RH (RH) 12 Dec 242025 Q3 Earnings call transcript

Hello, and welcome to the RH Third Quarter Fiscal 2024 Earnings Call. [Operator Instructions]. I would now like to turn the call over to Allison Malkin of ICR.

You may begin.

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

may Also, which adjusts during eliminate financial non-GAAP of we this items. certain our the call, measures, discuss GAAP impact results to

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

turn the call I'll With over to that, Gary.

will was in Allison, hour. the released letter our and shareholder with you, start Thank welcome, last everyone. I Great. that

years. partners demand XX% XX of and The housing To quarter operating gain to business our momentum our market despite in in increasing with worst third inflection the continued positive people, shareholders.

platform as transformation most Our both November prolific demand vector XX% with and magnitude to expansion history unfold. industry of in direction our in up the continues is increasing the product and

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[Operator Instructions].

first Your comes UBS. line Michael from the Lasser of question with

obviously Your outperformance industry has been relative the very to wide.

you the that this further that so And thinking you even accelerating would willing advantage to So if you're case, that some accelerate your some margins meant still sales. of of if investments be suppressed you how about are such were XXXX? in the trade that it would taking you making margins, were

investment like? is are harvesting How industry. What back business cycle I term. it's the hunkering harvesting of people about you for term time look is short like? business I long a look investments. interesting time always Generally, Kind think back versus in paths. like a leaders. different an And that's think our There's down is people pulled multiple time, to Michael, thinking an the a what question pursuing or this

you on other market side. because in to period. gain the this been the to usually If has other our side history, share the downturn of the at market potential significant the investment housing always an looked leads

real So investments in look not the but behind us, that into most is us. platform to most significant. We would Even a today, ago. the as forward, Paris remain. would cash and are the XX into have But behind RH we Europe, RH spend the years to of Europe initial don't of London we be product couple months investments the investments is view a I significant early to just we've some do made significant over the more, because investments investments launch we have of say with as area think be pretty transform effort the of the and last able right? business began to put that a

you and is the at are us. up at we ramping to levels the today muscle So operate need building that really that operating behind are

about If kind technically mean the in brand just new today, that launch most pipeline. of discussing, of the extension, you could up. is it think product we I it we're significant polishing we're

So investments But kind based it's based investing growth, company invention on and innovation. if It's our us. based and of you into are those will. behind the on future mostly is on

ideas. They the of don't soon of concept, this is linking that pretty That's model they that of say evolve year retail kind time. it. a going like They XX retailers a retail that get and because expand years innovate. most happens over a X XX They I'd nothing one open a mall get it. they we're right, year, don't by. to goes of a these things graveyard to to brands but enough open generally for So new short-lived

a and a and mall of hasn't about evolves XX take retail that's like rollout of and mall years retail of the and of snapshot even years a somebody of back the dated, because it has been today, make or invention XX% focus brands of over all to all look And it don't the look of they're there's you tired been why if most duplication. XXX lease. the there a XX kind term range XX And their years, focus and lease. XX to full to a of every And term last look don't retail innovation, at of stores, they're lot retailers and and XXX

this my on is in We've So different This year. now. we're that somewhat been right? nature, journey XXth

And and was of we out brand. kind up again, numbers think started And into and deleverage of today, just, to made. now dig But it if of put bankrupt to kind a a a operating out. a up we've the you basically try that lot the right? you of been a we business, of investments if of because building we have right? look current way We investment. the pursuing build a path had at there's we've kind and we've luxury bigger then context considerable taken built we've significant and motor platform underground, climb had luxury took a business and grade, the So our been about will, the that's And model

of cash investments behind are All us. the

model. really increasing forward building And capital cash galleries. the think brand see about years, I significant beyond I see flow I iconic don't significantly the so of over next of compounding couple I and kind investments look the cash and flow

so door forth. out view, of so Paris in and on from London and and point the mostly company cash the is But even the that and

a the of to Because investments. on think forward. about our probably and a you're EBITDA at focus cash drag might believe the going going to going that's way as story. depreciation mode ever have generation, a looking we EBITDA and it's model you that's ours. how model of you our depressed because it, relative right? to has think built, look a different that's never margin be were kind of to nobody serious lot important adjusted margin, that's made flow forward Amazon else why no adjusted build because like going we've And It's on be I Some in it to had than model a years investment a to for to then. platform see right many they

just we've years the the are with product XX, of the last that about If about platform. the what I through in the number transformation Think significant inventory our over back industry. we several build you about galleries our and business we've go have think think If or XX a unlike think that over that. takes built to we've about takes last Nobody gone anything the ours to XX the and front-load in investments [indiscernible] investments it investments like inventory. made years,

to you about kind think of invest the create an have are. from So right? kind inventory you add and to the to inflection, bridge where where into can that inventory of you then to you were

transition So you from ditch products new don't current to create products. a you as

a All investment and model. of short-term distorts somewhat that view of the is our serious cycle

I take time. right, of vector think you the behind which magnitude chart out that about kind a us. increasing, kind And being significant cycle of of direction. you and in vector, investment think amount if significantly over is And just

You out come, our this over look X, X, of which in over like then you the us experience. with and in today accelerating the next the to right? And kind our it's out could market, model X most housing if years. what history next out I you an seen you depressed housing X, will have X compound appreciate look of a mean of years. might as market, the in position have we're history any the plot

the question business -- And seen. a, it look follow-up market the should my that does is to will of improve as helpful. assumption years, is, that your the an Very baseline the you. next lead acceleration over you've housing we recent trajectory out think couple as in Got of we

of should couple the about of been over at under will about like sales that growth seen margin that you've pressure. of and have recently? how same pacing sales RH as last next the we the as margins b, Is that year pace given reference we to think the of years it And sharpness beyond. degree start maintains experienced has frame recover as decline to think of model the So right

only a spike, might I that's kind it market X% think it marked might of what mean, net worth? the worth It's right. question is but is out I not you market over right? And worth comes just it growth. likely it the Yes, back. it's will back directionally XX% years, that when the couple can like housing start worth you of see see XX, to compound housing might and come compounds XX%, might

You you several years, about are could think renters, and how about between depressed significant people built XX% that rates, relocating, if stand expanding so interest it interest how forth see have low so into right? growth families, wanted people people into for turning for rates. And potential to how the how because on think and of long. many We and demand locked many gap move

have I stays to just hope that's when housing about of sometimes it the talk does. less year. gain hey, for that's it evolve, more We'll lot competitors I market change internally market that. ambivalent does. going going Quite frankly, it lot exactly happens, that's We'll if flat to a So a share kind about if we're another

X everything he easy the business the So after X, for especially an home years you a I'm lot bad is capital what really mean the future years X last XX about biters is, of and that position of will brand comes if and raise could look it a housing X, because a like the in thing like easily way COVID, looking over because good ours, not pre-COVID, the housing COVID, necessarily enthusiastic online could think actually kind was to market market about when we're ankle great able years capital a and start the someone back before brand. raise

some that that marketing to on more and forth. shop. so in places [ proliferation all competition, housing of is the ], And market. competitors more been people on there's more online people a marketing just and of Instagram or marketing. There's growth so right? And There's There's

bankrupt say the bankrupt I bankruptcies probably one out because now of public or say them. a almost it brands bought remember that see very the been bought online can't of lot of There's I'd of to a bunch aggregators, of I anyway. name of that's or there's shrinking a kind You of quickly. need don't couple and bankruptcy

know they You are. guys probably who

[indiscernible] two Yes. create But says drunk doesn't leaning the of ably canceled a better people lead bar kind outside situation. against

bad I with for term. through that you work. to long anybody brands marriage, think multiple So mean, take and on look leverage kind the it's and I usually Overstock.com aggregation, look situation doesn't over that think Beyond. good Bath the at betting Bed going them together and I put it recent of mean, I hope &

to there side. we many opportunities. market there's down, on would So based market our -- people housing if be going yes, the struggling so to think other more stays in opportunity that, are the of the levels there's There's in more furnishings housing going the market, there's furniture be home market. And

to I of ask mature our the last when a more of regardless right? brand So and lead size has scale time share X out really XX yourself, everything. What few is points market that points, points Track years. over market completely like? good. That than created XX points a points a happening outstanding. XX considered be XX mean is would next or inflection can our be look change it's the would X in considered

The with JPMorgan. from question comes Christopher next Horvers

Thanks.

X-parter. my So keep question I'll to a

that the you're quarter-to-date? some of there And just business your then to The the quarter is, about proceeding seeing the quarter? below few Is of of back? through seasonality caution question fourth margin you're newness, that a your in introduce put clearance this all it of past Is clearance time you over to you've is can XX% the part second get lot year. years expectation newness Is that sort the think first what behalf? that on guiding this

is depends Good December a question. on think guide, The kind and plays the January of out. what is how guide rest of correct we but

it bounces XX% our of and business between XX% So roughly XX%.

core you core is about et like if et our Waterworks, of businesses brand, kind just & things outlet, might the think kind we transformation. won't no and able different the accelerate should impacted outlined RH been do than not be things Kind is think like if those that that to you brand product think those in cetera. we some it. how And contract X/X of many Child then our another right? that the are brand, scaled by businesses. to cetera, Baby about Waters But not other them. and of I And other pull back have Obviously, will letter the other teen, the they have our accelerating past, Dmitriy, of business platform of enable in -- waterworks that our

the of mix, whole competitive always as in Is housing all an the bad of percentage, housing to more is mix. the to It third full be our was The our percentage full if bigger on And set have clearance. the look it obvious, market at XX% say going as as in the the be at are years, look that under or clearance be we a industry -- would a business core Sure. price, course, Is like it, okay? during -- right? the firm But business a to today, at would the business yes. have have in just really of spend the at of XX-XX, amount I of price? over today, you XX-XX, market, love business 'XX, as of market. like housing you if part a may the looked pressure about will our market, grasp is. to I you XXXX, history of part XX% than there's markdown. would an would XX% quarter clearance the XX-XX Those if markdown be is about business, a at but our XX-XX it good say general up Love in a fluctuate XX. low could our

necessarily, the in But letter, take read more the doing you've other if is think seen of mode, of an design not right you we're we're It's quality room, point of game the nature it's market think attack doing game, today. -- a our brand. and talk value to that's there couple looking a And playing value clearance what of ability out we that if a oxygen now. a is that And the that's yes, a thing you disruptive an view. view you of years we're of at view, more the but the my will, playing kind it's disrupting of us from past gain. point And hear point much of into about and I me quality design move by

little we and maybe of scale, on efficiencies pressure bit grow inherent that's a But initially. right? are, putting as So like there's you margin

you look market and But think you leverage you the expand oxygen margins, through might the margin today, us do And we right? then leverage taking from talking putting future point if leverage of the our I room, the vendor higher place to own also I our partners. demand product, get our throughout think those like, own our back view, you some the could out and am platform, to line about manufacturing. ordering think We partners we're partners, platform, to about say into and orders much creating in top the if get platform. So if trends that a the investments be have are about when get manufacturing continuing what our going the taking the in at of about manufacturing going model the business the of share, in

upholstery in don't platform. we own cetera, et cetera, We have the but North mostly a manufacturing Carolina, et factory

is and But and partners if pricing, forth. where where margin, of scale we can we're talk company. pricing better about you're about their our we and better And a so partner we interface one so disruptive on ours, like leverage with talk more create

now, sales. than is harvest and competitors a the is Different take people business taking paths. to and different it in think time I to able lower disruptive are better it invest pricing right

running or X% share down be the in leverage lots market side It position. Some people right, up this do and up significantly are now. expanding could time. leverage margins stronger of taking that, share, my trending business We right to up -- will giving I'd take that, market of -- and margin trying other giving lots XX% during they're and harvesting, market up will there X%, too. operating RH been be and too. do rather of We a could XX. core share not on

from of next line the The comes Simeon Gutman Stanley. with question Morgan

is Zack Simeon. on for This

free the and of RH positive? cash some when needs earlier, of about you to And self-funded? flow you free follow-up, the as on you think Following the flow business turn cash be can up expect commentary speak funding how a to do can it whether

think of oh, have if at about right? Yes, our we exponentially it any we centers debt. we physical you any Yes, don't anything. money. didn't at think the swap, So believe spend able exchanged it can valuable to We I debt building swap. believe currency the think liquid more next more debt, didn't didn't the is with currency, We look debt we right? turn as currency somewhat really of we'll year, we'll it is build We turn debt. our business. our debt look differently. assets. our the on didn't mean independently, for We say, a We is. free stock, of be our part cash buy tomorrow. can which they we a buy didn't flow about lot debt as self-fund at an right? positive, buy significant a our it currency with and cash what We any We stock you distribution One, highly into currency, We

growth trading return, to But So significantly right? the we've believe, investment closing that into of the debt, have we stock. market, at cost significantly, debt will took we in based if an is you look on debt, trends turned dollars sheet exponentially. balance price we investment on several we million on hundred that at business the our So and figure, that that on investment for expected after exchanged stock currency hours, don't based already because mean billion cash. stock needed looks $X.X grow our we the return post our housing today. and interest Today, our I our where we've on on made

do debt to undervalued. purchase to was We we on because balance wanted wanted of have sheet our stock part a meaningful a when currency it exchange. our We

now. X.X bought of million the we average [indiscernible]. think after where is price million, an right I know is $XXX stock at I our don't shares

pretty would cost of our like capital mean that's [indiscernible]. over that return we So that something what's I be? good a that return period,

first we've time we've this done So done look, This not this. before. the is

we the have our taking debt, and for significant exchanged If single stock the I shareholder company. at created you about way That's largest look I'm it. think it our history, the in value for shareholders.

comes Zaccone Citi. next The with from Stephen question

competitive drivers the you help just understand I Congrats do really acceleration if do Why to wide if such margin? and curious, do positioning? you momentum. about was that product? in back business. could the what's 'XX think feel How positioned in the well us accelerated the with stronger you the a And industry on scale by outperforming fulfill higher the of changed demand. you're think Gary, really comes your you're you the industry

we think a it's I the outperforming. have I I far, don't Well, letter, the we're on competitive lot mean that have everything to we know a is letter. lot than say there's thus commented if think advantages. why believe in I in more what's we of what might

than a that platform in anybody have better we industry. the We significantly, else is believe,

and far-reaching. said and with of believe better are we is And taste in no industry. We we have I've taste [ idea large anybody those those taste scale ]. than product the scaling with the taste scale believe, there that no before, savvy capabilities, and and

our the the taste demonstrated We source that and level. our books, pace platform business, our separation to we scale ability products to the ability but go forth. over we products, than and built, lucrative demonstrated not product website, pace curate for to business we I of So think, be believe better to that's is long to doing. present and through our on galleries our so disruptive and highly continue strategic anyone believe based aspects our thus product capabilities the level we're And profitability have We the we'll run. our we're and physical our size so building the ability demonstrated in going the and what a our integrate that through of create ability only far, And to forward. curate at scaling taste, world, and as

been we what we've has like right? at product you what our of XX advantage. core, So huge has because our haven't call seen are built. That that's anything That's a and That's building. the schedule recommend, try nobody center to yes, it. It's this who but that do. anybody on years we spent innovation it leadership competitive And --

breaks strategically the the about market. way Our and methodology in strategically we the about is clutter integrate view point through into categories think we focused the the way a think categories that singular way business, of we the

are reasons those of outperforming. All we're why

off moved you and -- [indiscernible], down shutting goods. had and COVID. the forth. off business time we that another engine a So during orders the from so COVID let's factories XX% to I Then look, on had a turned orders. as up points. COVID. XX% down talked because the And the cycle products to were The shut the so business I've in went the we beginning year. we of or of we getting When made, cut XX I just product about hard engine we couldn't for strategic went mistake product Then the XX%. when cut get down

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the out play quarter, that the The seeing how the I product in When just margin gross over about fourth balance you you inflection the quarter? August had And did margin. how about a Understood. we margin. follow-up quarter? maybe is product positive talked on reported should of think in last

out Yes. We margin still the of selling stock. is positive. margin, adjustments was at demand have level Waterworks the below product marked did

of product of we ship you calories our market did outside stock. box, generally not such I big it's a thing. our think transformations the some had good we When that bigger

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optimally it product in just some rebalanced to our positioned. just DCs also We get

So...

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basis, inflected on a And were selling also on quarter margin the The shift basis shipped it's demand said basis. positive. on in Gary margins a margin a

with next is Guggenheim. from Forbes The question Steven

number just X-part of the given the next question over the a planned here. openings sort couple maybe of Gary, real years of planned sheer on estate, --

pipeline with what payback maybe start, relative past? how classes the can years, and store-level uniqueness of maybe So and past the in galleries pressures normalize the then in couple evolve that over the cost discussions model the developers how landlords you've the to of pro spoken and forma with of speak evolve? and you to these of your you're developers to And seen have the sort maybe is to periods expecting itself, ROI landlords just in conversation you have

So had things it the Xx. to right built raw was stopped X OICs. started anything start X during to with I number during you [indiscernible] in where wasn't Xx think, our that's believe payback Historically, said, pay We number, the yes, in or the COVID, X and years. we COVID, right material of, go X right? back Because let's times, being up or and built some costs places X still

significantly COVID of any during somewhere retail XXX% built up building between you're sense, in more. in and to higher. more business or was if anything matter XX% say So I'd expensive a are costs no to Xx at kind general level, today build any

like a the our gallery to lift. expectation sales. The than iconic have cost returning say, ones or build years, pipeline London but years. that paybacks relatively an have So will in galleries, we take more the But us might news And today it in our most demand a and Paris be we might housing really significant it have we of market the opening I'd and is X they quick inflection for good did. X we're maybe the today take X

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could be massively So think it I I mean, accretive.

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be you're fifth keep inning in might asking what me you'll in, inning. third perpetually and to the there So I

from I'll can keep now? of road the and some years you've harvesting just profits are the on you're that or thinking previously couple the of just making that in your How a mind. about past. thinking down the about magnitude comments you go margins And where then made investments about in

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so up just the the ramp we So in all and with pretty have I'd pipeline scale a the Europe, build a you're -- But phase that. the and I say cycle we launch investment not product that to so that making. right? partnerships also organization the investment onetime do but and mean of and and to forth that's to build kind in big and do massive just went

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know, I anything retailer We're long of only kind XXX don't a like for that. the miles go way like, our I to

be forward? model to market. I margins housing where regular of mean So the think a think ought a going on depth in basis it's the we I margin -- also we're bad

you and housing we've -- X%, to the looking That's growing yet. model you're homes maybe And right? a kind at cat margin And looking where actually increased you're market it it's if see the a now, shifted market the right investment at cycle, model, in, dead not bottom does, will look right? somebody be. start a benefit on absolutely So you're our cycle model based like you'll ever margin also bounce, margins. bases it we'll said, and cycle, it's margin at not But when yet from well, housing has investment probably bad been a biggest meaningfully significant of at looking oh,

from America. of The with Curt question comes next Nagle Bank

at trends. Just equalize terms on a couple When about right revenue And half that. a demand of just maybe similar the ones. And gap looking in after when 'XX, the in more Is we should first or hold we're it seeing of One, follow-up roughly XQ? should should narrow? thinking the something the of these math? that to specifically, what

That's a good question.

it's I think going it's start narrow. to to going yes, -- to

of that Our in gap. more invested inventory close We stocks better. to are getting kind

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That does a problem high-class it. happen. would Got guess, that be, I

think for has demand BXB guess, this a synergies with core the base. you, you said, business, think the through expansion and trying to acceleration for stages the just one, Waterworks Gary, which strong Second in as product potential trade very but core business, early of I here, customer I

Yes. Sure.

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us be when big that's We can it it think be? how idea, we looks we like So big of kind idea think $X going to track billion it to out.

drives Returns synergies translating as Child much real what And So just retailers Teen best business. Baby designs taking be and are returns. the the don't & synergy. and like then to and sizes the is a those as into going smaller for outlet

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you knowledge, better than becomes your because become more correctly. your you start likely decisions, last you're And more assessing things ideas investing so next have you smarter, more are you're richer, ideas informed, data the wiser better making

answers I So question not. or that know your don't if

Basham comes Seth Securities. Wedbush question The from next with

for point you're sometime early spiral upward seeing you peak it Massively a what question previously inflection My characterize in would the XXXX, lot. as that is product a transformation outwards. right this regarding inflection peak inflection think and you'd talked is outwards. now, Thanks to just extended that

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worse peak inflection got now what So on based know. we

I out. think several years it's

is years you that a growth next think for And few few growth assume going strongest previously, the you're [indiscernible] talked to words. other not I to the of you strong you'll strongest be sort do that being thinking year-over-year growth. years see in but out,

strongest more what that's our data this We external as or and We enough for growth like bigger. point we rooms, about the consumers. of some into of about opportunity kind say for certain something ways, think transformation. small. is specialty example, bigger see size I think year because talked reframed still of not early right, is think of the product a internal be can more probably said, to development classical us aesthetics. brand, see year I see X market, product called RH. year about of we It's supercycle, more of In we the a in I significantly much homes, the more see amount I might new done haven't I'd the way we coming, be I see market meaningful. a a And with view. differently. never think a we say stages this look, our We the everything about We completely ago, to consumer, team the kind it, partners. and for the It's are a the significant brand extent significant. we've

us last I over this do at we XX how How years. brand. of the specialty point said this probably that's And build view I a looked grow aesthetic with certain and brand

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maybe taste, nuances platform team the for us us I'm the to see not and beginning is see beginning brand. just now what the a to say as I'd is

you I think or marketplaces. a think about about know, is marketplace. platforms So don't mean, I Wayfair

don't platform it Somewhat and all driving nothing unique brand, and so it's it's things. course, but about product. things right? that's we sell marketplace for billion available the so really a There's recognized Not else. It's but is furniture, not certain that, their they $XX is everywhere product it like a of some on of forth, number in lots of revenue, Wayfair, and

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why it the at thinking. some is think. that's XX% we we are And the XX%, still we're X% right? that? not But grow can or going to think, XX% trajectory core think that continue or or And clearly to longer on see than we trending And up up, may of vector -- I kind based see may that. XX% go you're business shaping running growth I relatively on of know. today. the impossible don't XX% today. on of you you're can top we XX% going to Well, to XX% of top what grow It's we Can oh, to

I a kind we not more how we're the transformation the things and the doing more and we we to because product now and than the The the can we've we the lot development cycle product and And super see, more see see. we're connecting. do. see. of you seen ever right any trying more do, dots we don't I'm of we promising directly more I'm we're of Again, to give trying thinking not guidance. what -- with it kind anything. want share to the just I'm

that can this and you longer upward think a I be were we're exponentially to months ask last so if me of than significantly in And spiral ago. bigger couple

follow-up. Wonderful. And last just

provide more Or billion. beyond over you'll know more it that it significant Is next worth extension is would I adjacent furniture? furniture? $X think there's but within information year, So be you brand

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So we trend -- and coming. we think that think is it's going is to be amplified by a what

next comes Carter Andrew from Stifel. question with The

ask -- there? wanted I you're of up up going kind purchase know around XX%. about there through stock X there of Just this planning quarter. Is inventory I for was again disclosed what Is last points, dollars China. I'm year. in purchase you if Where me in Mexico. there? don't exiting exiting those And talk of safety the inefficiencies if Mexico? wrong, some Could of is ever The that any already on contemplating correct kind you are going? XX% that China know is to that kind and if that you're there your

The correct. everything happening depends I all we're is in The where I'd first we've going? would Mexico. be That say It China. going in part answer. part, last think said where of said, you my that what's

Look, of And It to okay? Donald Art if is play the of Deal, see the The Trump you out. the you The starting wrote negotiating do, will Deal, ever Art you've read if with making moves. should Mexico proactively. what happening Mexican but proactively, making will make moves We're some global will now. Mexico, negotiation a happen I what Where move is we think right tariffs,

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to China, think, threaten become the going military can, States. not I Mexico is next Mexico, the that superpower has a is United So little China can that right? a right? than global different

attacked country which them unique ground United our attacked since States X/XX, military you There internationally a hasn't think some the is boarding basically has So been flying our been our about when. very planes that own attack. a terrorists if buildings, why besides never and that's our home on into

yes. XXXX,

have Why? Because Yes, in exactly. arsenal military we the and nuclear the world. strongest

look, Trump Donald mean, negotiator. So is a I great

world you leverage saying, field without Negotiation playing how use I think and looking impersonation. do the he's at leverage? is

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you're Mexico you don't -- is turned not not for It think going XX% may not to I'm out? do I in it's play going saying want Mexico, happen, have Yes, while. how happen. so profit tariffs. to a you And if don't off. that want may

think too much I we there. have leverage

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For another reason.

of to for So see the a we're big decisions out or negative negotiations lot a U.S. for played becomes going us economy. lot be of a that think there'll I here. don't

of to we I have now, leader has I United right use a that States think America think the knows lot a how leverage. of leverage and

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bit the guest of of just being house, in JV, heavily? as But a don't last are table. Or deemphasized prioritization go kind business? are about talked lean call. of little that flow into cash going those in of thinking external kind of the off of about you the you talked if about mode. massive more know terms prioritization those on You into estate I the it How they're a kind real investments core you terms funded? do a you I know is more the

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do things de-prioritized. But we those have get gallery So opening a there.

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Yes.

from real become right? investment turn it harvesting We'll So a of more into an in to think will Aspen that will JV, cash. the And estate assets start happen. I cycle cycle

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I And core amplify and Aspen always do, we about a more be it the prioritization, and globally amplify the on amplify is brand perceive about see -- how think, think brand, brand. other we're the business, to any brand. all the see whether doing business. or will brand very And valuable, the the make, brand, render the Everything an I core core job JV to people we business in the people how are think building the a good investments iconic

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is setting up Europe But expensive an piece.

that so And or deleveraged so. XXX points basis

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So completely outcome you different a of a view. flow get from cash free point

Brian question from next with Oppenheimer. is The Nagel

Congrats on momentum the the business. within improving

the the a about last And call is you discussed at But you here you -- my say, the Do do helping lot -- follow-up just be a maybe talked here. this. market? lot the clearly, housing you're the the starting on a of, also you're macro signs it Gary, bit to about question, a have early quarters probably talked think you business. But driving product going several it's at So environment. and looking some of the see tonight. business you're about the think let improving new looking or seeing. But and demand the U.S. in of to up sort We trajectory

I don't see our competitors up. giving have been

So are giving ones don't it? I we the know. only

homes? buy there's having issue. pickup. the demand a think a few the wouldn't people and I pent-up more the broad say see numbers macro you'd Otherwise, But Yes. is So a to

people more I optimistic. So think are

more mean market. few I -- housing it's I people the be are is mean most people or growth stepping X% our X%. think there right But a part, -- have there's the now. many industry for might down -- not positive I too that's into that

total better? from we at right? comparable comparable between I demand, even X our that's X-point be little don't And growth point a think But the or demand difference a getting a meaningful. if Maybe. could macro and there's look only is you a basis, from So

the size the meaningful of has time and world of think a that a result I seen. is never transformation well-executed very and targeted what's product

follow-up my That's helpful. question. that, Then just on

like and transformation, to this information. with significant product So said, product regard very -- just the you

forward, in. asked going kind inning question think we're of think I I someone the So before, what

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articulate tried to product, see I the particularly see think think a earlier, to you're bigger offering. market And as to -- opportunity. much product I aggressive it's a I the expanding going approach more much we

it And we direct of the of size not the the early And of here, in mean -- really, I said, early in size of look, the to stores. We not the about right? to We're publicly. days, used are think that's to we how potential assortment kind our assortments about We're our got I I limit to days. think term, the market. we talked they're think I to talk growth. center called the going I going

to the to and going source So we're website merchandise use we're assortment. to beyond of prevent our the stores, X walls going our and that books

post is from in I'd went of it years, have down last today. years we strategy the Modern, that that the are we we where X introduction And XX process. $XXX could how say to call slowed million

see I brand And I earlier, expansion tried of perceived the ourselves articulate think the more product. to as differently. slowdown is I that's newness, think slowdown what we mature, we

I brand we the see bigger. think

product and had expansion, kind down market have transformation the think seen allow as think product specialty that successful not our we to doing. And the fact to I able expansion platform think or a RH by taken I I brand we it's the would with competitors were of world more it's that slowing we been what kept be that not by have shaped a doing traditionally, seen an taste. enter for outcome brand,

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next Jonathan question from Jefferies. Matuszewski with comes The

first for you have comment been just new some related launched. shared some activity X discontinued on hoping is on color you pricing. the the The I product. of collections for helpful clearance could pricing was Gary, to that recently strategy

growth collections talk peak prices you or years by higher X greater from about sales out, velocity? to year-over-year driven maybe X going to new that is the be unit when So

Again, we're learning. both. to going keep Probably now. exactly That's

it see much we is lot a a I bigger just market. think of

value. to We that We have leverage leverage. have can more disruptive use more

more of consumer today, people better other value if and the things of might a galleries what about product It think of rather like think makes you brand brand and versus I Wayfair renders walk you think else, the RH us, perceive and get a style I validated the RH us, of you because chair would competitors, feel dining other X it you have, versus some that buy that valuable. I valuable. by versus you'd our somewhere into is you build buying positioning online brand taste when could perception our halo off would platform at more and the the versus from

brand, brands brand that what brands? do certain that think on of to other on do what buy for, I are. why trust us Why trust And tend it's stands we based values that in we more? trust their And based on kind based we versus them buy, all things of our why

in we we think products today. online. incredible books alone our the in built quality I it's value category as think design value physical I that we've physical nature, article and And perception digital We a and of or presentation source value -- whether consumers, nature experiences. brand authority of tremendous design stands We a the or brands.

competitors? Of do. course, Do we have we

we going competing be emulate to to people to want are. do? So what wouldn't Yes, I on they that. But us try are with

a So market it bigger just to because allows someone would the brand [indiscernible]. have

it's I share than else, us think if buy would rather similar. someone that someone from

I think more. it they value will

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understand. yourself from perception societal valuable render Saying from That's in hey, other you're to my more I doesn't really versus house the people you you RH, I bought if like, house valuable equation people. position your more render the is everything trying in of world. Saying part think, of Yes. got economic don't Wayfair the higher

into give not color Can outperforming. lines any commonalities peers. maybe of relative there's terms if or sure the quick or been price trends particular denominators. That's would really other I'm maybe in of there have us Any follow-up sure that leaning any helpful. any points And other be terms in common then just of aesthetic I'm some product. helpful. you more if on you're to not a flavor

tell about that? I Why would why but that publicly? minute, anybody tell Think I a you for would

Completely respect that.

more. get to trying Just

Yes.

Like why All this I are would that? tell on of call. Yes. our competitors anybody

question Fargo. final Zach Fadem Your from Wells comes with

up versus sheet. appreciate expense, and priority I the comments. appetite something thoughts swap balance for following are your the $X currency investment of earnings Gary, the or on interest any since knocking interest and by in some on expense out the But about constrained else? or debt buybacks

we're significant think investments making to we create right the shareholder most the mean I returns.

share $X right yes, there's So compressing X.X now. debt, but shares. the Yes, less million

trajectory the the have to going years on have from do you million shares now, the X valuable? would of So about you X.X shares now, X the million cash, have is or [indiscernible]. would math rather of and rather out the you have side. less from X years now, to business that be is X.X X to market where about do and What think other to think think from more and have that you And you that years years taken

different would stock back in $X,XXX XXXX, stock where more move. is is to what stock XX% is we to today. be to no it's we we at going the bought worth when it's to and when think exponentially right $X,XXX down the stock math And we're the and bought yes, the than our tell of at going us be be prove than the road price what that doing And our to $X.XX buying going valuable

I maybe I worked from the view I private listen, I the years, investment a maybe than am an for and several very point So business by benefited But learned other about fact I I swaps. currency of differently others know and that from CEOs think for smart about some there's talking was not lot. people, And owned equity do.

we but I'd history. So at -- look again, our

asked don't buybacks. automatic you doing but us mean the I buybacks have like in could question major X, see done 'XX. regular same -- XXXX, And kind we've of X here. You

I smart think very thing It's like not that's an it not looking to investor. a at do.

Now investors. back our and stock we're buying at highs all-time

so decision. And believe this be we to very wise will prove a

in lastly, And to margin I impact on is I appreciate or decision those year sales color XXX galleries? said XXXX? those bps the any the much this until just right thoughts. that right the to And wait there on the of close intention on leases any on then you not Germany, think away renew thoughts How now? constraint And or margin from Europe. Germany? is the

this get Yes. Well, maybe also. those XX we to Germany the give extraordinary, locations or years. we could that. don't to to XX go we London into point. And the the were and at detail, tariffs thought find of look, Paris locations weren't that ready take necessarily years it -- level and But we XX so like have to taken us or locations, but XX lending had locations

In we to we we the locations. thought with from weren't lawsuit open rendering cases, we're we lawsuit, So potential this did, property take even valuable. those started but some when landlord, less we were a faced

we okay, open. said, So let's

to We the Let's wanted the leases not so locations. what for know to those -- have so the said, you those necessarily to this X That's would XX too extend the the Germany, didn't spend and in leases and cases, was but us And but and We right much we this invest out are both not we capital. willing get forth. those right What years. if XX to know London landlords are timing the market to didn't location we brand. do the how locations. and how location? don't launched Not that like we have secure And Paris in we renew rolled wouldn't on Germany.

we be deal doing to this faster had us moved move XX to have But probably would we not. years enabled than

incremental No know rent. extend better in or million to in want there is we are? But it, if so look Do we than at we Do stay that. different -- about that's an those we that? where leases we it. Germany with $XX think investment And there's sure. why better maybe how and I'd That's locations

Again, taking the say, it. may on like have every do something not to looking at gallery now all you we're kind important Germany? And hit a even might have years today. when and investment argue the London to upfront later, But trigger. Paris or we the we We I'd is invest Gallery the have we're Yes. look ones XX not have cost this at it of like aspects to decision, a now you more have and of maybe pulled

So It's people more wind move going and right? better generally, outcomes, up do learn with those to along faster way. that the

noncash open. The that. than more we're charge, still nothing So

and margin at want neutral our be you EBIT operating to next point next and to operating cash level EBIT of view. year, If an going to at it's margin level business year, a look accretive on

all call remarks. closing the turn we Friedman questions. I'll the for have is time to for That Gary

I have our of product want Great. say hard it. Thank teams time over so for to of few couldn't to transformation transformation effort, We everyone, the level to and And of proud the appreciate this years this that past RH. followship and bringing life like the and it bring your a we to work to drive this be the life. to worked do you, more takes determination that

of this to place the most are letters how our value shareholders, we people, important partners The at addressed the our because We order, company. that's our shareholder and that level you value. in

bringing So thank we to we will holiday, happy you chapter life. of our you, you, and the new to this for talk story And your for next year. all efforts. you a Thank more in of everyone wish very

So thank you.

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