RH (NYSE:RH) Q4 2022 Earnings Call Transcript

So, we know that our work has to be more extraordinary and more remarkable and it has to create a forced reconsideration on who we are and what we are capable of. And it has to force the people at the top of the mountain to tip their hat and respect and accept us and admire us. That’s not easy to point to somebody else that has spent it. So, we €“ it gets more difficult, but we also are significantly better than we were when people climbing at the buying amount. But you are learning as you go, you are becoming stronger and more experience and more knowledge, give more tools and more support. So and as much €“ look, I addressed my letter to our people, partners and shareholders, it’s not an accident that it’s in that order, right. I am communicating to the thousands of people and team RH where we are going and what we are doing, right.

And it is going to get more difficult and it is not for the faint of heart. And it is not a climb that anybody has made before. But if we make the kind, the rewards are also extraordinary and probably never seen before. So, yes, has anything become more difficult, no. It’s just, is business more difficult than it was during the pandemic, of course. Is it more difficult than it was in 2018 and €˜19, of course. Were businesses tied to the housing market and to interest rates and the refinance market, and so, it will be more difficult. But that’s just temporal. That is temporal. Pandemic was temporal. So hopefully, we are sitting here in 12 months, 18 months, the Fed is lowering interest rates, the housing markets up 20%, things are great, you just can’t plan for them to be great all the time and you can’t plan for them to be bad all the time.

So, we try to just take the right long-term view and navigate through the noise and distractions that could take you off your path and have you wind up in the ditch.

Seth Basham: That’s helpful and just to be clear, there is nothing that you have seen over the course of the past year that you need to believe that you are shedding customers that are not just low value but sort of mid value that you would prefer not to shed and that you need to course correct for that?

Gary Friedman: That mid value, I €“ look, we are not going to €“ I think what you are seeing maybe the delta and our business and others business who have turned promotions back on that’s the only delta they we have right now. Because they would be taking market share from a mid-value customer that maybe if I pushed the promotional button here, maybe we would get some of those customers, yes. But we would probably lose them over the long-term anyway, so at times like this kind of accelerate things. So, I like we are at, it’s not a complete surprise, when you said, hey, if these things happen all at once like if these things happen all at once here is what it could look like, yes. What do we have scenarios internally say, look, if COVID is that a big give-back, if the housing market €“ if we have a recession in the housing market as dramatic fall, what do things look like.