RH Provides Clarification on Product Sourcing from China
13 July 2018 - 11:05PM
Business Wire
RH (NYSE: RH) today provided clarification in response to
inaccurate reports regarding the percentage of the Company’s
product sourced from China.
The Company expects to source approximately 35% of its product
from China in fiscal 2018, and that imports from China will be
approximately 25% to 30% in fiscal 2019. In fiscal 2017,
approximately 40% of RH product was sourced from China.
The Office of US Trade Representative announced on July 10th a
proposed 10 percent ad valorem duty on a subset of products
imported from China, inclusive of various furniture and lighting
product categories. The Company has evaluated the supplemental list
issued by the US Trade Representative on July 10th and believes
that a significant subset of the Company’s furniture and lighting
sourced from China would be impacted by the proposed tariff.
The Company believes that it can mitigate the impact of the
proposed 10% tariff on its business to the point that there would
be an immaterial impact on its fiscal 2018 and 2019 financial
results. RH is a significant source of volume for its vendor
partners and believes that its vendor partners would work
collaboratively with the Company in an attempt to neutralize the
potential tariff as well as potentially evaluate sourcing
alternatives. In addition, due to the Company’s differentiated
product offering and scale in the luxury home furnishing market, RH
is well positioned to make pricing adjustments if necessary.
The Company is providing this commentary solely to provide
clarification regarding its product sourcing as well as provide its
initial assessment of the proposal and recognizes that the US Trade
Representative’s latest Chinese tariff proposal is highly
preliminary and likely subject to significant alteration over the
coming months.
About RH
RH (NYSE: RH) is a curator of design, taste and style in the
luxury lifestyle market. The Company offers collections through its
retail galleries, Source Books, and online at RH.com, RHModern.com,
and Waterworks.com.
Forward-Looking
Statements
Some of the statements in this press release are
“forward-looking” and are made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995.
These “forward-looking” statements include statements relating to,
among other things, the expected percentage of the Company’s
product to be sourced from China in fiscal 2018 and 2019, the
impact of the proposed tariff on the Company and its fiscal 2018
and 2019 financials, the Company’s related mitigation activities,
the Company’s vendor partners working collaboratively with the
Company to neutralize the impact of the tariff, the Company’s
ability to make pricing adjustments and any statements or
assumptions underlying any of the foregoing. You can identify
forward-looking statements by the fact that they do not relate
strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,”
“project,” “plan,” “intend,” “believe,” “may,” “will,” “should,”
“likely” and other words and terms of similar meaning in connection
with any discussion of the timing or nature of future events. We
cannot assure you that future developments affecting us will be
those that we have anticipated. Important risks and uncertainties
that could cause actual results to differ materially from our
expectations or the assumptions set forth in this release include,
our ability to obtain our products in a timely fashion or in the
quantities required or at a favorable cost as well as those risks
and uncertainties disclosed under the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in RH’s most recent Form 10-K
and Form 10-Q filed with the Securities and Exchange Commission,
and similar disclosures in subsequent reports filed with the SEC,
which are available on our investor relations website at ir.rh.com
and on the SEC website at www.sec.gov. Any forward-looking
statement made by us in this press release speaks only as of the
date on which we make it. We undertake no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by any applicable securities laws.
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version on businesswire.com: https://www.businesswire.com/news/home/20180713005211/en/
RHCammeron McLaughlin, 415-945-4998SVP, Investor
Relations & Strategycmclaughlin@rh.com
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