We have provided examples of our research for public consumption. Please see below and feel free to contact us with any questions and/or comments.

RESTORATION HARDWARE

Our latest model can be dowloaded here: RH FINANCIAL MODEL

RH 1Q25 Preview: Sometimes The Discount Becomes Permanent - 6/8/25

It’s my favorite time of year as Restoration Hardware is set to report 1Q25 earnings this Thursday. Sentiment has shifted negative but never count Gary Friedman out! He certainly has reasons to stick it to Wall Street now that his corporate grifting is increasingly exposed. As always, we provide detailed thoughts.

RH’s Dreams Of SODOSOPA Delayed Again - 10/23/24

Restoration Hardware’s Aspen Guesthouse was delayed yesterday...again. Shady Historical Commission vote held on Rosh Hashanah prevented deciding vote Jewish member from attending. She complained and City Council holding public hearing in 1+ months.

RH’s International Disaster - 9/24/24

Have always been skeptical of Restoration Hardware’s aggressive European expansion. Now appears skepticism justified. Not just from management commentary tone change, but also PricewaterhouseCoopers audited data the UK government provides. Gary Friedman forecasted sales of $50-$250 million in the first year alone.

OTHER RESEARCH NOTES

Nike Distribution Needs A “Personal Genie” - 2/10/25

Tickers: NKE, FL, DKS, KSS, ASO, JWN, JDSPY, LULU, ADS-DE, PUM-DE, ONON

Distribution is the single largest challenge at Nike today. Many seem to think the only issue is innovation and certainly they can improve in that regard. But while it is likely true that innovation solves most problems (i.e. “hot” product often finds a way to sell itself), a company the size of Nike needs both of those engines to run at full steam. Bulls like to think that all Nike needs to do is launch some innovation and everything returns to normal. But what if their distribution problems are largely structural?

“Send In The Cleaners” Under Armour Style - 12/18/24

Tickers: UAA, NKE, FL, DKS, ASO, M, JWN, KSS, JDSPY

If there was ever a time for Under Armour to get its act together, it’s when Nike is in disarray. Under Armour was on a straight trajectory to ample success until Nike became determined to kill their footwear dreams out the gate. The investor day last week (12/12) highlighted both future product and new capabilities. But none of that matters if Under Armour hasn’t cleaned up its own act first.

Ground Zero in the Athletic Footwear Debate - 11/12/24

Tickers: FL, NKE, ONON, DECK, UAA, VFC, ASCCY, ADS-DE, PUM-DE

Nike recently admitted that “the multi-brand environment is very competitive today and it will take time to expand market share”. Newer brands such as On and Hoka have proven formidable competitors, particularly within the Running category. Meanwhile, missteps by Nike have opened the door for traditional niche brands (Asics, Brooks, New Balance) to expand. As the largest retailer of athletic footwear in the US, Foot Locker is ground zero in this once in a generation realignment of the athletic footwear industry.

The Potential Nike Turnaround - 8/14/24

This is not yet another negative Nike note. By now we have all likely read some of the ample Nike thought pieces that discuss the problems that John Donahoe is clearly responsible for. I am happy that everyone is coming out of the woodworks to share information. I didn't even know some of the background that is public today when I wrote Nike & John Donahoe back in mid- April. Alas, that is the perpetual problem of being a sell-side analyst; we always have a small subset of information to base our opinions on. Rather, I strongly feel now is the time to start thinking about the potential Nike recovery path.

Good Luck Shorting Costco - 6/25/24

So much hate towards Costco on Fintwit recently, primarily based on the valuation multiple alone. Really don’t want to spend time on this name but the noise is deafening. The reality here is that NOBODY shorts a stock professionally based on only a valuation thesis. Just like how value managers won’t buy every stock that is cheap – the overall market tends to need something more. That something can’t be only a macro call as that’s probably the easiest thing to hedge (i.e. there are much better ways to execute that idea).

Is This The Ceiling For Floor & Decor? - 4/21/24

I love Floor & Decor. Best story in 20 years for retail. Took it public and am honored I was Bookrunner on the IPO. Seriously love the entire management team, with a similar passion as how they approach their business. Alas, can no longer defend where it trades.

There are many historical examples of the buyside getting over its skis on their own volition, only to later penalize the company itself. You know what Floor & Decor itself is not doing? They are not pumping expectations whatsoever – they have been very fair with all of their guidance assumptions in 2024. Alas when you trade at a 55x+ FY1 P/E, there is not a lot of room for honest debate.

Nike & John Donahoe - 4/14/24

Tickers: NKE

I never understood the thought process behind John Donahoe becoming CEO of Nike. I (luckily) maintained my buy rating on the stock at the time because there wasn't much he could do to change their innovation pipeline at that point, but I certainly flagged my concerns to investors in our discussions regarding longer term risk/reward.

Also, by 2019 most hedge funds had already been burnt shorting Nike in late 2018 so there was likely never going to be meaningful selling pressure for the foreseeable future. And I didn't have a catalyst to point to. Just my unease with John's background. So with that, let's talk about how John Donahoe tried to blame Nike's lack of innovation on remote working last Friday: