RH (RH) 12 Sep 242025 Q2 Earnings call transcript

Good day, everyone, and welcome to today's RH Second Quarter 2024 Earnings Call. [Operator Instructions] Please note, today's call will be recorded. [Operator Instructions] It is now my pleasure to turn the conference over to Allison Malkin of ICR. Please go ahead.

Thank you. everyone. afternoon, Good joining Earnings for our quarter second Thank Call. us XXXX Conference fiscal you for

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

you issued today. involve actual and I and to well statements outlook to like release affect statements description release we These start, that our differ about uncertainties the make today meaning detailed the within statements filings, more press other of SEC in of are certain refer legal press may Securities risks our of we Before forward-looking issued risk of the results. number a will a to remind Federal that today Please matters disclaimer, of referenced could would that forward-looking as the business results that cause our our our our Laws, for as materially. including factors

of forward-looking of no this our any note reflect opinion that also impact in events. adjust these financial revision GAAP to to which revise Also, as obligation and eliminate may these discuss call, new call, the items. light or publicly information only results Please non-GAAP measures, or forward-looking our to results release of during of of statements we statements certain this the future date we the undertake

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

and joining shareholder afternoon, I everyone. Thank our start open questions. call call. Great. our for letter the prepared will comments Allison. Thank you with Good for and then you,

report To the operating accelerated finishing margins housing month continued with partners in the third are gaining quarter August the challenging up in shareholders, XX%. inflect positive second our decades. X product Demand to into XX% in to up most demand each despite with and pleased July has and up and that was positive, market X% we people, momentum quarter inflecting

and market building the Our are significant global North prolific investments expansion America, share gaining now the product Australia in foundation history over in in expansion decade. resulting platform for our RH next and while in Middle our Europe, the across the long-term East most transformation

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questions. we'll open call Operator, the now to

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Yes.

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I Southern to force think dominant it's be a going disruptive and throughout California.

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that's yes. So anyway,

next Zaccone Citi. to Steven move We'll with

would to because the there's XX% newness. that year, assortment point And of wanted to assortment a I this new. you the lot talk I been about of be product XX% last gave think

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Sure. question. Thanks, Stephen. Good

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with Forbes to Securities. We'll Steven Guggenheim move next

call, right, the assortment, Gary, we the tiers last top, collections. the briefly new of middle, discussed, bottom idea of

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with next to TD Cowen. move Max We'll Rakhlenko

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to next move We'll . Stifel. Andrew with Carter

design here, position wanted to in to you're know design plus Are with that a year the you guidance hit about the I think cadence going your I hit to bit you're little in a galleries studio. I types? every reiterated a X ask -- prioritization. this you've markets kind And design gallery all the today. international, white to Where space scope for white markets fit that? are still And know of talking space I about little the within do more in year?

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Great.

Looking Newport Beach. forward to

move Jonathan to with We'll next Jefferies. Matuszewski

one is first on Gary, housing. just

category if Fed are luxury investors trying eventual your nonluxury cohorts, will so, points. the think income cut across perspective you reacting furniture see you to And recovery the just reacting housing impact Do so I homes maybe how luxury relative maybe in housing that wanted understand see price to rate how quickly? to housing spend different more why?

gap of I are gap. prices when far to up and of think points a that very rates. low And just at of in expensive. people And see do too lot got that the the And XX% I you mortgage people lot a rate about, or XX a affordability does got are how XX basis how close price gap. pre-COVID or basis I it again, the there's -- big then And mean waiting, there's room. X -- I mean the that the pent-up interest housing -- families are mean affordability -- locked a enough really XX-something and a the much I mean too they are U.S. want people cuts here. I what, really home, think getting average we yes, to demand. lot affordability expanded, going the more is, need expensive, of close want percent versus of people waiting, move we points. is house, new is buildup of

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And quick just Jack. follow-up, a

year. the a It this little looks the on international investment like bit. headwind up Just ticked

that you what was being incremental of kind Yes. a for are previously contextualize in that. versus made could if international Just planned? there Is investments any

in plays and than approximately as [ the the lower, just you XXX see were ZIP came we refining and sales Yes. Good out the little growth. down question, that set ], sales visibility of Jonathan. number to year greater we a giving Yes, refining we a and number [indiscernible] had

the So and just impact. sales overall down coming

We'll move next Markets. with KeyBanc Capital to Thomas Brad

Great. as business? wondering of that are give you you and update Gary, an if you're comments made us some was you've about but year on of some touched in X how locations? you've that other a bit lap of points the And how on international data the these just of some trajectory answers, could feeling how the I you coming anniversary in

look, going to mean, all get they're better. I Yes.

after opened here next a it's spring, real together think I plays our job conversation we London X And Spring X. the opened buildings complex then up hopefully, Paris Yes. at next have happens. we that We Ones that. year. late to and fingers, string cross fall Milan out.

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to next move Michael UBS. Lasser We'll with

guidance, and to is you everything changes as updated of much if than than at lower the executing the you being previously look expected what demand were how anticipated. there to some expected, a part be Or to to a demand had the the reduction Gary, a as that introductions was strong of little that, shaping be not you if due of could the is And is response in little in as demand was up spread and then introduced? slower sales? between ramp slower a market benefit

good questions. Yes. Michael, Well, so all

So the in So bit thanks. dealing of of I of this. me to a really it, like is a which of lot say slower, caused right, be ramp I one, the I'd first would questions say all think say right? one, little let what kind -- so to with

we don't strong is The market as think that relevant. not I first not The relevant. as one, expected. was

and see the takes I time like marinate to consumer it the of at more it this just think kind books get kind takes to in for time of home the it's to home. might get

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more So you've got all kind gave demand. why you from this can have some more That's points there. so actually out of to you I reference and I bread months in build comparability. put

Nobody -- demand our right right hard has demand indisputable. to it's now. now. Nobody that's so And is close

they stuff. don't said, don't ago ]. we of share. We mix that's a Day they heavy don't [ guess, versus we don't cluttered that. what looks got like out big but And We've are kind we waiting you holidays, X ] -- right? So around Halloween celebrate bouncing Christmas, that's furniture-based We yes, how that. of or think the stuff. right? I or my it we'll we and mean sure top. not we we're defense. industry I industry. and X categories, better a down Valentine's and of not we a broader hey, much And stuff the the a And XX if stuff, now in as looks still than And lot [ X like in included ] -- And It's a we were accessories business. got it's sell pump so -- not don't never they have industry of [ just [ industry around if home it's when any furniture it's of like negative saying is negative and no table the I'm have were are are like I'm down any Hanika or [indiscernible] people right? industry. came all characterized no at business so about of don't the taking the just They're no so sell we're more ] again. Thanksgiving XX businesses right? that look, that's if top the and ], market up like burners, -- know. [ former We but [ And company cable I furniture number, good I We I us a they can know X doing have. anchor said, any furniture, stuff. it We know ]. any kind that any got sell that furnishings don't down --

space our the with who you a you yet, learn, of make pages and of You where all the home at. industry and estimate book percent They estimate we're is, size. of an are count products giftable can right at important I other look If could an are that what thing would could look things at you to the might and high an what don't anchoring I some at us furniture the I'm do analysis, spend categories do or you sure know. categories. get But of But the on business of get right? you and our percent thing you now, end those little. like

thing anchoring lot us of or a of that businesses. Don't of lot against a tabletop and this The us not for -- stuff people very little important accessories business. against is in anchor those we're people. all selling holiday

table them. have tiled We stuff with on any dining

maybe us You massive. table beautiful have dining industry you a the But massive compare a centerpiece see if that. like we a or really inflection like with to point, something

we categories walk was How when much border high-end and we business the doesn't dominate. so be to of room, mean you you was in kind what on saying biggest say, in And I rug? business. look the the much the cabinet, anywhere room. you It home what much a big the the took this of the room businesses I at won't that Okay, you the many said a a big flatware if was have the in every no, it business amount those maybe you And was million and furniture, But decided have call might you and the that's How decided How to a through you the much the shares? place craft. lot try in cluttered side do all It's were and no open pad It's businesses the not it was table? is was home the like room dining let how really stores percentage. close to of a just they to say furniture, we've and business and in watch table? dishes not this earlier we to the call We to. again. -- -- dominant if -- how of our much at tabletop rug it's pencil the to to craft, textile I'm that, edited we today. And lighting, and in smaller Chandelier? under $XXX billion Board a outdoor we've be me side with and do much probably How we're paper edited of the would at the so cabinet amount $X going businesses. not have but that tap in, realize rugs, about if

businesses and at? that those People go are out down. goes You got gifts. now treating comes stuff, right And businesses celebrate something stuff the way you give need world it. kids But that that treating. means Like Valentine's they the at Christmas That everybody or trick we when is not saying up don't much. for stuff to to tricker spreads are always just have people tough Yes. Halloween go What best or really is a spreads, up like you the [indiscernible]? Santa the everybody in down don't or and Does all Those come? to? lifts, bit to business you when Does your do. it of be what it's the are home here. back, the trying look when little business housing selling

a So be to businesses, if less got fix. you've those bunch you're of going

like us housing everybody than than better do demand like have That's us You're the margin. a we from why going we and I not to bounced back, benefit as market I right? else better on also else. everybody much inflection as because

coming. pipeline credible have We

all of We going kinds inflection they beginning dominant. and their chandeliers people better ticket to have the furniture compared platform only And -- start to really all table covered more our Craft Halloween. things. those dining measure incredible total and see and when It's an and big that's become to buying Halloween all selling rugs and stuff then during with

in continue things and those world add mistakes, I'm best have tissue but So the we're you We've the to to What like say, made more we've focus going got -- the businesses, get are scar it's to at saying we've be like not this to in you are to you going going businesses to that. own? what all focused. be world to and hard learned recent best horrible are in

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expect and to could rates when the is question the of Maybe I you the reframe second demand growth part do revenue, converge?

because I don't down, Oh, we made comes on ] be [ kind the but can quarterly good of could backlog, right? demand like number timing right, X a So lowered [ right? we [ also like come down and narrower, modified the backlog, X projected depending actually ] bounce. the that really gap If ] of things. look, a gas sheet, It demand -- it's to know, you will balance good point, it's

we've pays. it back lead So of do but -- a long partners and everybody for react but it's chaos. of as just the next to far be it orders, we -- and I yes, we're be, regulate we chaos have of break like end converge. the beautiful What start to times about in -- just I the will mean we more, is out as and will gaps create like newness really important, all in you books like focused, think won't when speed going it's chaotic a think as it's through. everybody, And order to from great beautiful to year, our I kind know, a will then becomes did. a right, partners. Like beam trying big our demand, many imbalances be that thing to powerful that's when won't ad don't those It have want what we the

never but I I right? model really give to didn't And look, didn't I we demand you're this don't -- we I any no -- not Like stuff very like we're I hard job what our demand. the we know. off -- build before we and give right able thought build business why -- wouldn't That's now the one's So is yes, analyze to model. need demand. give we'll -- right we were to inflection data. the give you on now, but be -- guided -- Like We good, going trying going your to through. can't with

be and And working completely honest And so not we're trying to be to data transparent what's what's and important more time. the what's going working. about and give you take

and right. -- anything the not all moves career. get on what miss races. in you there That's generally on that then only there's what sell can the I perfect. walls shows, million that timing how It's completely s***** generally the $XX to not do. and -- was building see I It's business. to the for for wrong a direction -- good well cap laundry right I us and like, I'm off except this and to totally business wrong. really shakes that you We're What idea, business, get go side strategically never Oxydol refining today. and get do yes, I closing? else directionally it's you seen it's was a just We're right, fine, moves, best from different we -- a like -- we're pretty them." had the things. big again, a seller more we're a we at is got God, brand going do a mean, business. we The -- okay, vector someone into the detergent some directionally good than getting And right. square a and to how it. don't being us then to you big dumb." know where art footage vector directionally And this big "Oh, that about I market like, I and And one are and mastered We're growing I "Oh, done that's it's that. seller, I selling contemporary this So right like, mean? floors. that mean, do who's this for like going I It's call wall man, even a no. only and got my thought you I've best mean, you I We're but like, like is once you're there. magnitude for long time. like get to It's haven't you get sell and going of one We're realized

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Seth to next with Wedbush Securities. Basham move We'll

one I question, have one follow-up.

point more you and that meaningful the color going momentum XX-Q that's a your was of to can your more to in size in whether the become bit the near mentioned hoping is on overall business growing. the little and contract you there First, I provide any at company that future?

look, to RH going all and and more everything that more Well, business better. to and core if buying brand, Yes. get business. is powerful stronger than and things coming the More -- be the powerful begins right, business and so will And stronger our everything with ends forth. business gets hospitality will contract that galleries than of the people so are

about we've right? and to thinking And [indiscernible] going I if demand and got have so up, more outlet are mean contracts. you're returns. If business, we've great And teams is been sales up,

right lead like more outlet the from dog have will formation fly inventory past more business It's core creating Like And on you all everything the those clearing returns, the generally And like the geese is You right? core business. the business. that -- the stuff is front. growth. and core outlet that. the the something have lead business. -- at and the businesses The sled benefit or like trailed in else --

core kind the the right maybe That's businesses an be maybe have Yes. possible makes to would makes tailwind, that a I But other than outlet not business, to all business benefit graph out out of it what's It other it's as obvious, not. it we're core possible breaking business there so other in. to -- the the yes, And an that coming demand -- And firm the makes have stronger happening And think we're right? Sure. so Is business. any in possible now. core? the opportunity right if demands. but from brand they're contract it but have

for see, so and the brand lessons the now. it's you'll the you're Baby RH last So now. Baby we're see from & looks great incredible, would build business. Our don't recently spaces many the so the & esthetically Child, Child I and reasons happening we book just excited the all and an wasn't things, mailed an emulating galleries There right? -- what's and saw of if restaurant all there's you the Child right & is possible to RH we in our team core, know there be But Baby kind starting

path core the everything it else inflection to will it. else, create where the and the bring matter got everything everything It's You planning. clear will follow, a just in it with of

certain, something all -- I to right? almost would with could but the core going wrong, could be pop -- be kind of is say, But up. So you and the all, core than expect, here will the I they'll could could and all we So Hermes. core there. back higher but everything catch But growth come lead will business else. demand it it into

Got points than is than quarter. this increased percentage you. second sales faster question And on XX then which more my inventory,

this some that about can color more persist would the to least things, But the to sales talked And be expect is quarters? other miles growth of growth You provide as for of why. at this inventory we how helpful. any really relatedly, you next outsized and should few for much reasons

lot do to you and of there and all things transition the of make like how How here of Like bridge this insurance you build run kind the there? a is it do right? Yes, out not a [indiscernible] out to of drop business. kind before you from

You just expect for this. were coming

-- before. like so done and you're this And learning big every in transition this never know a time you

where things. we're exactly here know that you math oh, what to do know from we doing directionally we're do yes, now. and policy, to it, we're We're that going But optimal an insurance the like get fast, going. We early of kind new optimize? And too We make So and out hold we're and and don't learn saying, going. like, and of learnings to then we with percentages exactly where to we're pieces had for inventory there. like the where So we're up all going. are there's -- how And them like we call the get gosh, on, getting learning. where how the

And so to as I say. we you'll learn, like learn,

quo, next we wish I'd we're status to I I'd year, what's and never I'd you because not it's mean answer got telling precise don't really organizing be I next and but had we I a what mean range see then really So -- had I wish the here happen managers. going really quarter do. a I would were in I manager. accurate we be if

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days. and We have ways of adventures, brighter pursuit better

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so grow. we play and that's go how learn of that's that's And where we and we we and kind where that's how

boy, we're us good learning. data move direction we some want I faster now, really learned tell here. answers, that's directional out just up give to I I give sometimes do So helping winded, I'm longer like a sorry, and can't And go. like answers figuring the here, and like buttoned got these but conceptual you so more and that's accurately we've what we it kind of right you towards lot. we're we

does closing gentlemen, CEO, Gary our remarks. back question-and-answer and conclude now to to any would this ladies session. it turn and Friedman And for Chairman like I

think you I just and time learned at everyone. and be people a on Thank just the RH you've here, do and we've it's all thank great hopefully Thanks as Great. our team time like for and so interest your learned we levels. world, to -- around it's your partners and

we're and growing day all working I energy, lot of And all here us a of takes and a egos so and the something think commitment. a stronger lot we're room. it culture is in us. of together. of going. incredible because and we're [indiscernible] the of a all to the build game of than every And together brands We're getting much going none the and out and learning lot smarter courage and of And together takes it lot we're effort are

everyone a you, a ride. here. be thank to really to going on life brought be the ride it's It's externally, to So team fun from you've and this going and internally fun

everybody look So to forward soon. [indiscernible]. And with speaking yes

This you participation. program. your does for conclude today's Thank

disconnect any may wonderful at a and have evening. You time