Restoration Hardware 3Q15 Earnings Call Notes

Areas affected by oil are pulling down top line sales

“So when we look at this the areas that are affected by oil…When you take just those three areas, when you take the Texas markets specifically, Houston, which is being impacted the most, when you take the Miami market, and you take the Canadian market which are all very important markets for us. In the first half of the year, they were pulling down total Company sales a little under 2 points.”

They were pulling down the company 2 points, now they’re pulling it down 4 points. It makes me think we should be calling Yellen to let her know what we’re seeing

“They were pulling the whole Company down a little under 2 points. In Q3, that accelerated to 4 points, and that’s meaningful, right? It’s not just meaningful to us, I’d say it’s meaningful to anybody who’s thinking about what the US economy ought to look like, and how we ought to think about it. It makes me think hey, should we be calling Yellen, and the department, and saying, let us tell you what we are seeing, because those things, from my point of view and I don’t mean to make anybody panic, but it’s important how we look at those.”

We have a bias for action

“we have a bias for action in this Company. We are not good spectators, but we are really good participators.”

It’s the most promotional environment we’ve seen

“But one of the things that’s happening is we track all the competitors’ promotions, and we know what everybody’s doing, just like you do. And we’ve noticed that there’s been an uptick in competitive emails year-over-year…when we look at the data internally, it is the most promotional environment we’ve seen, meaningfully so.”

Taking share is important

“Taking share is important. There’s a reason why Amazon launched Black Friday before everybody else in the world, right? There’s a reason why we launched the promotion we did last weekend. It was to take share. There’s consumers, there’s shoppers, and we’re going to try to take share.”

Every 4th quarter is a war

“From a tactical short-term view, right, is every fourth quarter a war? Absolutely. You have, in this business, can you not pay attention to all those little things, and you have got to be ready to fight the fights, and you have to be into the details, and if you want to win in Q4, you have got to be highly engaged, and you’ve got to be willing to improvise and to adapt.”

I don’t mean to make anyone too worried, but I’m trying to be transparent

“I don’t mean to make anybody too worried about this stuff, right? But sometimes maybe I tend to be overly transparent, because look, we’ve got shareholders and supporters on the phone, and I think it’s important to know how we’re playing the game.”

Building partnerships means having to sometimes tell difficult truths

“We can speak less about stuff and pretend like everything’s just always great. I don’t think – I don’t think that’s the right way to build partnerships. I think, we tell you when things are working, we tell you when things are not working, we tell you when we make changes, we tell you when the changes are working, we tell you when the changes are not working.”