Restoration Hardware 4Q16 Earnings Call Notes

Gary Friedman – Chairman and Chief Executive Officer

We’re making long term decisions

“we believe we are going to be a long-term growth company. We are an investment platform. And we think we keep getting smarter and we are going to be better allocators of capital as we go forward. And so we believe the returns we are going to get – continue to get better, but there may be some times where there is lumpiness because we decide to invest more aggressively into something that we think is going to have a greater long-term impact or opportunity. But I think as I articulated in the past, we are going to invest like we own 100% of the company. We are here for the long run. We are not going to play a quarter-to-quarter game. We are going to play for multiple years and a long-term view, and no different than the decision and the investment we made moving from a promotional to a membership model. These are long-term decisions.”

We’re building a new operating platform

“We believe we are going to build an operating platform that’s unlike anything in the industry. And we are going to do it from the inside out. We are going to design it ourselves. And nobody will be able to copy it, so more to come. We are excited about it. And I am personally leading the effort just so you know, that’s what I am really excited to do.”

You can’t solve complexity with complexity

“what I have learned in my career is when you – if you don’t take the complexity out of the business and simplify the business, if you try to take a complexity and you then try to solve it with a complex system, you have created a double complexity and that usually doesn’t work very well. All the companies I have ever been involved with and studied, most of the time when they are launching a big system or they are opening a new facility, if something drastically goes wrong and that’s because they haven’t first simplified it and our effort here is going to, first and foremost, simplify our business and then support and amplify that simple solution with simple systems.”