RH(US:RH)2024-03-28 04:20Financial Data and Key Metrics Changes - Revenue was negatively impacted by $40 million in Q4 due to severe weather and shipping delays, with expectations that most deferred revenue will be realized in 2024 [136] - For fiscal 2024, the company forecasts demand growth of 12% to 14% and revenue growth of 8% to 10% on a 52-week basis, with adjusted operating margins expected in the range of 13% to 14% [143] Business Line Data and Key Metrics Changes - The company plans to launch the RH Outdoor Sourcebook, featuring 14 new collections, which is expected to significantly enhance product offerings [137] - Waterworks, acquired in 2016, is projected to grow from a nearly $200 million business to a billion-dollar brand on the RH platform [140] Market Data and Key Metrics Changes - The company is expanding its international presence with new galleries in Brussels and Madrid, aiming to elevate brand value in historical locations [141] - The housing market is expected to remain challenging until interest rates ease, impacting demand trends throughout 2024 [142] Company Strategy and Development Direction - The company aims to position itself as the arbiter of taste for the home, moving beyond selling products to conceptualizing and selling spaces [145] - Plans include launching RH Residences, fully furnished luxury homes, to tap into the $1.7 trillion North American housing market [147] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential of the brand, emphasizing the importance of strategic patience in building a great brand [10] - The company is focused on transforming its product offerings and expanding its market share, despite short-term pressures from investments [159] Other Important Information - The company is increasing print and digital advertising in major home design publications, expecting this to provide a lift in demand [138] - The introduction of RH Media, a content platform, aims to amplify the brand's authority in architecture and design [122] Q&A Session All Questions and Answers Question: How should the business be viewed in terms of scaling and ramping? - Management indicated that the business is expected to ramp up meaningfully, with new products and sourcebooks driving demand [12][13] Question: What is the outlook for the Waterworks brand? - Management expressed confidence in Waterworks becoming a billion-dollar brand, highlighting its strong profitability and market potential [140] Question: How is the company balancing price points with maintaining product margins? - Management stated that they are focused on maintaining quality while sharpening their value edge, with no intention to compromise on product quality [66][67] Question: What is the expected impact of international investments on margins? - Management noted that international expansion is expected to create a 200 basis point drag on margins in 2024, but this is seen as a necessary investment for long-term growth [121][154]