The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Steven Paul Forbes - Guggenheim Securities, LLC, Research Division - Analyst
: So Gary, you spoke in the letter, right, about the expectation for revenue growth to lag demand. And I think it was 5% to 10% in the third quarter.
So I want to start there, right? Just as we contextualize the build for the back half year given the current trends.
So I don't know if you can talk about like how much of the closure between this expectation in the 16% 2Q spread is due to demand being fulfilled,
right, versus sort of a more natural closure in the spread between demand comp and revenue comp?
Because I think you did mention, right, that you expect to fulfill the majority of that demand over the next 3 quarters.
So any like sort of color that could help us walk or build it out over the 3 quarters as we think about fulfilling this unfulfilled demand over the next
3 quarters would be helpful.
Question: Steven Paul Forbes - Guggenheim Securities, LLC, Research Division - Analyst
: Go ahead, Jack.
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Question: Steven Paul Forbes - Guggenheim Securities, LLC, Research Division - Analyst
: Well, maybe one for you is -- or either Jack or Gary. If I think about the 2Q's gross margin, right, because this was clearly a focal point for us and
investors heading into the quarter.
And as we think about raising the long-term guidance here, right, to 25% EBIT margins from '20 versus the [22%] you delivered.
What's the right gross margin profile for this business? I mean, is there still a lot of opportunity as we think about whether it's delivery, right, damages
or reverse engineering, the outlets, the whole supply chain, I mean where is the right margin profile for that long-term target as it stands today?
Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst
: I have 2 quick modeling ones. So you mentioned COVID-19-related costs were about 40 basis points of drag in the second quarter.
Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst
: So any guidance on what we should expect for the rest of the year related to that? And then could you remind us how much was the annualized
savings from the headcount reduction you did back in April?
Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst
: Got it. That's super helpful. And then lastly, another quick one. Regarding the world of RH. When do you expect that to be up and running?
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