Rh earnings calls

Early demand and pricing for RH Estates

Q (Steven Zaccone · Citi): He asked about early demand, whether Estates brings new customers, how this launch compares to past ones, and why a 45% price premium is justified.

A: Management said Estates is a different, exclusive, high-quality product not found elsewhere and is drawing many new customers. They said pricing reflects design, quality and value, and customers perceive it as a strong value versus auction or trade pricing.

"These products were being sold for to 2 to 3x our retail." — Gary Friedman (CEO·CHAIR)

Back-half guide and Estates contribution

Q (Simeon Gutman · Morgan Stanley): He asked whether the stair-step revenue increases in Q3 and Q4 are from Estates and what gives confidence in the acceleration.

A: Management pointed to the press release numbers: the guide already includes a 6.5 point backlog reduction, RH Estates at 8 points and new Galleries other at 4 points. They said their history of product launches and math gives them confidence the acceleration is realistic and possibly conservative.

"RH Estates at 8 points and new Galleries other at 4 points." — Gary Friedman (CEO·CHAIR)

Sourcebook vs gallery impact on Estates demand

Q (Steven Forbes · Guggenheim): He asked whether the 8% fourth-quarter contribution is based on Sourcebook-only demand, how much gallery space will be dedicated, and how weekly demand is scaling.

A: Management said they already have data from mail, website orders and wait times to forecast demand, and the big revenue lift comes when product is in the galleries. They emphasized pent-up customer demand to see goods in person, especially at the luxury end.

"Based on what we're seeing, then there's -- so there's in stocks, there's wait times, then there's -- then the big move is when the product goes into the galleries." — Gary Friedman (CEO·CHAIR)

How big Estates can become and store economics

Q (Maksim Rakhlenko · TD Cowen): He asked how much larger Estates could get into next year and how unit economics compare to legacy gallery formats.

A: Management said they do not provide demand growth guidance today but expect Estates to be a multi-year build, similar to RH Modern, with several years of growth. They said the new single-floor compound format costs less to build, can deliver more product per square foot, and should improve returns and reduce capital spending.

"Yes. I would say there's a good 5 years of building here of a new business and a growing business." — Gary Friedman (CEO·CHAIR)

Core inventory and promotions ahead of Estates

Q (Christopher Nardone · BofA): He asked about the health of core inventory and whether promotions will be needed to clear space for Estates into 2027.

A: Management said Estates will be incremental and not a reason to markdown core merchandise, though some gallery items will be rotated to outlets. They also noted the broader category is promotional today, but RH's margins are holding and Estates is a new, leverageable category for the platform.

"Estates, it is going to be incremental to the assortment." — Gary Friedman (CEO·CHAIR)

Europe rollouts: London, Paris, Milan trends

Q (Cristina Fernandez · Telsey Advisory Group): She asked whether European customers are buying or if demand is trade-driven, and for updates on Paris and Milan ramping.

A: Management said August is a slow month in Europe and they are in learning mode across countries because shopping behaviors differ. They noted London had a head start—English language, many expats and strong existing shipping—and that awareness and demand in London ramped quickly after opening.

Protecting Estates designs from knock-offs

Q (Marius Morar · Zelman): He asked how Estates will be easier to defend from knock-offs, given the industry's history of mixed success enforcing design rights.

A: Management said many acquired brands already had strong IP and RH has filed for design patents on almost everything to protect original RH designs. They added that RH intends to be aggressive legally and that receiving a patent-pending letter often deters rivals from copying.

"We've filed for design patents on almost everything." — Gary Friedman (CEO·CHAIR)

Tariff refunds and fuel cost mitigation

Q (Casey McKenzie · Oppenheimer): He asked whether the $50 million unplanned supply chain cost is still ramping and how to mitigate persistent fuel cost increases if refunds do not continue.

A: Management said everyone is mitigating where possible but global fuel and raw material cost increases are significant and likely to persist for months. They said there is no magic solution and that costs are broadly rising, citing other retailers' tariff refunds but noting inflation in the pipeline.

"I keep thinking, gosh, it is like my entire career, and I have been doing this a long time, I never saw a housing market that was down longer than 18 months." — Gary Friedman (CEO·CHAIR)

Trade program revamp and designer activation

Q (Jonathan Matuszewski · Jefferies): He asked for early signs of success from the revamped trade program and whether Estates is being activated differently with interior designers.

A: Management said the trade program relaunch has been very well received, with designers re-engaging and pipeline building enough to offset the discount. They said they will do more gallery events, bespoke and COM options, and high service support to win large design projects and keep trade customers.

"Our trade teams are over the moon that we launched the new program." — Gary Friedman (CEO·CHAIR)