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RH reports record Q4, a $6B North America Outlook, and continued physical store expansion plans

Thursday, Mar 25, 2021

Fourth quarter showed a strong consumer demand, enabling RH to “gain significant market share with RH Core demand up 36%.” Additionally, RH saw an accelerated demand in February, up 73%. And up 96% the first two weeks of March.

  • Q4 TOTAL COMPANY DEMAND +29%
  • Q4 GAAP NET REVENUES INCREASED 22% TO $812.4M VS. $665.0M LY
  • Q4 ADJUSTED NET REVENUES INCREASED 22% TO $812.6M VS. $665.0M LY
  • Q4 GAAP NET INCOME INCREASED 90% TO $130.2M VS. $68.4M LY
  • Q4 ADJUSTED NET INCOME INCREASED 57% TO $143.5M VS. $91.2M LY

An optimistic and financially sounds financial report, and a powerful shareholder letter from Gary Friedman, CEO and chairman of RH.

“Even those who analyze and report the news seem to find reassurance in replication, trying to fit everything into predictable pandemic piles of headlines we’ve all been reading. We, for example, have been put into the “there’s no place like home” pile. Others have been placed into the “e-commerce is everything” pile. Both are actually good piles, because if you’re in one of those you are looked upon favorably whether you’re on the top or the bottom of the pile,” said Friedman, “I believe many on Wall Street are managing their portfolios in piles, looking through their reading glasses when they really need a microscope and a telescope. A microscope to search for the details and differences in those rare brands and businesses who belong anywhere but the pile, and a telescope to see the opportunities they will exploit post this pandemic.”

Friedman continued by commenting on RH’s stock, “RH has also become one of the top performing consumer stocks of the past decade. Since our IPO on November 2, 2012 at $24 per share, RH has outperformed Apple, Amazon, Google, Facebook, Nike, Starbucks, LVMH, Home Depot, Hermès and just about everyone else but Tesla.”

The luxury home furnishings retailer has repeatedly issued strong performance numbers, most recently their Q2 2020 recording-beating results, coupled with a strong stance and belief in the brick-and-mortar space.

“While the web has shined a bright light on the dull and decaying stores that are dying from old age and a lack of innovation, we believe history will demonstrate that the physical manifestation of a brand will prove to be the most compelling and capital efficient way to engage and inspire customers in a physical world,” stated Friedman, “Many who report on retail’s imminent death are overlooking the obvious. We are physical and social creatures. It’s why we still go to theaters to watch movies, concerts to listen to music, ballparks to see a game, casinos to place a bet, and restaurants to grab a bite. We don’t believe “bucket lists” of the future will be filled with lonely online activities, with or without AI, AR or VR. And although the virus has limited our abilities to interact, we believe that post pandemic the need for physical and social interaction will be greater than ever. We look forward to experiencing new restaurants and resorts, plazas and parks, markets and malls, stadiums and yes, stores.”

Source: RH Q4, F2020 Results – IR
Photo Credit: Unsplash

About Restoration Hardware
RH (NYSE:RH) is a curator of design, taste and style in the luxury lifestyle market. The company offers its collections through its retail galleries across North America, the company’s multiple Source Books, and online at RH.com, RHModern.com, RHBabyandChild.com, RHTeen.com and Waterworks.com.

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