RH

Organizational and management · Organizational structure and reporting

In connection with such changes to our senior leadership structure, we also implement changes in personnel and reductions in force, which may result in us incurring severance costs and other reorganization charges and expenses.

Reputation and brand · Brand damage and negative publicity

Our business depends on the strength of our brand and continuing investments in our brand will be an important requirement for our future success... With the growth in importance and the impact of social media, any negative publicity from product defects, recalls or service failures may be magnified and reach a large portion of our customer base in a short period of time.

Corporate governance · Internal controls and risk management

Any failure to establish and maintain effective disclosure controls and procedures and internal controls over financial reporting could result in material misstatements in our financial statements and failure to meet our reporting and financial obligations.

Reputation and brand · Product recalls and public safety

Our products have in the past been, and may in the future be, subject to recall for product safety and compliance reasons... Concerns of product safety and compliance could result in future voluntary or involuntary removal of products, product recalls, other actions by applicable government authorities or product liability, personal injury or property damage claims.

Technology infrastructure · Technology systems and infrastructure failure

We depend largely upon our information technology systems in the conduct of all aspects of our operations, many of which we have only adopted and implemented within the past several years or are in the midst of implementing... Any material interruptions or failures in our systems or the products or systems of our third-party vendors or other third parties that we share data with may have a material adverse effect on our business or results of operations.

Cybersecurity and data protection · Data privacy and protection regulations

We may be exposed to risks and costs associated with protecting the integrity and security of our customers' information... For example, in California, the California Consumer Privacy Act (the 'CCPA'), which went into effect on January 1, 2020, imposes requirements on companies handling data of California residents.

Technology infrastructure · Disaster recovery and business continuity

Further, any significant interruption in the operation of our customer service centers could also reduce our ability to receive and process orders and provide products and services to our Galleries and customers.

Market position and competition · Pricing pressure and margin compression

Many of our competitors seek to compete with us by offering products that are similar to our merchandise at lower price points... To the extent that we do not respond effectively to these and other sources of competition to our business, we may lose market share to our competitors and suffer negative consequences.

Strategic execution · Geographic expansion and market entry

We opened RH England in June 2023, RH Munich and RH Düsseldorf in November 2023, RH Brussels in March 2024, RH Madrid in June 2024 and RH Paris in September 2025... any new businesses we enter or expansion of our existing business into new markets, both domestically and internationally, may expose us to additional operational risks, such as risks related to political, social and economic instability and disruptions.

Strategic execution · Strategic transformation and turnaround risks

We are undertaking a large number of business initiatives at the same time, including international expansion and exploring opportunities to expand into new categories and complementary businesses. If these initiatives are not successful, they may have a negative impact on our results of operations.

Market and investment · Market volatility and economic cycles

We have experienced significant fluctuations in the growth of our business in the past and may continue to experience wide fluctuations in our quarterly performance... our rates of revenue growth have sharply fluctuated from quarter-to-quarter and we expect volatility in the rates of our growth to continue in future quarterly periods.

Credit and liquidity · Access to capital and financing

We will have significant capital requirements for the operation of our business in the near term if we are to continue to pursue all of our current business initiatives... Our capital expenditures in connection with our expansion plans and other investments may require us to rely significantly on our existing credit facilities and other sources of financing.

Capital structure and performance · Financial performance volatility

Our common stock price may be volatile or may decline regardless of our operating performance. The market price for our common stock has experienced extreme volatility. As a retailer, our results are significantly affected by factors outside our control, particularly consumer spending and consumer confidence.

Supply chain and procurement · Raw material availability and cost volatility

Our results may be adversely affected by fluctuations in raw materials, energy and transportation costs and currency exchange rates. Increases in the prices of the components and raw materials used in our products and other costs such as transportation could negatively affect the sales of our merchandise and our product margins.

Core operations · Capacity utilization and efficiency

If we fail to accurately anticipate the future capacity requirements of our distribution centers, we may experience delays and difficulties in fulfilling orders and delivering merchandise to customers in a timely manner.

Tax and financial reporting · Financial reporting and accounting standards

Changes to accounting rules or regulations may adversely affect our results of operations. New accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future.

Tax and financial reporting · Tax compliance and changes in tax law

Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on global earnings and could increase the nominal and effective U.S. corporate tax rate... Many countries are actively considering, have proposed or have enacted changes to their tax laws based upon the Pillar II proposals.

Data and privacy · Consumer privacy and consent

The GDPR requires companies to meet more stringent requirements regarding the handling of personal data of individuals in the European Union than were required under predecessor European Union requirements.

Industry regulation · Regulatory compliance and changes

Compliance with laws, including laws relating to our business activities outside of the United States, may be costly, and changes in laws could make conducting our business more expensive or otherwise change the way we do business.

Economic and market conditions · Inflation and deflation pressures

macroeconomic conditions, including inflation, interest rates and mortgage rates and other factors affecting the housing market... Changes in prices for raw materials, energy and transportation and fluctuations in currency exchange rates are dependent on a number of factors beyond our control, including macroeconomic factors that may affect commodity prices.