Restoration Hardware 2Q15 Earnings Call Notes

We are built to execute

“I think what people underestimate is how well this company executes. And I think what – compared to other people in our sector, I know it looks like we’re going so much faster, and it’s true and we are. And we’re doing so much more, and it’s true and we are. But we’re a different organization. We have different people. And we have different methodologies and processes. And I think – and I think that like – I mean, to focus on, we’re adding a restaurant and a wine bar in Chicago. It’s so little compared to everything else that we’re doing that is so important.’

We value capital investments financially, then strategically then emotionally

“we go through a very rigorous strategic process here, where every idea is dimensionalized and valued based on its financial value, its strategic value and its emotional value. And so the financial value to the company is that sometimes a more obvious one, what is the revenue value, what is the earnings value, what is the cost reduction value, what is the efficiency value, when we think about the financial value to the company. Then we go into the – we rank everything on strategic value. How does it position us in the market? What competitive – how does it create competitive differentiation? And how does it position us long-term to win? And so we go through many discussions around that. We try to value things strategically, and then we try to value things emotionally. And emotionally, as it relates to two constituencies, one, our consumers had is what we’re doing? How will it connect with consumers? How – why will they care about it? And will they connect to it emotionally?”

What’s the one thing we would do or die trying

“Once we had clarity on how we see the value of each of those choices and then we force rank. If we do one thing or die trying what would we do, we debate a hell out of that and then we pick one, and we align on that as an organization, as a team.”

We worry about market instability like everyone else

“I think the thing we worry about like everybody worries about is, market instability. What happens with interest rates? What happens with the market? The high end of the food chain you’ve got people heavily invested in the markets. And if markets are in stable, I think that that’s something we’ll worry about. And not a lot we can do about it, just be prepared to deal with it and what’s going to be the effect of rising interest rates? Will it effect big ticket? Will it expect the home buying? We don’t know, we’ve never, I don’t think the country has ever been in this long over a period of this low interest rates.”

There are correlations between our business and the market

“We can see correlations between our business and the market. And it’s interesting, as we all saw the market get beat up and then bounce back and go around. You can see our business week-to-move a little bit”

It’s really hard to be a CMO today

“There’s so many ways to address marketing spend today. And I’d say that the hardest job in America today, and in any company is probably going to be the Chief Marketing Officer. It’s probably why we don’t have one.”