RH Q4 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Steven Paul Forbes - Guggenheim Securities, LLC, Research Division - Analyst : Gary, you mentioned getting more control, right, in the business. And I was hoping you can maybe expand on that theme, right? Where your mind is that, what other aspects of the business are you looking to gain more control over, whether it be manufacturing, whether it be the whole design process, right, I think RH In-Your-Home experience. Would love to just hear your thought process on some of the ideas around control.

Question: Steven Paul Forbes - Guggenheim Securities, LLC, Research Division - Analyst : Well, we anxiously await them. The -- maybe just a quick follow-up, given the unsolicited proposals for the residences out in Aspen, it sounds like it has you thinking right that the idea is bigger -- maybe not bigger than you originally thought. But curious if those proposals indicate something bigger about the opportunity, maybe a quicker maturation behind it or where the mindset is on just the residences as a whole?

Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst : Congrats to the entire team on the very strong results. I do have 2 quick questions. The first one is, could you share some details on the distribution center that's coming on live in terms of what would be the incremental rent or incremental operating expense to run it or the incremental CapEx to build it? So any details around that would be helpful.

Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst : Got it. So that's a great segue to my second question. I did want to go back to that comment that you saw 750 basis points of operating margin expansion in 2020 on 8% of revenue growth. So for this year, you're guiding to 100 to 200 basis points on top line growth of 15% to 20%. So are you being conservative? Because there should be -- I would think there should be natural leverage from all those dollars of sales going through. So is that just for being conservative? Or are there any onetime expenses that are pressuring this year and should go away next year and the years to come to help us sort of understand why operating margin expansion would only be 100 to 200 on 15 to 200 -- 15% to 20% sales growth?

Question: Tami Zakaria - JPMorgan Chase & Co, Research Division - Analyst : Got it. Got it. That's super helpful. So there's really nothing onetime or sort of unnatural something impacting this year. It's just being conservative, prudently conservative.