RH (RH) 29 Mar 222021 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Fiscal Year 2021 RH Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your speaker for today, Allison Malkin, you may begin.

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

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

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 opinion only SEC of

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

results and rest I'm letter. for the and XX% you with open our Great. billion I take billion few leadership to call to Thank Jack XX% another net who's our our shareholder record today. and through a $X.XXX to year you room XXXX. people, of pleased revenues the us will are versus questions. you, report up and going ago, year versus shareholders, and walk and the Allison, to we team in And of increasing To – $X.XX open then joining thank partners minutes a

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economic on take we outcomes the to economic business of a expansion, we Although or may it scale, times contraction do of whether dislocation. themselves, advantage model, predict to have the macro that sheet present the lack ability and be balance opportunities strategy

late the demand first until sales that our first of We of backlog, Ukraine the and trends coincided market it the followed. that due the first February XXXX. providing have normal, to outlook demand conservative While to quarter margin following softening return are and quarter invasion ongoing quarter in remain in we believe prudent relief experienced the is Russia's healthy for with of remain to volatility we trends and

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questions. to open call we'll the operator, Now

the of [Operator Instructions] Steven Our from Citi. first comes line with question Zaccone

open. is line Your

very Hey, afternoon, everyone. Good much. Gary, thanks

you revenue expectations. year First just little more bit question, can a elaborate full the on

what $XXX the the demand full quarter? fulfilled for just how and being understand business. year So, you. seeing outlook terms factors your the despite in of softening you're newness started February the the Maybe first backlog guidance, the all Thank million that the that us year of into balance in of in help versus

Well, rates. rising everyone is X%, kind we're that the and Yellen, prudent increase ago, of view the going isn't the said it two too softness X.X%, clear our we've interest fact guidance. based going we weeks of now saw too market And was later, to to take newness of And Jerome a followed. even they Powell in inflation it's conservative believe though we that you've to weeks it's went X%. is this all interest rate as our to at you've softened the But And disruption. two it it Janet implied beginning -- conflict back And or and time I volatility that of long. years on now we've think when said, it's -- to and X.X%. business to And since saying got the got have kind the many waited to also got now the going not was X% X% consider

Not to you've to had rates a and Fed be don't math. business things I a got by everything. aggressive five sure. to sustained a When would war people So, during out a Ukraine think attention it's XX just slow of to Fed history that where pessimist, I four How There we are period. stop to point, mean tell tell invasion. and became normal? lot period, and need the have by is to it consistent don't will, recession. we returns but we to been be? know, if points, interest of Not us going reckoning lot saw times And to the raises a a It's of over there, relatively our invasion fact. And you pay that guys just you sure. XX news and And the a and Russia compounded I noise a about

and So war. pray as -- for like look, I peace we tend for plan say, to to

believe our balance of most product we one strategy, a hand of in And we We exciting lineup experiences the this the got history so, best We've got company. business industry, initiatives, going sheets year. believe the of our best the the have ROIC into we've in industry. great highest model, our the best in

of ourselves game kind And So a whatever happens. on putting happens, position to we're win. just in

just had question Thank for helpful I very that. international. on detail. margins Yeah, a that's you the for

for should same How think I said these initial the the margin said for as bit the can margin Europe dilution of I think you've assume the way, little do operating years? openings So year just profile higher guess, there's opening you given this about the another from you than past Europe then next we guidance US. some the profitability UK a year? few we in should of the in curve and that be for next or

brands an a all is brand But has would say, value-creating that spent It's back. versus of business of we first a way There's be shareholders. less their brand many And the easier ton years license buying a their control it. long-term to for a going our money of demonstrated way, learn franchise globally taking to not the the of history done profitable together, of others, which and licensing the that that lot and or right assumption. and the believe their and great brands we've we're ours history like Yeah, I'd brand right? brand expanding time

to what exactly, accretive done it time earnings that's would study we're you So as going math the other's believe, say the like. Look, first be – of the will we've it's this. curve long-term But what look we to is models. kind

realize Europe. we've lot And there's this got as we of it become closer. a get excitement as brand kind we meet in than talk we'll we week consumer. brand any a people. affinity have don't opening for more greater -- We of what think awareness every on target brand people to awareness we've month, So we – to relatively but our communicate with anybody view I the think phone, and There's evolves. And better – I greater are as high of RH every confident

say, So scale the And retailer we States, it's we closing if not of we kind we United believe our of are is We're a operating of are still is just and business. not feel where to that in And long today, business to be term, of their I'd right? you stores, kind accretive very to confident. going growing. complete think about optimize We're still a that shrinking margins. kind

a lots and that and going top top have And luxury could some just US to dollars here to do see as in think of operating higher level. have scale. that, should transform And models the like the possibly product a we We billion transform We go of that evolve, of you about best several long-term to be have that, of kind to approaching being when in new accretive and with galleries XX%. margins world. can more model looks we're our international of on continues accretive on the

has out, it in Vuitton, has margins operating the Chanel a of margins the the segment to models times, individual margins mid-XXs. look mid-XXs. LVMH, kind operating in has great segment in -- kind Ukraine, the low multi-branded of and you but get business mid-XXs. if If margins And at Hermès in great operating lost Gucci you of businesses in has operating lot right? brands and brands, the mid-XXs. or Because Louis

actually cars. few access by think to to of view. think a watch brands quite or you a of -- a think consumer if apparel access of if brands from you back have sector There's brands, and lot from, competition for There's, wealthy point lot if luxury the sector, you the stand a about about also jewelry an of lot a luxury about those we choice scale. of So and way, just they the

of is stand you think about, at world, it's fully void. think void. luxury integrated luxury home mountain brand and really a the If big the you furnishing the and okay, big luxury in back a who if about, It's top the design,

control You've category of in kind of got their mean, example, their They're category, are take a distribution. four they have that just that for that America, brand. points niche of it, those little currently small, They distribution. think very brands portfolio franchised XX of relatively if don't I I points distribution out. have, XX, don't of control of points scale, Italia, of control B&B B&B you have they fragmented call of very of North distribution, kind

categories. design that's that, brand of Italia, the is in bunch thrown think, and in like all they one upholstery their you've brand FLOS other something got, but places. And best I So probably cover the has some don't the a Lighting. it's around they're then the group category, that's global B&B industrial And like

are to stuff Some of other throw trying kind things, what to people yeah out together do. figure and

market. a taken of Frank not trying businesses the many place building categories, model. competitors I of start galleries, real for long a unwinding estate people our model we to I And concepts bigger, awareness, and America, XX% I in we've going like, them exciting selling square are XX,XXX going really We're what journey, bigger. connect okay today crappy look When trying in are only move great And business, to We're shitty a they're are feet really something time XX,XXX It physical argue. we're The what a our taking the Sinatra lots to of that years of to and them of to mean most all XX% to to it of of kind making you a promotional experiences going have a understand them making spend internationally, part and them. from business, have way, to like But in little brand to product, our like customers. this we business, membership reposition to it's and like taking with choppy, not build not a I'd experiences legacy mean, and our dominant and XX-year shy we're into in our exciting and haven't spending XXX% not bigger. and that at other turning the to just we foot, And going our not bankrupt, at of where brand X,XXX are just lead, with just environments capable a to of. physical when says it's and we're category, stores necessarily exit lots kind small that kind or -- building. start across see galleries but players physical unwind, takes this an small. consistent greater had remodeling interactive and and kind to North the greater not those which experiences in affinity. so people to like, do bring not hospitality in of say we're is way, in getting experiential brand space, right? people create a we're they're I look kind X,XXX a then, And to sector. industry People it going and see just people not journey any

like you legacy Europe a -- got people other been people the are who we've going you with of any us even when positioned plagued and meaningful have US. in the to think do you or kind So, other they and very to people mall walk there's about you where today, Those are the who of people I and of way, that we and the in three store against us being kind not there's positioned being know pick think them other our and in best want old international nor identity, to really with today, aren't compete depending not four taking names.

internationally, nobody distribution. ago. years of There's like kind XX And so scale. of where were Most of control them so most it's of their And fragmented. them, we they're don't

for no the maybe opportunity think like just this the other is globally in brand brand I So, world.

How there? say, other that stop it, just take to you all their not their level? think product business -- over brands brands have? and category Europe. levels? going model like we really How Like We're who the going and we X% there it grow is EBITDA high are the If any with over there the in going of negative trying are not like to the about many leading trying in close and to there you control that with control Europe. is platform XX% with EBITDA. brand, on have? at grow owns How we're over EBITDA, you We're Who like

in it so yes, we because great we just So, just anybody get have -- I so it are about such but thinking a long we've position. long. studying And really us think don't and been for

when you I see is then we've really just ever anything a take And in competing So here -- you guys that. and a to better you what from coming. America to if us. with I say be what's I'd close don't in we're doing of view Europe in competing North wouldn't inherently. -- thought be in be done. just you you us next Europe physical want to in mean point And It's than I tell -- kind mean, competing us with don't want with want category, look. I to of Europe. that just our

it. So there you have

of detail. great. Yes, Best that year. Appreciate the this all luck was

you. Thank

question comes of Guggenheim next Our Securities. line with from Forbes Steven the

if mute. line open. to Your is Check on is line your see

me? Can you hear

Yes.

Yes, Steve. we hear can you,

that. about Sorry

new focus on to wanted product I launches. So the

impact? the environment the the update conceptualize to specific the the color And can us has collections, can, the impact of to is you you also chain or in Any supply try of any timing in new breadth the current if Gary, collections on launches, these elevated way. anticipated in launches as Contemporary So Modern on Interiors. then we whether and

and launches. mean impacting late somewhat do Of together. coming the a everything What fragmented little you as it's it's course, I think? is

kind very the really we of -- So through. went greatly. quarter sourcing like some or would yes, impacted of country variant when mean, kind look, be the just you have before the it a But out have all think lot, of it -- And the have places got liked to It through cooped I the that We Vietnam in March. -- that of big not out ripped US there in the again, would some Contemporary we about fourth of quickly. just I kind up. it China, of US think with

So landscape about think we is behind. ours, you business be book to the catalog got about economic into we and want don't you -- big -- careful volatile, want you've just we're if If I economic a we mail months source headwind. want smart a think especially like a landscape couple the of We to be going also, we're as to into.

we're thought we reevaluating XXX Contemporary. with or pages of I We're mean, kind -- So might -- in XXX launch we're our plans. we

going it transportation think by raw it's issues, be I by not more it of been is the caught even all mean everybody think it XXX year. hitting be just of be later. to all materials just caught from might probably because have angles, have to the stuff lucky up mean, up end the we'll pages, many to it's sense the I I late. XXX supply thought we been like be is chain, now. transportation My getting would the to the us. I just And all us

vendors components having their shipped world of all Our to to them. over the all get from

chain kind happening. So of have you puzzle this just compounding supply

you because aggressive a wish but we're rush I being right mistakes So just I didn't. circulation. we pushed let said, have to see. is, can some in modern now it of We'll be interiors running kind the just like don't little would out probably in of we the want first contemporary make We there you it's How before that thing late. you key all We it the with will to take we in half, go half, coming and the conservative. of think kind get kind May. don't stage second stock, the goods book

that's for year. probably to So just also our -- conservative and the view contributed

world manufacturing, of it's just a whether out world on supply never -- we're of chaotic, shifting now. view, it seen in the even the and a execution is Everything projects, sourcing, point galleries, so -- So just the sync in freight. on I've from little chains, honestly, it's right is that -- construction, an the

everybody is So it. with -- but dealing

it's do think how it I intelligent quality. it's And it's in just the I like most to like -- So way. do like you say,

to think for we're bonus to for You, right I get points not quality, wait now. kind just don't going and of, rushing any are. got we

I risk more up think ditch. there's in of winding the

year tend we're more just slowing to more is be I that’s our view, things, to trying spend to thoughtful. of approaching deeply And fewer, chaos else world. customers' want a got big our all where don’t time very a a create down they back view. up. our is trying here get We're lot few important our and This we've thinking lot more world know, big bit. to So make moves. a We about bigger, because of moves moves. but in a We that’s everybody We're things

my than have. see you It's different what right front in news is best So now the you letter news is of in last letter. -- I the

invades And I didn't you've know to to Then Russia you Yellin Paul four last letter, then Omicron got war, inflation boom. says it from and of says hits. If it, goes that sudden, Ukraine, behind. say X.X. how boom, interest read all is to a going we're a the two,

I in now. don't port. chain a And got is. average. at water money. long better. of a It's all. time. weeks thinks what that's I That's chains product of think lot supply lot long time, gotten lot for of a generally I it is our it the -- It's time. we've extra right is getting ships into We've mean five taken supply about everybody a the mean, are there's getting think on a better I

if weeks some some the So steps an steps But the picture, a complex and more puzzle XX coming run time pieces And the be same when you integrated list, behind. it to you all happen. more XX on now, at that right ours, makes just the need doesn't shocked that is paint like time, and year of all to think means on the new, business it everything that difficult. where I'd I

a ask next goes into the that's to year quarter Palo make risk, going year, If what's biggest the not me you anyway. difference Alto but to first of

a the think incorporating to of try year Because right? super the contribution like the new prudence contextualize Gary, I you're a as almost we lot of not it appears guide, helpful, from of these you any And on you how standpoint have would behind comment record I how it? define guide bottom-up right? a you mean, sort here. build of prudence from or track the factors, great a

So the holistic guide behind prudency on a in just any thoughts on it? the just context

XXXX most think of -- Yes. right disruption and Ukraine because of and from middle -- Well, in Russia, don't XXXX we're think Ukraine we all one in this and the look, I guides I difficult I which it's Russia. it's the since mean probably

Like everybody that I it's triggered of everybody off pay and of greater someone think started ring a awareness. a bell, sudden, sudden, the to attention creates think then the talking and Feds I the like it's this was all races concern. --

what's I've all-time the sustainable? how sense math. other I long that it like don't got inflation prices mean, kind for You've at got seen. the housing make places in highs. and never happening is I Doesn't of housing you've know on sector

think Now do they're understands you make raise I I phone back has how or freight business the an from think How prices. go some mean, I the to -- inflation? and It's just going said, I are and space. coming in people be we're ocean we're new I the How's to to anybody with tricky think think is think, to think going restaurants, what's is I And if less this? our is a was businesses are view, going of telling anybody person going hey, prices and really because everything. understands in and said, either that? I we consumer. don't rates? everywhere, point lot called I a anybody inflation going in cars what going money, How And Fed ocean freight really it's happening to outrun were their don't high signing wonder just X%, up picked to Yellen when contracts, contracts.

to at time, And mean, unpredictable if super I got difficult, kind once. everything got going I you you're you think a into happening just of flexible. is So to be very prepare for war.

play I'd in call a higher that, likelihood wind Be have When anything. like be that ourselves. we we now. for it offense, mean wouldn't ditch And of pensive best mean and to we it's And when playing I got get adapt, by kind up playing but the call by ready I it to don't we outcome. and -- ahead improvise, days. our of right be I usually it's happy ready. You've overcome get optimistic, have days defense. able to overly

but container most some can price went the of X,XXX the us and down all Ukraine if everything, signed ago, world years to X,XXX? sign in So of I if ends don't freight I war -- inflation the contracts. miraculous way, everybody slows for new freight Two new know, from contracts because, mean,

that. About

just to let's have to. But Yes, like not doubled. I'm nice Yes. just going you went tell increase. say a that what it looked

So and It's us. everybody. it's -- not just

it's to I've guy the that the think, just our and BlackBerry, room. maybe and wasn't like going XX big years they're Gary never here, that down his going just the And they'll It's of either I So more up -- to told $X goes, to be everybody -- the do they're right their the you've or margin people -- are value goods guy -- is And I then the going just prices never a XX view ask and honest. it's down So are real know from But XX%.' talking, is guy buyback to ballroom billion transparent 'Can never their Stearns you take the or Short, and going question, there, better In change. we of your to sir? he us. in in quality of think not uncertain, things, hurt now. look I've hit right? my to won't -- take think there again, this like -- this a balanced it's stock never But to have ran to I've try Bear and minutes stupid of take in like on And everybody it's industry. is I like is excited. excited. more and I not I they going because everybody he's talk been one every people them, everybody. to one going and scene someone I saying their up where Friedman is been tend look, I've also make don't things out stock take stock, want is profile -- been I have and just take to in Big like to prices think like think up to been I where scare I about to don't The

Gary. Thank helpful. of Super luck. you, Jack, best

you. Thank

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

open. is line Your

think Jack, sounds events you for individuals. how we hey, my worth, net about high somewhat market Gary, volatility, in business, brutal Gary, I two so like you net That plans there? Hey, tend past And the out, be impact taken in baked guess the RH was seen billion is much the that of housing, to honesty, And are have is then, necessarily your thanks it. would worth potentially Francisco I high-end guidance? hear what ultra-high that is, the yet, the to but the guide? question talked have much. which And the haven't second deceleration in awesome. we loan $X much then that very term you on San into that Thank Josh,

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we move, when So know. you'll

the But any early? plans converts retire to

sell that's I've to happen all Yeah, a me million stock, got kinds in the But X shares in have happening. those options in to of buying roughly at one of probably can things. to expiring conflicts have you CEO our look, company, the that you've position stock do appropriate be right? got too things It's when and All back many you have selling you time the not can't things stock. also, -- you've is things, windows putting

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there's right of complete about, to just lot things all we those decisions. on flexibility yeah, so think got a have So you -- don't

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is in this of to have out to it's flexibility. November it better So we so of can year, operating try option I get my way, more expiring and the think

constrict a So actually us my situation bit.

much for very all helpful. Got very it. Thank you It’s information. the

Thank you.

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

is line open. Your

question. Thanks taking much for Great. the very

state of the do in three. through malaise, fragmented. the you luxury of chain, US, have know, guess, at of over share? changed about next, in How we've thinking a So, and obviously, volatility, opportunity the of guess, maybe past, you gone here, of guess, has supply a years think I plays might yes, industry of here know, going as it's to a don't and pretty thinking the two guys sort premium of you cynically lot don't think kind thinking I noise I that things, the bigger stuff. on the thinking on, end least call, thinking about that still to out? couple Gary, How about detail of take of about do I just, kind I lot all sorts the

about I to three next we two think years. great feel the

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a that and seen time of six interest five has think seen anybody up happening a So times lot year? Nobody seven two year of I four, here are When's seen that? has Nobody this. years go rates or next this seen times in today. the people haven't a lot just things has last row and

play game money. saying, coming. the than just do? be be and more Do of if we just happier things make Again, Other be brighter, more lot I might trying we they we a but than the to uncertain, numbers too and exciting story. better I me. game, drum I'm the okay we're can I'm conservative, that's I way look, to think So don't couldn't banging look, have a have honest. that's the play excited, We'll more so. completely just people And be

certainly For the long-term sure. view. appreciate And

of, terms last that be follow-up taken the residual guess, one right, guidance, pricing Just year. from in probably I price may quick you including just in from

continued coming cost in As costs lots of you mentioned, or increases. new

the – no? our guide in So round of increases the or XXXX included price

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ours I highest products ever the ever we've goods price had. a So be the different. is had. they best-selling get quality mean, is the It's points tend ever highest those to we've little Contemporary When we've had. we right

best-selling sofa our expensive most sofa. is Our

others positioned up better probably been we've take we're prices so because to up – for taking when prices So years. than

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not car. car You're the of need the price at until looking you the

at the looking price the until need not the You're furniture time furniture. all you of

other a So positioned better as little I other relates think we're than it to and categories price industries increases.

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smaller, and recently, and just – the so taken at we a almost And on so move and ask years while, and maybe XX% lower-margin a term? for then people do launched, average, to began out to this bigger were almost to ago, come but accelerated and in the I And prices positioned or the higher a is, I question Modern years higher-margin want business? Modern six forth. the And really sales, have six, chase XX not seven do that's some do that, and want yes, something was for membership of when view seven really I so launched want business cases. ago, for Modern years on we two ago years like to long times we've

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getting probably when Unless mean, did later, probably little hadn't we yet. ones people I been So real mean, only a got surprised that trends slowdown we're seen people -- if what know, hit the now. our report? places, too. So right? and don't be to there's other happening. broader is But it's I in like I've just was I'd heard probably the reported industry, a the I in other be we're right

you. it appreciate Fair Gary. enough. Thank Much

you. Thank

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

open. is line Your

lot Thanks Good for taking question. morning. my a

So presumably, that seen on XX-point XX demand you've Gary, you slowdown, say to comp. when that's a

of there comps view the that financial position, these a demand year raised year-over-year? over and is few last And this merely your they be spot. or core into in significantly is your Is environment, that strong uncertainty the purchases prices lot down the now responding in very customer been a so are good where a possibility came being there that is So customer it in have your are would a counterargument while the weeks? the actually trending is high-end housing that? deferred, that Are pretty to market

many distraction think? bit could mean, the be Michael. the you could It of do I be so I don't everything. it a could war. little things, be of What know. It

points. -- -- I between we not dislocations to been a demand. has giving got biggest that demand color not our actually one we're also there really there's -- XX give We're hit So guiding And and and XX revenues. demand of the by you wanted to change. just

be to I that think going for it's way everybody.

where -- we look, doesn't just So try we that and just say, that's might eight to 'hey, mean it is. transparent be wanted up demand on because and to

and we to oh, back what's know quarter transparent when could to happening. say, let So really be down we want and trying been a for the And shareholders several has demand come don't for yes, we're you last people have. didn't I whole tell well, next our with months. yes,

whatever. probably going We for going these didn't have clients I got it, truth, just this. stocks again, playing everybody's easy mean to transparent. and in be there's we're today. to got times and know and So I you run. hit for I the I mean, And we're long to of the out I'm say stock our all shareholders. tell aren't

and first talking demand. strong. better The sales ones talking to continue the saying about in Well, comparatively are demand. we're people, they're sales, think I they're we're up to our going against, what QX about relatively strong sales

in it's like just truth. don't have to they Do that's has So -- do what the what know. got right you got. so Will -- this consumer the We three acting if not change it now, they it they're because like months?

across is said Trager, the there I That's reported last Company as also and three super board, that you weeks not only patterns or the the across seeing I slowdown. week, pretty slowdown the Grill consistently mean a any that you're have well, big this one. helpful. Are you last seen categories the can see

broader as So, right point it and trend, you this out a it's to is for probably well.

you guess, to run? And risk can the margin the to the and year, opportunity what flex geography? any to -- XX% prolonged target over I to is you what that category gets operating seeing worse, grow provide is for P&L? question an So from on long did there that this flavor how you're have that understanding then XX% this will obvious degree a base your by is If you downside

We've year, will shoes other that like be well, the are looks depends and counter things like that industry are stick. the into It goods to happen, all When entire this our that any this down on stays We've to it if don't things temporal. are everybody don't initiatives going -- they we We down. this Look, I this. adjusting there usually think numbers got come going in -- dropped. new got play.

So, you we now. I right for this have all is mean,

view. quarter, have I a Jack, think don't to-- much you we'll want So, know, And I do next better

Yes.

Michael, obviously, On don't those the categories kind items. and geographies, of we

And of there's model then, down just margin, if L. headlines a no there time, an generally, think sits I major extended P& obviously, that's well, there. is I risk strong for mean, period the risk the if

we'll you that update happens. but extent -- to So the

Understood. Good luck. much. Thank you so

Michael. you Thank Okay.

Thank you.

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

line is Your open.

a Thanks lot.

your that could just if potentially XXXX behavior some to context of continue business and that decline to Gary, the in wondering, theme, in cited. December on when to that you seen I contrast this Just compare of weeks was of you consumer unfortunately. XX% the XX% you've recent

like Well, to XX% XX% a XX% looks to a decline. decline XX%

So, different there's that factors very to contributed that.

play all will like right out like is those unknown. kind of how the So focused again, But now. major of we're on kind

our that making. horizon focus think a big on and is I the longer much we're really moves

disruptive. going we've best the work be So up, a share. incredible we've got Yes, balance We're best that's to an that we're going strategy. term, done. win, we're expansion sheet. yes, no global the we're teeing take ever short happens model. We've a We've what to market got to great We've going matter got got

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know, our compares different don't what margin so were it And company. XXXX -- different was XXXX? XX? circumstances, to like a but different how They time. operating I both in down, We're

XX.

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tone. me talk different want little If probably things, or about get you'll you to about other a bit more a Europe more to of

we specifically mean the we -- don't in XXXX, have now. I've times? I No. the rates they're 'Hey, don't know, I raise have of There's see different. a in numbers. X Did we that And very inflation that's know is Jack, I we X different we're the did caution at have have I'd see right in what seen to say, environment. just behind?' cycles today? or No. interest enough So levels say anything of say. the Did different mean, Chair Fed the And way to Yes, I we we it's lot the No. Fed advised something -- going things

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I think we all appreciate honesty. your

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the You $XXX for TAM RH called Bespoke. out million

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excited what see get they'll the we'll consumers So about tell And how it. think. to us

Thanks right. a lot. All

Thank you.

Thank you.

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

line Your open. is

any up that Thanks good afternoon. are and I on chain RH provide question. if Hey, see how points standpoint, of on knowing more taking what for might we there's here like you're color you new follow-up expect to the what supply the hoping could anything a was continent Gary, things be here. price from States? should shaping logistics versus initially England and the see different delivery And terms in time in there customers United of relative or

the table. things Fernando just good. mean, across looking Well, got look us look, I'm he's at that updated I him back.

absolutely. Yeah,

Yeah.

and We'll end. to that part COVID we'll it in evolves. able looks inventory. side taking I the from don't chain world think go is like, The The have see And supply be a and we're living we'll a got experiences many kind I ready has execute. But control, like at chain construction RH hospitals far, costing have not the a hospitality But any a about Altogether, think longer more. we of today so of ready. I think property. construction, deliver how XX-acre be to We'll kind going supply our the as opening open about it's big three bit to state. to of It's we've a restaurants trying England store. think think of Like, or like there's, five on to Like, six everything that how have. we that. I once. we're on

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state. see great of we beautiful incredible light. our gives I well, It's lot it come. be to a It incredible to think product a are views. if is a to people environment It do going going beautiful, has

biggest We deer all white of in Europe. have of heard the

park have that We deers a graze deer it. on

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to thought August. we're proud but a get long to is in going be don't shot it -- everybody could I So be opens, it July, of June, now, to our it think could I it. Whenever opened probably It's going get organization whether it be know. June I

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consistently our not we've that cap capital structure. cap our We a about capital, deployment structure. answered very I'm think I mean, that we target our opportunistically I have -- think sure

changed. So that hasn't

about been last -- raised years the optionality the a we've accomplished provide We attractive very to that. for We think exactly. nine probably capital us at flexibility consistent for rate. going it give that quite and here I forward, some

So...

you You certainly much. Thank so did. Great.

Thank you, Brad.

Basham in Thank queue. had you. It's with Seth Wedbush. another from come the We question

open. Your line is

some the sales structure Thanks to your cost anything outlook. that's thinking I'm outlook XXXX, talked surprised changing to prior afternoon. to a you if see you about the questions, been the are brought up December. in materially operating us guidance. point wondering in relative belabor to expanding good in your margins last more I'm lot, margin by in muted regards but and just for to Not when

For that you. or along back in example, those Thank the distribution you're cutting some of else anything of sources you're lines? planning

revenue operating looked just modest what relatively I've since had significant XXXX and growth. think at us margin We've pretty I like expansion. Well,

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the in hospitality enhance because investing a we're and we think So such opportunity heavily big to there's year, brand. this

had we're Like this absorbing during year. So almost no costs of lot COVID. travel we a

So in deleverage traveling. some That's why we're SG&A back in you saw QX. to

have investments, whole else. again. we're not earlier travel, of crazy We things the work We're on, or a don't see anyway world came that of have working you back traveling I happening -- things them, operating lot think we lot that it's don't of to in model to okay. productivity. was One than but internationally. margins again. All even But here though expanding think, one work, going sales, relatively sites of coming to back everybody a and is we're to expanding -- a we're for – not a bad going a work boat lot I conservative our mean right we are in We be we're but have we the I is

prestige model, a model and like we desirability four, luxury very lot just of build get like to it to tells to look the a but and that best handful world. brand. the over three, decade? it's a continue in So do of going our luxury What's and over If scarcity you years, the going and the being desire like like to right? to exclusivity look I to things into next really or people to it's brands it got going two, about brand five what really you've really look next think right,

You've execute We've an go. And level. it getting the We're to getting there. we're got to at incredible all got ways better such a time.

we're architectural right? what how over the the already shoot, or that's day. what's talk I of we're doing 'Look, but under we're probably optimistic enough we're or so projects And you look next so Like pipeline. seen you pipeline it's yet. on We now, I've I that a anything right lease one we're we two, wish years, We in like, go doing how about. designs can four, coming and the at scared, five would know haven't is pre-scared that about finalizing like get three, see and some them -- renderings finishing could is they -- the for pipeline over doing this We're construction guys -- like that

Just trying what to see. honest be about we

much. Thank so you

be just scared, excited. to not We're cautious. We're clear. just We're

Thank questions for the you. closing showing would now turn to like to Gary the back over no in queue. call remarks. I further I'm

see your let you. and next want to San might forward You do We you, if and quarter. or thank by Francisco need RH Thank call. to center look okay? the with see to you you're Coast on come know time. up everyone, for Well, West Okay. us this innovation, after speaking And of pick the

Take care, everyone.

Ladies and call. for this you conference your participation. gentlemen, concludes today's Thank

disconnect. now may You