Curious, Does anyone own or have an interest in RH? BRK has a position and it has come down to a market multiple of 21. Just realized it had a nice run up then big fall (now 40% off its high) within the last 12 months with pretty good financials, consistent margins and reasonable debt. Elevated (12%) short interest. Curious if anyone owns/follows/has opinion?

From Seeking Alpha (12-30-21):

“Fueled by its conviction, that Americans will continue to focus on home improvement over the fourth quarter, RH raised its financial outlook for FY2021 for the third time during the year, despite the delays in production and uncertainties associated with freight.

Based on the update, the firm now anticipates revenue growth of between 32% to 33% from the prior range of 31% to 33%. In addition, operating margins are expected to come in between 25.3% and 25.5%, compared to the prior outlook of 24.9% to 25.5%.

Balance Sheet Remains Strong. At the end of F3Q2021, RH had a cash and cash equivalents balance of ~$2.2 billion and long-term debt of ~$2.38 billion on its balance sheet. During the period, the company recapitalized its debt, raising $2 billion through a term loan. Moreover, RH has $354 million remaining on a revolving credit line, providing it with ample liquidity. Given these factors, we believe the firm is unlikely to renege on its debt-related commitments.

Bottom Line

There are very few true luxury brands in the world. Given the attention to detail, excellent design, and superior quality that appear to be the hallmark of RH products and services, it does appear that the company is a luxury brand…”

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Refresh my memory : RH?

Used to be Restoration Hardware Holdings, Inc.(changed its name to RH in January 2017)

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