both add a will will percentage I’m Modern sitting want that that out on?

No, I agree. would

absolutely eclipse rival I is it the I and when concepts much, We’ve exciting elevated concept. we could think the will and right the now. it view collections design of and relevant think very point along it’s quality made exciting. fresh think like And way. you launch, all Contemporary And that bigger eventually Modern said, I and and the and much

just Maybe exciting. a for Jack. very sounds modeling question quick That

Just next increases look, backlogs or that. given think you’ve price guess, inventory taken flow takes haven’t just the it asking know the some year contextualized like say how anything fair or maybe through about not differently? But you that. of still should for sort I long price quarter I thinking least to kind for we and guys or and through. increases on I’m that would or see uplift it year, next already be at you first detail of to two from it through

in with to you that you – way ask the there we’re our based address source outlook books Again, no way made – not increases think of online secret follow ‘XX Look, specifics, look first at a it. chain. think but to I that’s can for way. look speaking on be the I supply factor Sure. we’ve them, the if can to at price this year? or revenues Will some taken us in part year you good Another of some having

even are not yet. price over I’m sure changes Yes,

So inflation yes, there price is still happening.

but don’t that – structure that to what’s margin the undercuts want fair we anything to we’re have. And to do so of continue going and kind do we right and

everywhere but the increases and fair. costs, – lot of and So doing and believe happening. we’re what crazy just input price we Restaurants it’s right a is

is it’s As kind of any the a in I And price balancing good everything them everything our And right? their pandemic up, money keep government market and to issue, way. stimulus the that isolated kind what currency through. in it country to it of print one moving, country, of afloat because think, some not massive a and going world to we’re and in allows global is the this it’s out, doing every devalue and in is passing all way not the

to the knows for, prices how all so rates going in to this. What’s point long money never with interest everybody a of you’ve happen? And inflation. what’s here how Fed. seen are Hopefully, got happen going it’s is long We who never and happened go before. yes, like to to sit We’ve dovish on go, print going And up. going view

pretty Powell I happy. is think reelected. everybody’s

by seen The I a And But never again, so so, we’ve so it. far, would lot have gone of good. one. thought would have never seen wrong things world now. has this

think be I to So while. here price increases probably for are going a

Sure.

good the the rest time thanks much. on the of Appreciate year. and Okay, luck very

Curtis. you, Thank

Thank you.

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

Your line open. is

that some trends at is there basis. stack Recognizing or implied Good Thanks guidance that to your chain are – challenges, slow my going lot a supply for revenue fourth there quarter, fourth taking least fourth suggests are your trends uncertainty a a question. evening. the and on is there in or lot demand your out of quarter especially slowing

do you categories last that to already consumer, the in the to see which business? affluent So a next starting that continue months starting to that’s has fatigued spend XX the to less year home, starting other being and is sign been think shift maybe get might you’re in mobile that over and the at

but has at don’t changed. you behavior. Well, yes, just your look to income own their everybody think travel, hasn’t When have ability an to I

has shut that And And part spending somewhere or size of opened home money market. up. and economy economy travel saving clearly, part Xx either the furnishings the You’re And was of the leisure down. is else, right? it of that the

try the to a than get places many these years a days ago, room hotel X lot a book different you beginning to was part a at might If different go, it than to you want it’s flight it massively pandemic. year and it’s of was or ago try at

Golden are a a State didn’t a have weddings. Nobody Warriors now money to there you of arena. to of Warriors. on The last to of things weddings. wasn’t right? to home, people But the people zero, want went XX,XXX-seat other and spending of go – really has couple to happening the fan expensive the It spending is, of just lot and events, there, F&B. yes, parts And lot has of economy. of a cycle happen the concerts. and energy – how be in a there arena went be some in view so guys would affected this out There and weren’t that, this weren’t going of going money everywhere, other in went whether events. I no right? tickets, how back back concerts to So to There There money a long-term People spend years, game – and it’s perspective were fun. travel one I short-term think, didn’t XX,XXX the X,XXX leisure think you shift to the night is is games, sitting it’s will now. in changed whether I Nobody here imagine – arenas where soccer question I that on It’s like to are matter games, that it’s you’re it’s many whether spending

and their that going number not home they there’d they of be only to at amount another afford some this are all at that have home, want learning in out. of can thought out if going a have the entertaining threat the importance spend think do, home, of home, you homes at spend leisure, is created may to pandemic. the people this to have – to time of the people home. of And So Yet way of I and variants, on entertainment, so are what permanent shift a the are travel, just have the is much going the kind so would forth, are new amount bigger getting we’re you of the to but they shift time

You this. expect like don’t anything ever

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meals. We guard, you in upper you it’s most the where night. almost all said, I it’s where to to you’re been certain the you your a think important pandemic maybe raise you’re all a It’s have home where every you consumer, home. you weren’t and home. most many you eat amount caught of spend work had sat a the everybody an go. off time shorter right? things of term especially and great at family. impact. We saw people, around all place And while. that there consumers, We might our have and in kind if wasn’t it And to don’t for hey, affluent here a think have if be our of end we home. why It’s I But someone office, going for now, for all working We’re that people, make sleep most home It’s home, your your better?

you I know wrote for is new It’s of it, it’s furnish there good last the yes, the – for be car. home. more surprised who than habit X longer longer. a it’s think one reports the habits of way. car. It’s the and I don’t not And entertaining good for stronger long And you welcome, is a got have home. stronger home. tells me the car more. at the they to – Everybody have it, all for more new because who you home. a and you just Anybody cooking to in Williams-Sonoma, The cooked I new been now be And You they like coined we’re haven’t the by you’re like how don’t cooked wrote buy bought years think

get you furnishing you a anything clean it years. kind everything and a buy When buy car. home, you you for wax kind do – you you You don’t to when the but car. it of it, need of you’re you Maybe

spending years. doing there predict in that spending And might might stuff it’s to time a you’re be time future. You’re more there pandemic. you important, for and it there now more be the risk even more And you another and of

might – see think going to but don’t it saw we lower going you our get was Like rates, year, how business to lot Is permanent are then last I shift Sure. the the here. than big? thought thought what there we a know. after big in plan be the it same not in a pretty Maverick there And slowdown? if It’s good I mean growth a home XXXX. for again, How performed say be far. Gun? I ‘XX we XXXX. give so lift far back so Looking or we Top giveback we Will because giveback in a could that did of

question you some two, Right. XXXX? New give of don’t indication want obviously That’s much. on to coming Can big Year? you is us very ‘XX model? you And did the you One so in of up sheet. helpful. is My will a yet. all recapitalization impact the that impact going the Thank just Can that’s in guidance the the balance how have model cost to that follow-up for you factors understanding you start-up initiatives touch various with two provide the

There that money that in that out us other be don’t is we happen how a it’s the is – see. pretty plays plans rate there money. patient. we one-time for interest we look, on puts not we a didn’t But go if billion. investment know billion. return in have But to right? the an is the Exactly side We that away. out, costs. going raised $X want opportunistic. wouldn’t and thing think a white, Well, some magic We plays recapitalization to a have that borrowed will on And create We we’re when and on that position Yes. to great That’s it. that what’s future. black step-up $X in is makes There an

a other as color. that things going we’re to more and Jack add it initiatives cost will is there but doing, Yes, – you’ll relates So to one-time and more spend we’re to money.

going we’re open invest countries. We’re to up to more going money, and

new DCs. We’re opening up

are been investment the We’re than a so. we that, is think and X be. conservative, tend to and years less we’ve I think and investment – to that. we community number have guide going I of to good we numbers be to accurate more there not been last relatively And how doing think cost now. like relatively things continue we conservative And Maybe in ‘XX our an guiding in where will we’re for the yet. be years But

of we we in this in months going relates as other here learn with lot mean know clear of a that couple a invest are things we’re RH company we In-Your-Home, be I things. investments will it we and invest relates view. and a international, I to we the our demand like what when XXX% next other relates to of as things, view have of So, to to mean, it And as it going the own to long-term trends company.

by the so have was high don’t – operating know industry for the best mean, not little. by I a invest I And besides what we why in mark margins that’s our we RH. our long-term, in and industry the

think were around third XX%. XX%, quarter, probably the it’s I In XX.X%.

next the the points right that? do you investments. get than not person. How we’re results basis luck. like higher So best probably You X,XXX make It’s

you they to every worked stop greater. they offense, to day people I’ve playing the brands start because with company same playing said And the and same energy in, game. to and start view. for with courage they to end is those we have have got to been protect when have quarterly me investing stop this passion of I the make make the things today time having and happen around company the brand thing Every The better could drive right the we start investments. you and that you say You worst brand. the erode stop someone at like investments a meeting, long-term protect that if make a in the is to If

we’re So quo. the allergic to status

passionate are care big ideas. are. We they finding about don’t where We

not us and up one their It’s world. make make Within Expect to can not be you the out this respect presenting most whole the like of the in excited meaningful the so and But tremendous. the status We get In-Your-Home. I not on this group, you anybody have to few but money should wallet if most I personally build invest quo all expect us to meeting we and Put to years. you furnishings in invest this to world. team ever never – us world, like if seriously going If in this this that take to repeat RH want level. is In-Your-Home, of pay brands against tape, It’s the the pipeline guys about in the home take us our say, admired like of – brands call in admired the next seen this in my company that like this most admired this for Not RH are could world. almost this investments defense in everybody to costs. here. and to new brand this? at going us to a brand start-up to to anybody And play for brand. expect what cheap, protect try expect and brand one to Expect on

Jack. it’s Michael,

I any of think costs obviously, in to to costs. adding that But revenue. I not the just add specifics would related the much as initiatives start-up the follows numbers mind of keep the two things,

in aspect say thing just our the have I’d And that terms is think second you about think scale. of So matching. then I

over EBITDA. have of billion $X We

what numbers are. we thoughtful put produce we still and relative I launching point, ways or about it’s here global and the again, currently, whatever be needs so it’s we to as it around Gary’s material, And you think Contemporary modest, to it’s need whether always to be to investments, expansion, some

helpful. much very have you a and Thank so That’s holiday. good

we are still there? Operator,

with check in will I it.

Michael?

You here. are

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the lose we Did operator?

here. am I

Our question next comes Zaccone Citi. of with from Steven line the

Your line open. is

the circle evening, to my weigh how chain. third but how everyone. in if back Most just on much challenges be It just on could I that Good supply supply answered, you maybe options you other just chain this business, if of maybe other fourth revenues into other are some you quantify chain continues we in your look impacting as quarter. is the helpful ability to areas, much wanted the what next maybe pull? would have been to questions quarter, supply vendors, like then point the to about And some be year, talk can diversify for pain the

go don’t for you it’s you have you if think to But going think another go where to Elon to got there I know – is diversify, a you planet, to hit. Musk. pandemic,

You it’s don’t hit. what to know country going

that to could pandemic, and put do, from the the Vietnam move be Vietnam the worst maybe other you right, because side get thing going on is of pandemic. can country going that and now hit You by it’s the to you’re in yourself some

think XX%, diversified. XX% in what we’re like here. Vietnam. Nike, the short-term company a relatively I play Can can’t it you you was take business again, And So of

Vietnam force Our percent business committed have craftsmanship. best some have products a in great we great is Vietnam. XX-something of our a culture, and XX-something. Yes, They Vietnam. world labor They in high out has get and the quality. of

hurt going Vietnam. pandemic. not like It furniture our the down permanently saying, be because temporarily We’re Vietnam. a because pandemic. Vietnam was pandemic a decision. business leave would issue like bad That business to was there The be didn’t damage temporal bedroom a really It’d of

nor we we furniture. the business Let’s business. of Like not about the it’s get how about think bedroom should think out how

of business be, going the is impacted the supply what going to chain, kind So supply relates as the chain chain. by to it’s every supply the it world to is in be

it. it ride of learn kind you from out, So, you

react You intelligently.

do panic You dumb and don’t things.

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too out of it. too making out the of it. much wouldn’t is supply making out news I much much is too the chain. Like of Everybody make So

we you’re in Imagine looked entire By the Of Did numbers QX, end did. Of that Up course, have mean at was did. It did the XX%. XX% XX% if beginning up chain at revenue and to it’s didn’t of Everything XX% you at to XX%. then mean XX%, that production So didn’t zero not means what doesn’t up lose XX% mid-QX, lose we we in of we revenue XX% QX? had the and would XX% supply to at blew QX? that’s XX%. course, the was really our backlog. when you’re think I the it QX. you is then about was at when in it, mid-QX, business. up the made production. down of shut to it get up get were made the the all XX%, QX, XX%. Vietnam that By our By like country,

it life So it It’s goes It’s months, strategic. it takes business okay, on. quarters, a – not temporal. is. goes up, what catch It’s on, that’s is but year to

want I about quarter-to-quarter. week-to-week that short-term to make hedge them unless traders clients buy fund or are Tell our it us much play wouldn’t just So stock. or too just month-to-month your don’t

color. Yes. Appreciate the

the contextualize to help situation. do though, details, Your

now? just on think follow-up some How question. then a priorities back the I Just more we previous cash raise, on is we do the having for on priorities think about that. for appreciate business? think So of little you of you go the those excess do the balance a about you how Like as capital to circle prudent international, And as the kind go cash sheet now global? do

billion we the nothing it press $X press release, everything release as the said loan. did – to relates since think in the on I term the changed we has

to don’t go the to to the need go money So don’t nothing say. global. We international. money need We

have plus quickly. XX% ROIC. a We pretty turn We investments cash into

of And directionally, to positive year. things normal more We’re throw off kind cash next cash current of throw even up going a lot in flow this remain some will year. if we

how exactly you we – billion. read the tell press And we you so will the thinking release, $X about we’re

Fair Happy enough. you. holidays. Thank

Steven. Thank holidays, you. Happy

Thank you.

Max of next Our Rakhlenko with Company. the and Cowen line from question comes

open. Your line is

lot. Great. really a on quarter. a Congrats nice Thanks

can team can World is about better projects and some year? some of have letter, instance, on discussed just major cadence we the sequence the RH you other working first, growth concepts that for throughout you us next year, of Contemporary, maybe help in So of next the a so the

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Yes.

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Guesthouse.

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Thank you.

line the from KeyBanc of comes question with next Capital. Our Thomas Brad

is open. line Your

question that. the evening. good had the team team if add be the address evolving nice, to how My Gary, having visit new was here RH you changes Great DeMonty’s that and I results, retirement Hi, would going RH from looks Jacksonville is could after to a the really store some about and that? chance leadership of just in and

DP Sure. I Well, look, for XX and years. together worked

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Today.

Today. great, Oh here my God, Brad. timing it’s is your right what is today. Stefan –

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our X they So, – Stefan, now. in here, in culture, years, Sandy, years culture our Fernando, our XX XX years what years in culture, only have X.X here

our... years in X Yes,

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have that for had been history, in getting evolves. brand his and career partners all my team and life. a He and played in RH for will part this is to better but I working his respect a this a life DP. and a be guest been DP time us want where But is ever So, career, respect best never He big friend an place. has area the love it will a I in available has everything longest say things, any both to it’s he would that and they some his in and incredible and be – to an partner man we love and family. given today. for had All so of And

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That’s for Gary. Stefan. hours great. much happy Thank you so Congrats and everyone

Great. Thank you.

Thank you.

Basham comes Our line with next Seth of Wedbush. from the question

is open. Your line

at circle lot a that sure meant I initiatives the Thanks X-year basis evening. am margins back that on revenues. want good you of slower just discussion just increase moving quarter. to a the operating I you said making about the follow quarter costs that revenues, on the opposite and third a wondering precede Jack, much based starters, if the the some especially of implies understand I near-term for the pace fourth costs the pieces. to will than that will will for the guidance just

I am initiatives. about talking Well,

a international So, store, open it’s an store, costs the it, recognize rent one. of are expense, many say, – costs When example, if you you lot capitalized. again, of times that beforehand of for the or open you don’t let’s you

QX, revenue the some dollars, one that’s And right, again, than of variability a is at it’s quarterly we it’s if dynamics some it to revenue So, keep mind, the things the you be in I quarter in of of lower as going there here one QX the income. dollar to sequentially think and operating sheer just terms amount of just relates the though, in impacting to there. have look what

trends, where the focus outlook our we are on the trends I and year going. long-term in think just

think that. is of There be I read to there. I there noise is anything differences some a there into bit to is little going think timing and there. don’t here here and

it. Got

restarting. just obviously, source not mailings the the year? follow-up, of costs additional some Should think of the books about with are in but now giving the you And Okay. XXXX, be thinking the you XXXX associated there revenues that are the ‘XX, such following to like pressure from guidance a shifting first half are source we some about cost that books for the could

said, that. Yes. advertising year, you mean initial we timing. launching, that’s books, demand as the for works. recognize When following quarter-to-quarter how just Again, in the we generate you the it are spring and Again, cost, Gary the summer. mail then and early that’s I

for to think I get I don’t Contemporary investment that for modern, interior it there. So, as for relates

I won’t like XX-month our I investment mean in the think, think source you a really books right. investment, return about like that we months, first XX get XXX% on

We XX then mail will and it we will mail in again it months.

Some years, we mail a second book.

the think and in you early this won’t life past, will in to going early the Because summer, will these and one I call book any haven’t get we mailed we in in all are amortized the the you books. probably of take books it’s XX the second mail the launch first quarter, get but over in months would books we them quarter, the spring, have so late But generally year, because we you some costs will spring revenues half. – first of revenues really kind the lying.

business around So have yes, it three following revenues and first a be that the will wrapping will should and four, so you in get in de-leverage. leverage start then and we And got demand have think it how the revenues, customers. a will have in two stuff demand, have right, timing should to also the quarters special you then order ramp because year, you business, high at just to about and give to the got timing you have lag then and because our of the and of will which deliver

kind Again, they So are the fundamental business. in mean those things yes, strategic. I are just not of timing

thing company in is because about decisions this than any to home making So, coming and think could shift, invest the up you starting short-term this worst start long-term screw the industry strategy. will again your even out do pandemic, of things, cycling

weeks quarter when the the going and be massively sudden de-levered of end have and try deliveries cost ad at costs all of do more not never in fast about of a guess as going, and and end would and like sit like deliveries going to That’s some up try letter.” quarter on let’s and you be jam as longer and here as the at these going kind am QX, create at that all that to is the I a revenue it depending something forward incremental get we produced stuff, to stagger in three create And So, the We want just QX, right. we the going picked Elon pack to people I on, say, thing book fact pull And even and books quarter the shouldn’t weird are much can of no “Hey, as mostly Musk come “Oh, QX, to clean or or here demand mailings sitting that.” worry just to like has that. write cost. we dumb mail wait and to beginning of at to in we can. the that this do

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then volatility risk rate now, And a demand a understand. Gary, risk there interest Completely some picture, been demand XXXX? stock that there bigger at of recently. also see are has tailwinds Do into obviously, you potentially lot increases market demand a being being but all or right

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don’t they telling So, already I know. anybody anything am not

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those like is scenarios. in going have on prepared to tailwinds that there is happens optimize be what people plan are other like macro grow sunny control rainy for over going just the be of you is a there and able going and be We a long-term. got none we take days, share, just to So, brand headwinds, all going be happen. to days things doing market the be investing keep kind have And just doing, to better there build We control have to don’t outperform a for be and is brand or and to have that. of there us whatever and

So, on can to decide what those do days. we

holidays. you happy Of much course. Thank very and

holidays. Happy

Thank you.

question from next Telsey. line of with Our the Fernandez comes Cristina

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my ask Hi, you Thank I about marketing. wanted for good evening. to taking questions.

letter, about comment have which the advertising a time that. the first on think you heard you I national campaign, commented I is On

about any maybe if general, thoughts telling innovation have of you you in lot a So, customers how year, around that and are those. marketing next your

Yes.

the us do that’s a fish launches, it’s most kind kind furnishing magazines, You print of whether some the who when designing whether with do so the a shelter digital and have on looking in we home, are, – where past printed home or a home fishing seen of of a so we building, because people kind forth. a are major campaign one, a home at decorating it’s are and a one usually magazines

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we want world about so the And know it. to

think I it’s best work. our

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market. defined real a got have We

so to are they now Almost things – interest, looking are are is a like looking format. everybody we there the But for. trends on say as and still, their home, more redesigning they think like the fish out are they are So, tearing is at things that’s is They doing the whether home, there is to are. format. They resources, home much. know fish anything the in or things would it’s just any digital on still we their what print that I where looking is at – based in there other everybody I looking Pinterest board and they magazines, what mean, doing see people are

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Jack you. Yes. will Good question. for answer that

we million quarter of and So, million, $XXX owned we you with $XXX have, as that ended hand. know, inventory on the is

So, maybe you get of X year… percentages the

X-year percentage.

is One a on it and at little way obviously, to gets basis. X-year here is a skewed this, we look the look comparability The – versus way because at there. XXXX

basis, if So, XX% a on look I at and up XX% revenue X-year owned our you think QX, was our inventory on a X-year up was basis.

growth are showing relative still of behind from we to business. that So, the

Thank you.

queue. Friedman, call CEO, no you. the Mr. would remarks. in the and turn to for am showing to Chairman I I questions like now Thank Gary closing over further back

exciting to not And your without RH it hopefully or for thank I just and everyone brand it for everyone look the we our your love as world, people but they really I all business help our have to an is great the want wish if everyone, a spend quarter position also Hopefully, holiday, thank time Well, even that Omicron, to around holiday. like and to efforts get happy everyone masks with said team, what XXXX. I right. that interest and States, happy to we today. questions. But is United and going Great. really the you, for fourth forward love to across a your doing just wish a supports they just

So, you. thank

gentlemen, you Thank that and participation. for Ladies conference call. concludes today’s your

disconnect. now may You