Steven Paul Forbes's questions to RH (RH) leadership • Q2 2026
Question
Steven Paul Forbes inquired about the potential for continued net inventory reduction on the balance sheet, given changes in average tariff rates and winding down excess inventory. He also asked about the visibility and risk surrounding the planned launch of a new brand extension in the spring.
Answer
Chairman and CEO Gary Friedman stated there's no risk to the new brand extension launch unless new 'silly tariff' investigations occur, reiterating concerns about tariffs' disruptive impact on the industry and potential job losses. He highlighted RH's strong leverage and sourcing capabilities. CFO Jack Preston explained that inventory reduction aims for a turn rate closer to the mid-twos, with further room for improvement beyond the $200-$300 million reduction. Friedman added that the new concept is the 'biggest idea' with 'lowest risk' and has $2 billion potential, with three galleries planned for launch. He confirmed Greenwich and San Francisco galleries for the spring launch, with West Hollywood pending permits, and discussed the expansion of the LA ecosystem.