Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 31, 2021 | Sep. 03, 2021 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 31, 2021 | |
Entity File Number | 001-35720 | |
Entity Registrant Name | RH | |
Entity Tax Identification Number | 45-3052669 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 15 Koch Road | |
Entity Address, City or Town | Corte Madera | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94925 | |
City Area Code | 415 | |
Local Phone Number | 924-1005 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | RH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,413,557 | |
Entity Central Index Key | 0001528849 | |
Current Fiscal Year End Date | --01-29 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 291,461 | $ 100,446 |
Accounts receivable-net | 59,798 | 59,474 |
Merchandise inventories | 645,987 | 544,227 |
Prepaid expense and other current assets | 140,570 | 97,337 |
Total current assets | 1,137,816 | 801,484 |
Property and equipment-net | 1,131,501 | 1,077,198 |
Operating lease right-of-use assets | 553,834 | 456,164 |
Goodwill | 141,132 | 141,100 |
Tradenames, trademarks and other intangible assets | 72,584 | 71,663 |
Deferred tax assets | 50,047 | 49,924 |
Equity method investments | 97,412 | 100,603 |
Other non-current assets | 282,826 | 200,177 |
Total assets | 3,467,152 | 2,898,313 |
Current liabilities: | ||
Accounts payable and accrued expenses | 426,785 | 424,422 |
Deferred revenue and customer deposits | 397,161 | 280,641 |
Operating lease liabilities | 74,074 | 71,524 |
Federal and state tax payable | 49,539 | |
Other current liabilities | 92,336 | 142,691 |
Total current liabilities | 1,229,000 | 921,632 |
Non-current operating lease liabilities | 542,510 | 448,169 |
Non-current finance lease liabilities | 523,797 | 485,481 |
Other non-current obligations | 15,458 | 16,981 |
Total liabilities | 2,630,294 | 2,451,287 |
Commitments and contingencies (Note 16) | ||
Mezzanine equity-convertible senior notes (Note 9) | 30,515 | |
Stockholders' equity: | ||
Preferred stock-$0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of July 31, 2021 and January 30, 2021 | ||
Common stock-$0.0001 par value per share, 180,000,000 shares authorized, 21,407,717 shares issued and outstanding as of July 31, 2021; 20,995,387 shares issued and outstanding as of January 30, 2021 | 2 | 2 |
Additional paid-in capital | 583,112 | 581,897 |
Accumulated other comprehensive income | 3,265 | 2,565 |
Retained earnings (accumulated deficit) | 219,964 | (137,438) |
Total stockholders' equity | 806,343 | 447,026 |
Total liabilities, mezzanine equity and stockholders' equity | 3,467,152 | 2,898,313 |
Equipment promissory notes | ||
Current liabilities: | ||
Equipment promissory notes-net | 2,115 | 14,614 |
Convertible senior notes due 2023 | ||
Current liabilities: | ||
Convertible senior notes due-net current | 172,141 | 2,354 |
Convertible senior notes due-net noncurrent | 93,867 | 282,956 |
Convertible senior notes due 2024 | ||
Current liabilities: | ||
Convertible senior notes due-net current | 66,503 | |
Convertible senior notes due-net noncurrent | $ 223,547 | $ 281,454 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 31, 2021 | Jan. 30, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 21,407,717 | 20,995,387 |
Common stock, shares outstanding | 21,407,717 | 20,995,387 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||
Net revenues | $ 988,859 | $ 709,282 | $ 1,849,651 | $ 1,192,177 |
Cost of goods sold | 501,183 | 376,863 | 954,998 | 660,104 |
Gross profit | 487,676 | 332,419 | 894,653 | 532,073 |
Selling, general and administrative expenses | 238,688 | 195,851 | 457,777 | 360,052 |
Income from operations | 248,988 | 136,568 | 436,876 | 172,021 |
Other expenses | ||||
Interest expense-net | 13,581 | 19,418 | 26,889 | 39,047 |
Tradenames, trademarks and other intangible assets | 20,459 | |||
(Gain) loss on extinguishment of debt | 3,166 | (152) | 3,271 | (152) |
Total other expenses | 16,747 | 19,266 | 30,160 | 59,354 |
Income before income taxes | 232,241 | 117,302 | 406,716 | 112,667 |
Income tax expense | 3,009 | 18,879 | 44,733 | 17,456 |
Income before equity method investments | 229,232 | 98,423 | 361,983 | 95,211 |
Share of equity method investments losses | (2,486) | (4,581) | ||
Net income | $ 226,746 | $ 98,423 | $ 357,402 | $ 95,211 |
Weighted-average shares used in computing basic net income per share | 21,166,638 | 19,386,115 | 21,084,941 | 19,314,479 |
Basic net income per share | $ 10.71 | $ 5.08 | $ 16.95 | $ 4.93 |
Weighted-average shares used in computing diluted net income per share | 31,979,098 | 26,564,705 | 31,594,555 | 25,383,730 |
Diluted net income per share | $ 7.09 | $ 3.71 | $ 11.31 | $ 3.75 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | ||||
Net income | $ 226,746 | $ 98,423 | $ 357,402 | $ 95,211 |
Net gains (losses) from foreign currency translation | (648) | 3,290 | 700 | 918 |
Total comprehensive income | $ 226,098 | $ 101,713 | $ 358,102 | $ 96,129 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Mezzanine Equity | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Treasury Stock | Total |
Balances at Feb. 01, 2020 | $ 2 | $ 430,662 | $ (2,760) | $ (409,253) | $ 18,651 | ||
Balances, shares at Feb. 01, 2020 | 19,236,681 | ||||||
Stock-based compensation | 12,476 | 12,476 | |||||
Issuance of restricted stock, Shares | 3,192 | ||||||
Vested and delivered restricted stock units | (6,818) | (6,818) | |||||
Vested and delivered restricted stock units, Shares | 70,292 | ||||||
Exercise of stock options | 8,125 | 8,125 | |||||
Exercise of stock options, Shares | 176,278 | ||||||
Repurchases of common stock | $ (72) | (72) | |||||
Repurchases of common stock, Shares | (600) | 600 | |||||
Retirement of treasury stock | (72) | $ 72 | |||||
Retirement of treasury stock, Shares | (600) | ||||||
Settlement of convertible senior notes | (315,708) | $ 315,708 | |||||
Settlement of convertible senior notes, Shares | 1,131,645 | (1,131,645) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 315,713 | $ (315,713) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (1,131,662) | 1,131,662 | |||||
Net income | 95,211 | 95,211 | |||||
Net gains (losses) from foreign currency translation | 918 | 918 | |||||
Balances at Aug. 01, 2020 | $ 2 | 444,378 | (1,842) | (314,042) | $ (5) | 128,491 | |
Balances, shares at Aug. 01, 2020 | 19,485,826 | 17 | |||||
Balances at May. 02, 2020 | $ 2 | 436,799 | (5,132) | (412,465) | $ (72) | 19,132 | |
Balances, shares at May. 02, 2020 | 19,264,127 | 600 | |||||
Stock-based compensation | 6,755 | 6,755 | |||||
Issuance of restricted stock, Shares | 3,192 | ||||||
Vested and delivered restricted stock units | (6,437) | (6,437) | |||||
Vested and delivered restricted stock units, Shares | 60,006 | ||||||
Exercise of stock options | 7,328 | 7,328 | |||||
Exercise of stock options, Shares | 158,518 | ||||||
Retirement of treasury stock | (72) | $ 72 | |||||
Retirement of treasury stock, Shares | (600) | ||||||
Settlement of convertible senior notes | (315,708) | $ 315,708 | |||||
Settlement of convertible senior notes, Shares | 1,131,645 | (1,131,645) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 315,713 | $ (315,713) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (1,131,662) | 1,131,662 | |||||
Net income | 98,423 | 98,423 | |||||
Net gains (losses) from foreign currency translation | 3,290 | 3,290 | |||||
Balances at Aug. 01, 2020 | $ 2 | 444,378 | (1,842) | (314,042) | $ (5) | 128,491 | |
Balances, shares at Aug. 01, 2020 | 19,485,826 | 17 | |||||
Balances at Jan. 30, 2021 | $ 2 | 581,897 | 2,565 | (137,438) | 447,026 | ||
Balances, shares at Jan. 30, 2021 | 20,995,387 | ||||||
Stock-based compensation | 25,289 | 25,289 | |||||
Issuance of restricted stock, Shares | 1,260 | ||||||
Vested and delivered restricted stock units | (18,648) | (18,648) | |||||
Vested and delivered restricted stock units, Shares | 37,698 | ||||||
Exercise of stock options | 25,979 | 25,979 | |||||
Exercise of stock options, Shares | 373,369 | ||||||
Settlement of convertible senior notes | (82,135) | $ 81,245 | (890) | ||||
Settlement of convertible senior notes, Shares | 119,604 | (119,601) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 81,245 | $ (81,245) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (119,601) | 119,601 | |||||
Reclassification of equity component related to early converted senior notes outstanding | (30,515) | (30,515) | |||||
Net income | 357,402 | 357,402 | |||||
Net gains (losses) from foreign currency translation | 700 | 700 | |||||
Balances at Jul. 31, 2021 | $ 2 | 583,112 | 3,265 | 219,964 | 806,343 | ||
Balances, shares at Jul. 31, 2021 | 21,407,717 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Reclassification of equity component related to early converted senior notes outstanding | $ 30,515 | ||||||
Balances at Jul. 31, 2021 | 30,515 | ||||||
Balances at May. 01, 2021 | $ 2 | 597,329 | 3,913 | (6,782) | 594,462 | ||
Balances, shares at May. 01, 2021 | 21,020,538 | ||||||
Stock-based compensation | 10,089 | 10,089 | |||||
Issuance of restricted stock, Shares | 1,260 | ||||||
Vested and delivered restricted stock units | (17,721) | (17,721) | |||||
Vested and delivered restricted stock units, Shares | 34,891 | ||||||
Exercise of stock options | 24,586 | 24,586 | |||||
Exercise of stock options, Shares | 351,027 | ||||||
Settlement of convertible senior notes | (78,621) | $ 77,965 | (656) | ||||
Settlement of convertible senior notes, Shares | 112,297 | (112,296) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 77,965 | $ (77,965) | |||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (112,296) | 112,296 | |||||
Reclassification of equity component related to early converted senior notes outstanding | (30,515) | (30,515) | |||||
Net income | 226,746 | 226,746 | |||||
Net gains (losses) from foreign currency translation | (648) | (648) | |||||
Balances at Jul. 31, 2021 | $ 2 | $ 583,112 | $ 3,265 | $ 219,964 | $ 806,343 | ||
Balances, shares at Jul. 31, 2021 | 21,407,717 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Reclassification of equity component related to early converted senior notes outstanding | 30,515 | ||||||
Balances at Jul. 31, 2021 | $ 30,515 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Feb. 01, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net income | $ 357,402 | $ 95,211 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | $ 22,670 | $ 25,342 | 46,556 | 50,212 | |
Non-cash operating lease cost | 35,541 | 31,355 | |||
Tradename impairment | 20,459 | ||||
Asset impairments | 7,354 | 4,783 | |||
Loss on sale leaseback transaction | 9,352 | 9,352 | |||
Amortization of debt discount | 17,461 | 25,378 | |||
Accretion of debt discount upon settlement of debt | (5,070) | (84,003) | |||
Stock-based compensation expense | 10,100 | 6,900 | 25,431 | 12,689 | |
Non-cash finance lease interest expense | 6,607 | 5,948 | 12,757 | 11,729 | |
Product recalls | 500 | 4,780 | |||
Deferred income taxes | (239) | ||||
Loss on extinguishment of debt | 3,166 | (152) | 3,271 | (152) | $ 3,166 |
Share of equity method investments losses | 2,486 | 4,581 | |||
Other non-cash items | (4,069) | 2,404 | |||
Change in assets and liabilities: | |||||
Accounts receivable | (306) | (6,431) | |||
Merchandise inventories | (101,641) | (48,984) | |||
Prepaid expense and other assets | (57,919) | (10,307) | |||
Landlord assets under construction-net of tenant allowances | (43,352) | (22,934) | |||
Accounts payable and accrued expenses | 6,930 | (13,127) | |||
Deferred revenue and customer deposits | 116,492 | 67,647 | |||
Other current liabilities | (51,661) | 8,777 | |||
Current and non-current operating lease liabilities | (38,933) | (18,388) | |||
Other non-current obligations | (14,368) | (12,327) | |||
Net cash provided by operating activities | 316,718 | 128,275 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Capital expenditures | (82,138) | (47,531) | |||
Equity method investments | (1,939) | (3,050) | |||
Proceeds from sale of assets | 25,006 | ||||
Net cash used in investing activities | (84,077) | (25,575) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Repayments under promissory and equipment security notes | (11,446) | (5,408) | |||
Debt issuance costs | (3,634) | ||||
Repayments of convertible senior notes | (28,111) | (215,846) | |||
Principal payments under finance leases | (7,108) | (4,641) | |||
Proceeds from exercise of stock options | 25,979 | 8,125 | |||
Tax withholdings related to issuance of stock-based awards | (18,648) | (6,818) | |||
Net cash used in financing activities | (42,968) | (132,988) | |||
Effects of foreign currency exchange rate translation | 92 | 17 | |||
Net increase (decrease) in cash and cash equivalents and restricted cash equivalents | 189,765 | (30,271) | |||
Cash and cash equivalents and restricted cash equivalents | |||||
Beginning of period-cash and cash equivalents | 100,446 | 47,658 | |||
Beginning of period-restricted cash equivalents (acquisition related escrow deposits) | 6,625 | ||||
Beginning of period-cash and cash equivalents | 107,071 | 47,658 | |||
End of period-cash and cash equivalents | 291,461 | 17,387 | 291,461 | 17,387 | 47,658 |
End of period-restricted cash equivalents (acquisition related escrow deposits) | 5,375 | 5,375 | |||
End of period-cash and cash equivalents and restricted cash equivalents | $ 296,836 | $ 17,387 | 296,836 | 17,387 | $ 47,658 |
Non-cash transactions: | |||||
Property and equipment additions in accounts payable and accrued expenses at period-end | 14,696 | 19,978 | |||
Landlord asset additions in accounts payable and accrued expenses at period-end | 32,290 | 17,515 | |||
Reclassification of assets from landlord assets under construction to finance lease right-of-use assets | 68,441 | ||||
Shares issued on settlement of convertible senior notes | (82,135) | (315,708) | |||
Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes | $ 81,245 | 315,713 | |||
Asset based credit facility | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Borrowings under asset based credit facility | 283,200 | ||||
Repayments under asset based credit facility | $ (191,600) |
The Company
The Company | 6 Months Ended |
Jul. 31, 2021 | |
The Company | |
The Company | NOTE 1—THE COMPANY Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” or the “Company”), is a leading luxury retailer in the home furnishings market that offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of July 31, 2021, we operated a total of 66 RH Galleries and 38 RH outlet stores in 30 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from our records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of July 31, 2021, and the results of operations for the three and six months ended July 31, 2021 and August 1, 2020. Our current fiscal year, which consists of 52 weeks, ends on January 29, 2022 (“fiscal 2021”). Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The preparation of our condensed consolidated financial statements in conformity with GAAP requires our senior leadership team to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the condensed consolidated financial statements. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the novel coronavirus disease (“COVID-19” or “the pandemic”) using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, intangible and other long-lived assets. Our current assessment of these estimates is included in our condensed consolidated financial statements as of and for the three and six months ended July 31, 2021. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our condensed consolidated financial statements in future reporting periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 (the “2020 Form 10-K”). The results of operations for the three and six months ended July 31, 2021 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Our business, like the businesses of retailers generally, is subject to uncertainty surrounding the financial impact of the pandemic as discussed in Recent Developments—COVID-19 Recent Developments—COVID-19 The COVID-19 outbreak in the first quarter of fiscal 2020 caused disruption to our business operations beginning in the first quarter of fiscal 2020. The pandemic has continued since the initial outbreak and has included spikes and outbreaks in various locations around the world including as a result of new strains of the COVID virus such as the “Delta” variant. In our initial response to the health crisis, we undertook immediate adjustments to our business operations including temporarily closing all of our retail locations and Restaurants, curtailing expenses, and delaying investments including scaling back some inventory orders while we assessed the status of our business. Our approach to the crisis evolved quickly as our business trends substantially improved during the second through fourth fiscal quarters of fiscal 2020 as a result of both the reopening of most of our retail locations and also strong consumer demand for our products. Operational restrictions related to the pandemic affecting our Galleries and hospitality locations continued to fluctuate through the second quarter of 2021 based upon changes in local conditions and regulations. As of September 3, 2021, all of our Galleries, Outlets and Restaurants were open. Our overall customer demand in specific markets has generally correlated favorably with our customers’ ability to experience our Galleries and Outlets. Although our business has strengthened during the period from the second quarter of fiscal 2020 and continuing into fiscal 2021, consumer spending patterns may shift away from spending on the home and home-related categories, such as home furnishings, as pandemic restrictions are lifted and consumers return to pre-COVID consumption trends, such as spending on travel and leisure and other activities. In addition, various constraints in our merchandise supply chain have resulted in some delays in our ability to convert business demand into revenues at normal historical rates. We anticipate that the backlog of orders for merchandise from our vendors, coupled with business conditions related to the pandemic, will continue to adversely affect the capacity of our vendors and supply chain to meet our merchandise demand levels during fiscal 2021. It may take several quarters for inventory receipts and manufacturing to catch up to the increase in customer demand and as a result the exact timing cannot be accurately predicted due to ongoing uncertainty of the continuing impact of the pandemic on our global supply chain. In particular, business circumstances and operational conditions in numerous international locations where our vendors operate are subject to ongoing risks, and regions in which our vendors have production facilities, most notably Vietnam, have experienced various surges in outbreaks and, in some cases, facility closures related to the pandemic. As a result, the ongoing nature of the pandemic may continue to adversely affect our business operations in various jurisdictions, which could, in turn, have a negative impact on our vendors and supply chain, and therefore, our business. Our decisions regarding the sources and uses of capital in our business will continue to reflect and adapt to changes in market conditions and our business including further developments with respect to the pandemic. For more information, refer to the section entitled Risk Factors |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 6 Months Ended |
Jul. 31, 2021 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS New Accounting Standards or Updates Adopted Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes New Accounting Standards or Updates Not Yet Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 6 Months Ended |
Jul. 31, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Assets | NOTE 3—PREPAID EXPENSE AND OTHER ASSETS Prepaid expense and other current assets consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Prepaid expense and other current assets $ 53,970 $ 42,079 Vendor deposits 27,796 12,519 Capitalized catalog costs 17,606 19,067 Federal and state tax receivable 15,863 — Promissory notes receivable, including interest (1) 14,083 13,569 Right of return asset for merchandise 6,502 7,453 Acquisition related escrow deposits 4,750 2,650 Total prepaid expense and other current assets $ 140,570 $ 97,337 (1) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Equity Method Investments . Other non-current assets consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Landlord assets under construction—net of tenant allowances $ 201,375 $ 135,531 Initial direct costs prior to lease commencement 46,531 36,770 Capitalized cloud computing costs—net (1) 10,300 7,254 Other deposits 7,534 5,287 Deferred financing fees 4,235 1,525 Acquisition related escrow deposits 1,030 3,975 Other non-current assets 11,821 9,835 Total other non-current assets $ 282,826 $ 200,177 (1) Presented net of accumulated amortization of $1.9 million and $0.5 million as of July 31, 2021 and January 30, 2021, respectively. |
Goodwill, Tradenames, Trademark
Goodwill, Tradenames, Trademarks and Other Intangible Assets | 6 Months Ended |
Jul. 31, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | NOTE 4—GOODWILL, TRADENAMES, TRADEMARKS AND OTHER INTANGIBLE ASSETS The following sets forth the goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks (See Note 17— Segment Reporting in thousands FOREIGN JANUARY 30, CURRENCY JULY 31, 2021 ADDITIONS TRANSLATION 2021 RH Segment Goodwill $ 141,100 $ — $ 32 $ 141,132 Tradenames, trademarks and other intangible assets 54,663 921 — 55,584 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. Waterworks Tradename Impairment During the first quarter of fiscal 2020, as a result of the COVID-19 health crisis and related Showroom closures and slowdown in construction activity, management updated the long-term financial projections for the Waterworks reporting unit which resulted in a significant decrease in forecasted revenues and profitability. We performed an interim impairment test on the Waterworks tradename and the estimated future cash flows of the Waterworks reporting unit indicated the fair value of the tradename asset was below its carrying amount. We determined fair value utilizing a discounted cash flow methodology under the relief-from-royalty method. Significant assumptions under this method include forecasted net revenues and the estimated royalty rate, expressed as a percentage of revenues, in addition to the discount rate based on the weighted-average cost of capital. Based on the impairment test performed, we concluded that the Waterworks reporting unit tradename was impaired as of May 2, 2020. As a result, we recognized a $20.5 million non-cash impairment charge for the Waterworks reporting unit tradename during the three months ended May 2, 2020. |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Jul. 31, 2021 | |
Equity Method Investments. | |
Equity Method Investments | NOTE 5—EQUITY METHOD INVESTMENTS Equity method investments represent our 50 percent membership interests in three privately-held limited liability companies in Aspen, Colorado (each, an “Aspen LLC” and collectively, the “Aspen LLCs” or the “equity method investments”) which were formed during fiscal 2020, and have the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado. As we do not have a controlling financial interest in the Aspen LLCs but have the ability to exercise significant influence over the Aspen LLCs, we account for these investments using the equity method of accounting. During the three and six months ended July 31, 2021, we recorded our proportionate share of equity method investments losses of $2.5 million and $4.6 million, respectively, which is included in the condensed consolidated statements of income and a corresponding decrease to the carrying value of equity method investments As of July 31, 2021, $14.1 million of promissory notes receivable, inclusive of accrued interest, are outstanding with the managing member, which are included in prepaid expense and other current assets An affiliate of the managing member of the Aspen LLCs became the landlord of an additional RH Design Gallery in the first quarter of fiscal 2021. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jul. 31, 2021 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 6—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Accounts payable $ 238,607 $ 224,906 Accrued compensation 71,748 84,860 Accrued freight and duty 30,685 29,754 Accrued sales taxes 27,158 23,706 Accrued occupancy 26,680 17,671 Accrued professional fees 9,135 5,383 Accrued catalog costs 3,979 4,354 Deferred consideration for asset purchase — 14,387 Other accrued expenses 18,793 19,401 Total accounts payable and accrued expenses $ 426,785 $ 424,422 Other current liabilities consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Current portion of equipment promissory notes $ 24,072 $ 22,747 Allowance for sales returns 23,574 25,559 Unredeemed gift card and merchandise credit liability 20,322 19,173 Finance lease liabilities 14,231 14,671 Product recall reserve 5,780 8,181 Federal and state tax payable — 49,539 Other current liabilities 4,357 2,821 Total other current liabilities $ 92,336 $ 142,691 Contract Liabilities We defer revenue associated with merchandise delivered via the home-delivery channel. We expect that substantially all of the deferred revenue and customer deposits as of July 31, 2021 will be recognized within the next six months as the performance obligations are satisfied. New membership fees are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, based on historical trends of sales to members. Membership renewal fees are recorded as deferred revenue when collected from customers and are recognized as revenue on a straight-line basis over the membership period, or one year. In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards. During the three months ended July 31, 2021 and August 1, 2020, we recognized $4.9 million and $6.5 million, respectively, of revenue related to previous deferrals related to our gift cards. During the six months ended July 31, 2021 and August 1, 2020, we recognized $9.8 million and $10.6 million, respectively, of revenue related to previous deferrals related to our gift cards. During the three months ended July 31, 2021 and August 1, 2020, we recorded gift card breakage of $0.5 million and $0.2 million, respectively. During the six months ended July 31, 2021 and August 1, 2020, we recorded gift card breakage of $0.9 million and $0.8 million, respectively. We expect that approximately 75% of the remaining gift card liabilities as of July 31, 2021 will be recognized when the gift cards are redeemed by customers. |
Other Non-Current Obligations
Other Non-Current Obligations | 6 Months Ended |
Jul. 31, 2021 | |
Other Non-Current Obligations. | |
Other Non-Current Obligations | NOTE 7—OTHER NON-CURRENT OBLIGATIONS Other non-current obligations consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Deferred payroll taxes $ 4,461 $ 4,461 Rollover units and profit interests (1) 3,632 3,490 Unrecognized tax benefits 3,346 3,114 Other non-current obligations 4,019 5,916 Total other non-current obligations $ 15,458 $ 16,981 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 15 — Stock-Based Compensation . |
Leases
Leases | 6 Months Ended |
Jul. 31, 2021 | |
Leases | |
Leases | NOTE 8—LEASES Lease costs—net consist of the following ( in thousands THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Operating lease cost (1) $ 25,590 $ 20,181 $ 49,157 $ 40,907 Finance lease costs Amortization of leased assets (1) 10,796 10,125 21,714 19,713 Interest on lease liabilities (2) 6,607 5,948 12,757 11,729 Variable lease costs (3) 7,913 3,920 16,340 7,480 Sublease income (4) (1,136) (2,119) (2,318) (4,694) Total lease costs—net $ 49,770 $ 38,055 $ 97,650 $ 75,135 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on our accounting policy. Refer to Note 3— Significant Accounting Policies in the 2020 Form 10-K. (2) Included in interest expense—net on the condensed consolidated statements of income. (3) Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $5.6 million and $2.2 for the three months ended July 31, 2021 and August 1, 2020, respectively, and $11.9 million and $4.2 million for the six months ended July 31, 2021 and August 1, 2020, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in any period. (4) Included in selling, general and administrative expenses on the condensed consolidated statements of income. Lease right-of-use assets and lease liabilities consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 553,834 $ 456,164 Finance leases (1)(2) Property and equipment—net 731,620 711,804 Total lease right-of-use assets $ 1,285,454 $ 1,167,968 Liabilities Current (3) Operating leases Operating lease liabilities $ 74,074 $ 71,524 Finance leases Other current liabilities 14,231 14,671 Total lease liabilities—current 88,305 86,195 Non-current Operating leases Non-current operating lease liabilities 542,510 448,169 Finance leases Non-current finance lease liabilities 523,797 485,481 Total lease liabilities—non-current 1,066,307 933,650 Total lease liabilities $ 1,154,612 $ 1,019,845 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $152.3 million and $133.0 million as of July 31, 2021 and January 30, 2021, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. The maturities of lease liabilities are as follows as of July 31, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL Remainder of fiscal 2021 $ 48,990 $ 19,982 $ 68,972 2022 93,163 40,356 133,519 2023 84,601 40,770 125,371 2024 78,145 41,162 119,307 2025 77,631 42,377 120,008 2026 74,864 43,156 118,020 Thereafter 292,992 673,365 966,357 Total lease payments (1)(2) 750,386 901,168 1,651,554 Less—imputed interest (3) (133,802) (363,140) (496,942) Present value of lease liabilities $ 616,584 $ 538,028 $ 1,154,612 (1) Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $656.8 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of July 31, 2021, of which $12.3 million, $32.6 million, $37.8 million, $39.3 million, $40.2 million and $38.9 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $455.7 million will be paid subsequent to fiscal 2026. (2) Excludes future commitments under short-term lease agreements of $1.2 million as of July 31, 2021. (3) Calculated using the discount rate for each lease at lease commencement. Supplemental information related to leases consists of the following: SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 Weighted-average remaining lease term (years) Operating leases 9.4 9.0 Finance leases 20.0 18.8 Weighted-average discount rate Operating leases 3.98% 3.91% Finance leases 5.04% 5.04% Other information related to leases consists of the following (in thousands) SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (50,914) $ (26,413) Operating cash flows from finance leases (12,943) (6,767) Financing cash flows from finance leases (7,108) (4,641) Total cash outflows from leases $ (70,965) $ (37,821) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 134,763 $ 27,880 Finance leases 44,432 57,286 Build-to-Suit Asset During the second quarter of fiscal 2021, we opened the Dallas Design Gallery. During the construction period of this Design Gallery, we were the “deemed owner” for accounting purposes and classified the construction costs as build-to-suit asset within property & equipment—net on our condensed consolidated balance sheets. Upon construction completion and lease commencement, we performed a sale-leaseback analysis and determined that we cannot derecognize the build-to-suit asset. Therefore, the asset will remain classified as a build-to-suit asset within property and equipment—net and will depreciate over the term of the useful life of the asset. Sale-Leaseback Transaction During the second quarter of fiscal 2020, we executed a sale-leaseback transaction for the Minneapolis Design Gallery for sales proceeds of $25.5 million, which qualified for sale-leaseback accounting in accordance with ASC 842. Concurrently with the sale, we entered into an operating leaseback arrangement with an initial lease term of 20 years and a renewal option for an additional 10 years. We recognized a loss related to the execution of the sale transaction of $9.4 million in the second quarter of fiscal 2020, which was recorded in selling, general and administrative expenses Long-lived Asset Impairment During the first quarter of fiscal 2020, we recognized long-lived asset impairment charges of $3.5 million related to one RH Baby & Child and TEEN Gallery and one Waterworks showroom, comprised of lease right-of-use asset impairment of $2.0 million and property and equipment impairment of $1.5 million. |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure | |
Convertible Senior Notes | NOTE 9—CONVERTIBLE SENIOR NOTES $350 million 0.00% Convertible Senior Notes due 2024 In September 2019 The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2024 Notes, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2024 Notes in connection with such make-whole fundamental change. Prior to June 15, 2024, the 2024 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after December 31, 2019, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2024 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied from the calendar quarter ended September 30, 2020 through the calendar quarter ended June 30, 2021 and, accordingly, holders were eligible to convert their 2024 Notes beginning in the calendar quarter ended December 31, 2020 and are currently eligible to convert their 2024 Notes during the calendar quarter ending September 30, 2021. On and after June 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2024 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2024 Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. If the Company has not delivered a notice of its election of settlement method prior to the final conversion period it will be deemed to have elected combination settlement with a dollar amount per note to be received upon conversion of $1,000. We may not redeem the 2024 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require us to purchase all or a portion of their 2024 Notes for cash at a price equal to 100% of the principal amount of the 2024 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2024 Notes, we separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2024 Notes and the fair value of the liability component of the 2024 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 5.74% over the expected life of the 2024 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2024 Notes were comprised of discounts upon original issuance of $3.5 million and third party offering costs of $1.3 million. In accounting for the debt issuance costs related to the issuance of the 2024 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2024 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2024 During the second quarter of fiscal 2021, holders of $67.0 million in aggregate principal amount of the 2024 Notes elected to exercise the early conversion option and we elected to settle such conversions using combination settlement comprised of cash equal to the principal amount of the 2024 Notes converted and shares of our common stock for the remaining conversion value. In accordance with the provisions for such combination settlements, the conversion value is to be determined based on the average conversion value over a 45 current liabilities mezzanine equity non-current obligation The carrying value of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, is as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (57,563) (65,818) Net carrying amount (1) $ 292,437 $ 284,182 Equity component (2) $ 87,252 $ 87,252 (1) Includes $67.0 million classified within total current liabilities on the condensed consolidated balance sheets as of July 31, 2021 for the early conversion of $67.0 million in principal amount of 2024 Notes to be settled in the third quarter of fiscal 2021. (2) Includes $11.0 million in mezzanine equity and the remaining amount in additional paid-in capital on the condensed consolidated balance sheets as of July 31, 2021. As of January 30, 2021, the full amount is included in additional paid-in capital on the condensed consolidated balance sheets. We recorded interest expense of $4.2 million and $3.9 million for the amortization of the debt discount related to the 2024 Notes during the three months ended July 31, 2021 and August 1, 2020, respectively. We recorded interest expense of $8.3 million and $7.8 million for the amortization of the debt discount related to the 2024 Notes during the six months ended July 31, 2021 and August 1, 2020, respectively. 2024 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2024 Notes and exercise of the overallotment option in September 2019 additional paid-in capital We recorded a deferred tax liability of $21.7 million in connection with the debt discount associated with the 2024 Notes and recorded a deferred tax asset of $22.7 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets $335 million 0.00% Convertible Senior Notes due 2023 In June 2018 The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2023 Notes, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2023 Notes in connection with such make-whole fundamental change. Prior to March 15, 2023, the 2023 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2023 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied from the calendar quarter ended September 30, 2020 through the calendar quarter ended June 30, 2021 and, accordingly, holders were eligible to convert their 2023 Notes beginning in the calendar quarter ended December 31, 2020 and are currently eligible to convert their 2023 Notes during the calendar quarter ending September 30, 2021. On and after March 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2023 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2023 Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. If the Company has not delivered a notice of its election of settlement method prior to the final conversion period it will be deemed to have elected combination settlement with a dollar amount per note to be received upon conversion of $1,000. We may not redeem the 2023 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require us to purchase all or a portion of their 2023 Notes for cash at a price equal to 100% of the principal amount of the 2023 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2023 Notes, we separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2023 Notes and the fair value of the liability component of the 2023 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 6.35% over the expected life of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2023 Notes were comprised of discounts upon original issuance of $1.7 million and third party offering costs of $4.6 million. In accounting for the debt issuance costs related to the issuance of the 2023 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2023 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2023 In December 2020, holders of $2.4 million in aggregate principal amount of the 2023 Notes elected early conversion at the option of the noteholders. During the three months ended May 1, 2021, we paid $2.4 million in cash and delivered 7,307 shares of common stock to settle the early conversion of these 2023 Notes. As a result, we recognized a loss on extinguishment of the liability component of $0.1 million in the three months ended May 1, 2021. We also received 7,305 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below, and therefore, on a net basis issued 2 shares of our common stock in respect to such settlement of the converted 2023 Notes. During the second quarter of fiscal 2021, holders of $30.8 million in aggregate principal amount of the 2023 Notes elected to exercise the early conversion option and we elected to settle such conversions using combination settlement comprised of cash equal to the principal amount of the 2023 Notes converted and shares of our common stock for the remaining conversion value. During the three months ended July 31, 2021, we paid $30.8 million in cash and delivered 112,297 shares of common stock to settle the early conversion of these 2023 Notes. As a result, we recognized a loss on extinguishment of $3.2 million in the three months ended July 31, 2021. We also received 112,296 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below, and therefore, on a net basis issued 1 share of our common stock in respect to such settlement of the converted 2023 Notes. During the second quarter of fiscal 2021, holders of $173.5 million in aggregate principal amount of the 2023 Notes elected to exercise the conversion option and we elected to settle such conversions using combination settlement comprised of cash equal to the principal amount of the 2023 Notes converted and shares of our common stock for the remaining conversion value. In accordance with the provisions for such combination settlements, the conversion value is to be determined based on the average conversion value over a 45 mezzanine equity non-current obligation The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 Liability component Principal $ 301,819 $ 335,000 Less: Debt discount (33,914) (47,064) Net carrying amount (1) $ 267,905 $ 287,936 Equity component (2) $ 90,099 $ 90,990 (1) Includes $173.5 million classified within total current liabilities on the condensed consolidated balance sheets as of July 31, 2021 for the early conversion of $173.5 million in principal amount of 2023 Notes to be settled in the third quarter of fiscal 2021. (2) Includes $19.5 million in mezzanine equity and the remaining amount in additional paid-in capital on the condensed consolidated balance sheets as of July 31, 2021. As of January 30, 2021, the full amount is included in additional paid-in capital on the condensed consolidated balance sheets. We recorded interest expense of $4.6 million and $4.4 million for the amortization of the debt discount related to the 2023 Notes during the three months ended July 31, 2021 and August 1, 2020, respectively. We recorded interest expense of $9.2 million and $8.7 million for the amortization of the debt discount related to the 2023 Notes during the six months ended July 31, 2021 and August 1, 2020, respectively. 2023 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2023 Notes and exercise of the overallotment option in June 2018 additional paid-in capital We recorded a deferred tax liability of $22.3 million in connection with the debt discount associated with the 2023 Notes and recorded a deferred tax asset of $22.5 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets |
Credit Facilities
Credit Facilities | 6 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure | |
Credit Facilities | NOTE 10—CREDIT FACILITIES The outstanding balances under our credit facilities were as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 26,288 (101) 26,187 37,532 (171) 37,361 Total credit facilities $ 26,288 $ (101) $ 26,187 $ 37,532 $ (171) $ 37,361 (1) Deferred financing fees associated with the asset based credit facility as of July 31, 2021 and January 30, 2021 were $4.2 million and $1.5 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets. The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit. In July 2021, Restoration Hardware, Inc. entered into a twelfth amended and restated credit agreement which extended the maturity date of the revolving line of credit from June 28, 2022 to July 29, 2026. (2) Represents total equipment security notes secured by certain of our property and equipment, of which $24.1 million outstanding was included in other current liabilities on the condensed consolidated balance sheets. The remaining $2.2 million outstanding, included in equipment promissory notes—net on the condensed consolidated balance sheets, has principal payments due of $1.0 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. Asset Based Credit Facility In August 2011 On June 28, 2017, Restoration Hardware, Inc. entered into the eleventh amended and restated credit agreement (as amended prior to July 29, 2021, the “Credit Agreement”) among Restoration Hardware, Inc., Restoration Hardware Canada, Inc., certain subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and First Lien Administrative Agent, which amended and restated the Original Credit Agreement. On July 29, 2021, Restoration Hardware, Inc. entered into the twelfth amended and restated credit agreement (as amended, the “Amended Credit Agreement”) among Restoration Hardware, Inc., Restoration Hardware Canada, Inc., certain subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and First Lien Administrative Agent, which amended and restated the Credit Agreement. The Amended Credit Agreement has a revolving line of credit with initial availability of up to $600.0 million, of which $10.0 million is available to Restoration Hardware Canada, Inc., and includes a $300.0 million accordion feature under which the revolving line of credit may be expanded by agreement of the parties from $600.0 million to up to $900.0 million if and to the extent the lenders revise their credit commitments to encompass a larger facility. The Amended Credit Agreement provides that the $300.0 million accordion, or a portion thereof, may be added as a first-in, last-out term loan facility if and to the extent the lenders revise their credit commitments for such facility. The Amended Credit Agreement further provides the borrowers may request a European sub-credit facility under the revolving line of credit or under the accordion feature for borrowing by certain European subsidiaries of RH if certain conditions set out in the Amended Credit Agreement are met. The maturity date of the Amended Credit Agreement is July 29, 2026. The availability of credit at any given time under the Amended Credit Agreement will be constrained by the terms and conditions of the Amended Credit Agreement, including the amount of collateral available, a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable, and other restrictions contained in the Amended Credit Agreement. All obligations under the Amended Credit Agreement are secured by substantial assets of the loan parties, including inventory, receivables and certain types of intellectual property. Borrowings under the revolving line of credit (other than swing line loans, which are subject to interest at the base rate) are subject to interest, at the borrower’s option, at either the base rate or London Inter-bank Offered Rate (“LIBOR”) (or, in the case of the Canadian borrowings, the “BA Rate” or the “Canadian Prime Rate”, as such terms are defined in the Amended Credit Agreement, for the Canadian borrowings denominated in Canadian dollars, or the “U.S. Index Rate”, as such term is defined in the Amended Credit Agreement, or LIBOR for Canadian borrowings denominated in United States dollars) plus an applicable margin rate, in each case. The Amended Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on the ability to grant liens, make loans or other investments, incur additional debt, issue additional equity, merge or consolidate with or into another person, sell assets, pay dividends or make other distributions or enter into transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of this type and size. The Amended Credit Agreement does not contain any significant financial ratio covenants or coverage ratio covenants other than a consolidated fixed charge coverage ratio (“FCCR”) covenant based on the ratio of (i) consolidated EBITDA to the amount of (ii) debt service costs plus certain other amounts, including dividends and distributions and prepayments of debt as defined in the Amended Credit Agreement (the “FCCR Covenant”). The FCCR Covenant only applies in certain limited circumstances, including when the unused availability under the Amended Credit Agreement drops below the greater of (A) $40.0 million and (B) an amount based on 10% of the total borrowing availability at the time. The FCCR Covenant ratio is set at 1.0 and measured on a trailing twelve-month basis. As of July 31, 2021, Restoration Hardware, Inc. was in compliance with the FCCR Covenant. The Amended Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) when the unused availability under the Amended Credit Agreement drops below the greater of (A) $40.0 million and (B) an amount based on 10% of the total borrowing availability at the time. The Amended Credit Agreement includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, terminate any existing commitments under the Amended Credit Agreement and declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the Amended Credit Agreement to be immediately due and payable. As of July 31, 2021, we had no outstanding borrowings under the revolving credit facility portion of the Amended Credit Agreement. The availability of the revolving line of credit at any given time under the Amended Credit Agreement is limited by the terms and conditions of the Amended Credit Agreement, including the amount of collateral available, a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable, and other restrictions contained in the Amended Credit Agreement. As a result, actual borrowing availability under the revolving line of credit could be less than the stated amount of the revolving line of credit (as reduced by the actual borrowings and outstanding letters of credit under the revolving line of credit). As of July 31, 2021, the amount available for borrowing under the revolving line of credit under the Amended Credit Agreement was $389.1 million, net of $20.1 million in outstanding letters of credit. Equipment Loan Facility On September 5, 2017, Restoration Hardware, Inc. entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC (“BAL”) pursuant to which BAL and we agreed that BAL would finance certain equipment of ours from time to time, with each such equipment financing to be evidenced by an equipment security note setting forth the terms for each particular equipment loan. Each equipment loan is secured by a purchase money security interest in the financed equipment. The maturity dates of the equipment security notes vary, but generally have a maturity of three |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 31, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 11—FAIR VALUE MEASUREMENTS Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining the fair value, we utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs of the valuation technique. The degree of judgment used in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. Financial instruments with readily available active quoted prices for which fair value can be measured generally will have a higher degree of pricing observability and a lesser degree of judgment used in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment used in measuring fair value. Our financial assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1—Quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Level 3—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs used in the determination of fair value require significant management judgment or estimation. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair Value Measurements—Recurring Amounts reported as cash and equivalents accounts receivables—net accounts payable and accrued expenses in thousands JULY 31, JANUARY 30, 2021 2021 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2023 $ 287,314 $ 267,905 $ 301,794 $ 287,936 Convertible senior notes due 2024 314,630 292,437 286,161 284,182 (1) Carrying value represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. The fair value of each of the 2023 Notes and 2024 Notes was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the trading price of our convertible notes, when available, our common stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2). Fair Value Measurements—Non-Recurring The fair value of the Waterworks reporting unit tradename was determined based on unobservable (Level 3) inputs and valuation techniques, as discussed in Note 4— Goodwill, Tradenames, Trademarks and Other Intangible Assets The fair value of the acquired goodwill and tradename associated with acquisitions by the RH Segment in fiscal 2020 were determined based on unobservable (Level 3) inputs and valuation techniques. The fair value of the real estate assets associated with our investment in the Aspen LLCs in fiscal 2020, as discussed in Note 5— Equity Method Investments |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 31, 2021 | |
Income Taxes | |
Income Taxes | NOTE 12—INCOME TAXES We recorded income tax expense of $3.0 million and $18.9 million in the three months ended July 31, 2021 and August 1, 2020, respectively. We recorded income tax expense of $44.7 million and $17.5 million in the six months ended July 31, 2021 and August 1, 2020, respectively. The effective tax rate was 1.3% and 16.1% for the three months ended July 31, 2021 and August 1, 2020, respectively. The effective tax rate was 11.1% and 15.5% for the six months ended July 31, 2021 and August 1, 2020, respectively. The decrease in our effective tax rate for both the three and six months ended July 31, 2021 as compared to the three and six months ended August 1, 2020 is primarily due to higher discrete tax benefits related to net excess tax windfalls from stock-based compensation in 2021 as compared to 2020. As of July 31, 2021, we had $8.9 million of unrecognized tax benefits, of which $8.1 million would reduce income tax expense and the effective tax rate, if recognized. The remaining unrecognized tax benefits would offset other deferred tax assets, if recognized. As of July 31, 2021, we had $6.2 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jul. 31, 2021 | |
Net Income Per Share | |
Net Income Per Share | NOTE 13—NET INCOME PER SHARE The weighted-average shares used for net income per share are as follows: THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Weighted-average shares—basic 21,166,638 19,386,115 21,084,941 19,314,479 Effect of dilutive stock-based awards 6,757,728 5,205,159 6,737,107 4,787,988 Effect of dilutive convertible senior notes (1) 4,054,732 1,973,431 3,772,507 1,281,263 Weighted-average shares—diluted 31,979,098 26,564,705 31,594,555 25,383,730 (1) The $300 million aggregate principal amount of convertible senior notes that were issued in June and July 2015 (the “2020 Notes”), the 2023 Notes and the 2024 Notes would have an impact on our dilutive share count beginning at stock prices at or above $118.13 per share, $193.65 per share and $211.40 per share, respectively. The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices at or above $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2020 Notes expired on January 7, 2021. While the share price for our common stock trades above the applicable conversion price of each series of notes or the applicable exercise price of each series of warrants for the notes, these instruments will have a dilutive effect with respect to our common stock to the extent that the price per share of our common stock continues to exceed the applicable conversion or exercise price of the notes and warrants. Refer to Note 9— Convertible Senior Notes. Dilutive options of 82,562 and 800,854 were excluded from the calculation of diluted net income per share for the three months ended July 31, 2021 and August 1, 2020, respectively, because their inclusion would have been anti-dilutive. Dilutive options of 68,918 and 521,717 were excluded from the calculation of diluted net income per share for the six months ended July 31, 2021 and August 1, 2020, respectively, because their inclusion would have been anti-dilutive. |
Share Repurchase Program
Share Repurchase Program | 6 Months Ended |
Jul. 31, 2021 | |
Share Repurchase Program. | |
Share Repurchase Program | NOTE 14—SHARE REPURCHASE PROGRAM In 2018, our Board of Directors authorized a share repurchase program. In fiscal 2018, we repurchased approximately 2.0 million shares of our common stock under this share repurchase program at an average price of $122.10 per share, for an aggregate repurchase amount of approximately $250.0 million. In fiscal 2019, we repurchased approximately 2.2 million shares of our common stock under this program at an average price of $115.36 per share, for an aggregate repurchase amount of approximately $250.0 million. We did not make any repurchases under this program during either the six months ended July 31, 2021 or August 1, 2020. The total current authorized size of the share repurchase program is up to $950 million (the “950 Million Repurchase Program”), of which $450.0 million remained available as of July 31, 2021 for future share investments. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 31, 2021 | |
Stock-Based Compensation. | |
Stock-Based Compensation | NOTE 15—STOCK-BASED COMPENSATION We recorded stock-based compensation expense of $10.1 million and $6.9 million during the three months ended July 31, 2021 and August 1, 2020, respectively, which is included in selling, general and administrative expenses Chairman and Chief Executive Officer Option Grant On October 18, 2020, our Board of Directors granted Mr. Friedman an option to purchase 700,000 shares of our common stock with an exercise price equal to $385.30 per share under the 2012 Stock Incentive Plan. See Note 18— Stock-Based Compensation The option contains selling restrictions on the underlying shares that lapse upon the achievement of both time-based service requirements and stock price performance-based metrics as described further below. The option is fully vested on the date of grant but the shares underlying the option remain subject to transfer restrictions to the extent the performance-based and time-based requirements have not been met. The option will result in aggregate non-cash stock compensation expense of $173.6 million, of which $5.8 million and $11.7 million was recognized during the three and six months ended July 31, 2021, respectively (which is included in the stock-based compensation expense recorded during the three and six months ended July 31, 2021 noted above). As of July 31, 2021, the total unrecognized compensation expense was $44.8 million, which will be recognized on an accelerated basis through May 2025. 2012 Stock Incentive Plan and 2012 Stock Option Plan As of July 31, 2021, 7,895,050 options were outstanding with a weighted-average exercise price of $107.35 per share and 7,555,774 options were vested with a weighted-average exercise price of $102.88 per share. The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of July 31, 2021 was $4,395.8 million, $4,240.6 million, and $3,794.8 million, respectively. Stock options exercisable as of July 31, 2021 had a weighted-average remaining contractual life of 3.38 years. As of July 31, 2021, the total unrecognized compensation expense related to unvested options was $97.7 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 5.04 years. In addition, as of July 31, 2021, the total unrecognized compensation expense related to the fully vested option grant made to Mr. Friedman in October 2020 was $44.8 million, which will be recognized on an accelerated basis through May 2025 (refer to Chairman and Chief Executive Officer Option Grant As of July 31, 2021, we had 23,690 restricted stock units outstanding with a weighted-average grant date fair value of $157.52 per share. During the three months ended July 31, 2021, 61,340 restricted stock units vested with a weighted-average grant date fair value of $42.47 per share. During the six months ended July 31, 2021, 65,760 restricted stock units vested with a weighted-average grant date fair value of $43.06 per share. As of July 31, 2021, there was $2.9 million of total unrecognized compensation expense related to unvested restricted stock and restricted stock units, which is expected to be recognized over a weighted-average period of 1.76 years. Rollover Units In connection with the acquisition of Waterworks in May 2016, $1.5 million rollover units in the Waterworks subsidiary (the “Rollover Units”) were recorded as part of the transaction. The Rollover Units are subject to the terms of the Waterworks LLC agreement, including redemption rights at an amount equal to the greater of (i) the $1.5 million remitted as consideration in the business combination or (ii) an amount based on the percentage interest represented in the overall valuation of the Waterworks subsidiary (the “Appreciation Rights”). The Appreciation Rights are measured at fair value and are subject to fair value measurements during the expected life of the Rollover Units, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Appreciation Rights is determined based on an option-pricing model (“OPM”). We did not record any expense related to the Appreciation Rights during both the three and six months ended July 31, 2021 and August 1, 2020. As of both July 31, 2021 and January 30, 2021, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations Profit Interests In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the condensed consolidated statements of income. The fair value of the Profit Interests is determined based on an OPM. During the six months ended July 31, 2021 and August 1, 2020, we recorded $0.1 million and $0.2 million related to the Profit Interests, respectively, which is included in selling, general and administrative expenses other non-current obligations |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 31, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 16—COMMITMENTS AND CONTINGENCIES Commitments We had no material off balance sheet commitments as of July 31, 2021. Contingencies We are involved in lawsuits, claims, investigations and other legal proceedings incident to the ordinary course of our business. These disputes are increasing in number as the business expands and we grow larger. Litigation is inherently unpredictable. As a result, the outcome of matters in which we are involved could result in unexpected expenses and liability that could adversely affect our operations. In addition, any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of our senior leadership team’s time and result in the diversion of significant operational resources. We review the need for any loss contingency reserves and establish reserves when, in the opinion of our senior leadership team, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that we do establish a reserve, there can be no assurance that any such recorded liability for estimated losses will be for the appropriate amount, and actual losses could be higher or lower than what we accrue from time to time. Although we believe that the ultimate resolution of our current legal proceedings will not have a material adverse effect on our condensed consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 31, 2021 | |
Segment Reporting | |
Segment Reporting | NOTE 17—SEGMENT REPORTING We define reportable and operating segments on the same basis that we use to evaluate our performance internally by the Chief Operating Decision Maker (the “CODM”), which we have determined is our Chief Executive Officer. We have three operating segments: RH Segment, Waterworks and Real Estate Development. The RH Segment and Waterworks operating segments (the “retail operating segments”) include all sales channels accessed by our customers, including sales through retail locations and outlets, websites, Source Books, and the commercial channel. The Real Estate Development segment represents operations associated with our equity method investments entered into in fiscal 2020, as described in Note 5— Equity Method Investments The retail operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared senior leadership team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. We use operating income to evaluate segment profitability for the retail operating segments. Operating income is defined as net income before interest expense—net, tradename impairment, (gain) loss on extinguishment of debt, income tax expense and our share of equity method investments losses. Segment Information The following table presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting in thousands THREE MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 947,618 $ 41,241 $ 988,859 $ 681,387 $ 27,895 $ 709,282 Gross profit 467,067 20,609 487,676 320,481 11,938 332,419 Depreciation and amortization 21,484 1,186 22,670 24,234 1,108 25,342 SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 1,767,441 $ 82,210 $ 1,849,651 $ 1,136,344 $ 55,833 $ 1,192,177 Gross profit 853,620 41,033 894,653 508,243 23,830 532,073 Depreciation and amortization 44,164 2,392 46,556 47,951 2,261 50,212 The Real Estate Development segment share of equity method investments losses were $2.5 million and $4.6 million during the three and six months ended July 31, 2021, respectively. The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting in thousands JULY 31, JANUARY 30, 2021 2021 REAL ESTATE REAL ESTATE RH SEGMENT WATERWORKS DEVELOPMENT TOTAL RH SEGMENT WATERWORKS DEVELOPMENT TOTAL Goodwill (1) $ 141,132 $ — $ — $ 141,132 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 55,584 17,000 — 72,584 54,663 17,000 — 71,663 Equity method investments — — 97,412 97,412 — — 100,603 100,603 Total assets 3,215,534 154,206 97,412 3,467,152 2,659,944 137,766 100,603 2,898,313 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) The Waterworks reporting unit tradename is presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. We use segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) a non-cash compensation charge related to a fully vested option grant made to Mr. Friedman in October 2020, (ii) asset impairments and lease losses, (iii) product recall accruals, (iv) severance costs associated with reorganizations and (v) loss on sale leaseback transaction. These items are excluded from segment operating income in order to provide better transparency of segment operating results. Accordingly, these items are not presented by segment because they are excluded from the segment profitability measure that the CODM and our senior leadership team review. The following table presents segment operating income and income before income taxes ( in thousands THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Operating income: RH Segment $ 257,242 $ 153,350 $ 445,252 $ 202,867 Waterworks 5,413 1,573 11,655 123 Non-cash compensation (5,864) — (11,728) — Asset impairments and lease losses (7,354) (1,339) (7,354) (9,810) Recall accrual — (4,780) (500) (4,780) Reorganization related costs (449) (2,884) (449) (7,027) Loss on sale leaseback transaction — (9,352) — (9,352) Income from operations 248,988 136,568 436,876 172,021 Interest expense—net 13,581 19,418 26,889 39,047 (Gain) loss on extinguishment of debt 3,166 (152) 3,271 (152) Tradename impairment — — — 20,459 Income before income taxes $ 232,241 $ 117,302 $ 406,716 $ 112,667 We classify our sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor. Net revenues in each category were as follows ( in thousands THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Furniture $ 699,729 $ 483,205 $ 1,279,740 $ 795,728 Non-furniture 289,130 226,077 569,911 396,449 Total net revenues $ 988,859 $ 709,282 $ 1,849,651 $ 1,192,177 During the third fiscal quarter of 2020, we reviewed our segments and product lines and updated certain products and categories in our reporting of furniture and non-furniture product lines. While this reporting change did not impact our consolidated results, prior period segment data has been recast for consistency in reporting. We are domiciled in the United States and primarily operate our retail and outlet locations in the United States. As of July 31, 2021, we operated 4 retail and 2 outlet stores in Canada and 1 retail store in the U.K. Geographical revenues in Canada and the U.K. are based upon revenues recognized at the retail locations in the respective country and were not material in any fiscal period presented. Long-lived assets held internationally were not material in any fiscal period presented. No single customer accounted for more than 10% of our revenues in the three or six months ended July 31, 2021 and August 1, 2020. |
The Company (Policies)
The Company (Policies) | 6 Months Ended |
Jul. 31, 2021 | |
The Company | |
Nature of Business | Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” or the “Company”), is a leading luxury retailer in the home furnishings market that offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of July 31, 2021, we operated a total of 66 RH Galleries and 38 RH outlet stores in 30 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from our records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of July 31, 2021, and the results of operations for the three and six months ended July 31, 2021 and August 1, 2020. Our current fiscal year, which consists of 52 weeks, ends on January 29, 2022 (“fiscal 2021”). Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The preparation of our condensed consolidated financial statements in conformity with GAAP requires our senior leadership team to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the condensed consolidated financial statements. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the novel coronavirus disease (“COVID-19” or “the pandemic”) using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, intangible and other long-lived assets. Our current assessment of these estimates is included in our condensed consolidated financial statements as of and for the three and six months ended July 31, 2021. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our condensed consolidated financial statements in future reporting periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 (the “2020 Form 10-K”). The results of operations for the three and six months ended July 31, 2021 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Our business, like the businesses of retailers generally, is subject to uncertainty surrounding the financial impact of the pandemic as discussed in Recent Developments—COVID-19 |
Recently Issued Accounting Standards | New Accounting Standards or Updates Adopted Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes New Accounting Standards or Updates Not Yet Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Prepaid Expense and Other Ass_2
Prepaid Expense and Other Assets (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Prepaid expense and other current assets $ 53,970 $ 42,079 Vendor deposits 27,796 12,519 Capitalized catalog costs 17,606 19,067 Federal and state tax receivable 15,863 — Promissory notes receivable, including interest (1) 14,083 13,569 Right of return asset for merchandise 6,502 7,453 Acquisition related escrow deposits 4,750 2,650 Total prepaid expense and other current assets $ 140,570 $ 97,337 (1) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Equity Method Investments . |
Schedule of Other Non-Current Assets | Other non-current assets consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Landlord assets under construction—net of tenant allowances $ 201,375 $ 135,531 Initial direct costs prior to lease commencement 46,531 36,770 Capitalized cloud computing costs—net (1) 10,300 7,254 Other deposits 7,534 5,287 Deferred financing fees 4,235 1,525 Acquisition related escrow deposits 1,030 3,975 Other non-current assets 11,821 9,835 Total other non-current assets $ 282,826 $ 200,177 (1) Presented net of accumulated amortization of $1.9 million and $0.5 million as of July 31, 2021 and January 30, 2021, respectively. |
Goodwill, Tradenames, Tradema_2
Goodwill, Tradenames, Trademarks and Other Intangible Assets (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | The following sets forth the goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks (See Note 17— Segment Reporting in thousands FOREIGN JANUARY 30, CURRENCY JULY 31, 2021 ADDITIONS TRANSLATION 2021 RH Segment Goodwill $ 141,100 $ — $ 32 $ 141,132 Tradenames, trademarks and other intangible assets 54,663 921 — 55,584 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Accounts payable $ 238,607 $ 224,906 Accrued compensation 71,748 84,860 Accrued freight and duty 30,685 29,754 Accrued sales taxes 27,158 23,706 Accrued occupancy 26,680 17,671 Accrued professional fees 9,135 5,383 Accrued catalog costs 3,979 4,354 Deferred consideration for asset purchase — 14,387 Other accrued expenses 18,793 19,401 Total accounts payable and accrued expenses $ 426,785 $ 424,422 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Current portion of equipment promissory notes $ 24,072 $ 22,747 Allowance for sales returns 23,574 25,559 Unredeemed gift card and merchandise credit liability 20,322 19,173 Finance lease liabilities 14,231 14,671 Product recall reserve 5,780 8,181 Federal and state tax payable — 49,539 Other current liabilities 4,357 2,821 Total other current liabilities $ 92,336 $ 142,691 |
Other Non-Current Obligations (
Other Non-Current Obligations (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Other Non-Current Obligations. | |
Schedule of Other Non-Current Obligations | Other non-current obligations consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Deferred payroll taxes $ 4,461 $ 4,461 Rollover units and profit interests (1) 3,632 3,490 Unrecognized tax benefits 3,346 3,114 Other non-current obligations 4,019 5,916 Total other non-current obligations $ 15,458 $ 16,981 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 15 — Stock-Based Compensation . |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Leases | |
Summary of Lease Costs-Net | Lease costs—net consist of the following ( in thousands THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Operating lease cost (1) $ 25,590 $ 20,181 $ 49,157 $ 40,907 Finance lease costs Amortization of leased assets (1) 10,796 10,125 21,714 19,713 Interest on lease liabilities (2) 6,607 5,948 12,757 11,729 Variable lease costs (3) 7,913 3,920 16,340 7,480 Sublease income (4) (1,136) (2,119) (2,318) (4,694) Total lease costs—net $ 49,770 $ 38,055 $ 97,650 $ 75,135 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on our accounting policy. Refer to Note 3— Significant Accounting Policies in the 2020 Form 10-K. (2) Included in interest expense—net on the condensed consolidated statements of income. (3) Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $5.6 million and $2.2 for the three months ended July 31, 2021 and August 1, 2020, respectively, and $11.9 million and $4.2 million for the six months ended July 31, 2021 and August 1, 2020, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in any period. (4) Included in selling, general and administrative expenses on the condensed consolidated statements of income. |
Summary of Lease Right-of-use Assets and Lease Liabilities | Lease right-of-use assets and lease liabilities consist of the following ( in thousands JULY 31, JANUARY 30, 2021 2021 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 553,834 $ 456,164 Finance leases (1)(2) Property and equipment—net 731,620 711,804 Total lease right-of-use assets $ 1,285,454 $ 1,167,968 Liabilities Current (3) Operating leases Operating lease liabilities $ 74,074 $ 71,524 Finance leases Other current liabilities 14,231 14,671 Total lease liabilities—current 88,305 86,195 Non-current Operating leases Non-current operating lease liabilities 542,510 448,169 Finance leases Non-current finance lease liabilities 523,797 485,481 Total lease liabilities—non-current 1,066,307 933,650 Total lease liabilities $ 1,154,612 $ 1,019,845 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $152.3 million and $133.0 million as of July 31, 2021 and January 30, 2021, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. |
Summary of Maturities of Lease Liabilities | The maturities of lease liabilities are as follows as of July 31, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL Remainder of fiscal 2021 $ 48,990 $ 19,982 $ 68,972 2022 93,163 40,356 133,519 2023 84,601 40,770 125,371 2024 78,145 41,162 119,307 2025 77,631 42,377 120,008 2026 74,864 43,156 118,020 Thereafter 292,992 673,365 966,357 Total lease payments (1)(2) 750,386 901,168 1,651,554 Less—imputed interest (3) (133,802) (363,140) (496,942) Present value of lease liabilities $ 616,584 $ 538,028 $ 1,154,612 (1) Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $656.8 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of July 31, 2021, of which $12.3 million, $32.6 million, $37.8 million, $39.3 million, $40.2 million and $38.9 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $455.7 million will be paid subsequent to fiscal 2026. (2) Excludes future commitments under short-term lease agreements of $1.2 million as of July 31, 2021. (3) Calculated using the discount rate for each lease at lease commencement. |
Summary of Supplemental Information Related to Leases | Supplemental information related to leases consists of the following: SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 Weighted-average remaining lease term (years) Operating leases 9.4 9.0 Finance leases 20.0 18.8 Weighted-average discount rate Operating leases 3.98% 3.91% Finance leases 5.04% 5.04% |
Summary of Other Information Related to Leases | Other information related to leases consists of the following (in thousands) SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (50,914) $ (26,413) Operating cash flows from finance leases (12,943) (6,767) Financing cash flows from finance leases (7,108) (4,641) Total cash outflows from leases $ (70,965) $ (37,821) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 134,763 $ 27,880 Finance leases 44,432 57,286 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Convertible senior notes due 2024 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying value of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, is as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (57,563) (65,818) Net carrying amount (1) $ 292,437 $ 284,182 Equity component (2) $ 87,252 $ 87,252 (1) Includes $67.0 million classified within total current liabilities on the condensed consolidated balance sheets as of July 31, 2021 for the early conversion of $67.0 million in principal amount of 2024 Notes to be settled in the third quarter of fiscal 2021. (2) Includes $11.0 million in mezzanine equity and the remaining amount in additional paid-in capital on the condensed consolidated balance sheets as of July 31, 2021. As of January 30, 2021, the full amount is included in additional paid-in capital on the condensed consolidated balance sheets. |
Convertible senior notes due 2023 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 Liability component Principal $ 301,819 $ 335,000 Less: Debt discount (33,914) (47,064) Net carrying amount (1) $ 267,905 $ 287,936 Equity component (2) $ 90,099 $ 90,990 (1) Includes $173.5 million classified within total current liabilities on the condensed consolidated balance sheets as of July 31, 2021 for the early conversion of $173.5 million in principal amount of 2023 Notes to be settled in the third quarter of fiscal 2021. (2) Includes $19.5 million in mezzanine equity and the remaining amount in additional paid-in capital on the condensed consolidated balance sheets as of July 31, 2021. As of January 30, 2021, the full amount is included in additional paid-in capital on the condensed consolidated balance sheets. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Debt Disclosure | |
Schedule of Outstanding Balances Under our Credit Facilities | The outstanding balances under our credit facilities were as follows ( in thousands JULY 31, JANUARY 30, 2021 2021 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 26,288 (101) 26,187 37,532 (171) 37,361 Total credit facilities $ 26,288 $ (101) $ 26,187 $ 37,532 $ (171) $ 37,361 (1) Deferred financing fees associated with the asset based credit facility as of July 31, 2021 and January 30, 2021 were $4.2 million and $1.5 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets. The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit. In July 2021, Restoration Hardware, Inc. entered into a twelfth amended and restated credit agreement which extended the maturity date of the revolving line of credit from June 28, 2022 to July 29, 2026. (2) Represents total equipment security notes secured by certain of our property and equipment, of which $24.1 million outstanding was included in other current liabilities on the condensed consolidated balance sheets. The remaining $2.2 million outstanding, included in equipment promissory notes—net on the condensed consolidated balance sheets, has principal payments due of $1.0 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Fair Value Measurements | |
Estimated Fair Value and Carrying Value of Notes | JULY 31, JANUARY 30, 2021 2021 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2023 $ 287,314 $ 267,905 $ 301,794 $ 287,936 Convertible senior notes due 2024 314,630 292,437 286,161 284,182 (1) Carrying value represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Net Income Per Share | |
Schedule of weighted-average shares used for net income per share | THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Weighted-average shares—basic 21,166,638 19,386,115 21,084,941 19,314,479 Effect of dilutive stock-based awards 6,757,728 5,205,159 6,737,107 4,787,988 Effect of dilutive convertible senior notes (1) 4,054,732 1,973,431 3,772,507 1,281,263 Weighted-average shares—diluted 31,979,098 26,564,705 31,594,555 25,383,730 (1) The $300 million aggregate principal amount of convertible senior notes that were issued in June and July 2015 (the “2020 Notes”), the 2023 Notes and the 2024 Notes would have an impact on our dilutive share count beginning at stock prices at or above $118.13 per share, $193.65 per share and $211.40 per share, respectively. The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices at or above $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2020 Notes expired on January 7, 2021. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jul. 31, 2021 | |
Segment Reporting | |
Summary of Statements of Income Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting | The following table presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting in thousands THREE MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 947,618 $ 41,241 $ 988,859 $ 681,387 $ 27,895 $ 709,282 Gross profit 467,067 20,609 487,676 320,481 11,938 332,419 Depreciation and amortization 21,484 1,186 22,670 24,234 1,108 25,342 SIX MONTHS ENDED JULY 31, AUGUST 1, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 1,767,441 $ 82,210 $ 1,849,651 $ 1,136,344 $ 55,833 $ 1,192,177 Gross profit 853,620 41,033 894,653 508,243 23,830 532,073 Depreciation and amortization 44,164 2,392 46,556 47,951 2,261 50,212 |
Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting | The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting in thousands JULY 31, JANUARY 30, 2021 2021 REAL ESTATE REAL ESTATE RH SEGMENT WATERWORKS DEVELOPMENT TOTAL RH SEGMENT WATERWORKS DEVELOPMENT TOTAL Goodwill (1) $ 141,132 $ — $ — $ 141,132 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 55,584 17,000 — 72,584 54,663 17,000 — 71,663 Equity method investments — — 97,412 97,412 — — 100,603 100,603 Total assets 3,215,534 154,206 97,412 3,467,152 2,659,944 137,766 100,603 2,898,313 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) The Waterworks reporting unit tradename is presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. |
Schedule of Segment Operating Income and Income Before Income Taxes | The following table presents segment operating income and income before income taxes ( in thousands THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Operating income: RH Segment $ 257,242 $ 153,350 $ 445,252 $ 202,867 Waterworks 5,413 1,573 11,655 123 Non-cash compensation (5,864) — (11,728) — Asset impairments and lease losses (7,354) (1,339) (7,354) (9,810) Recall accrual — (4,780) (500) (4,780) Reorganization related costs (449) (2,884) (449) (7,027) Loss on sale leaseback transaction — (9,352) — (9,352) Income from operations 248,988 136,568 436,876 172,021 Interest expense—net 13,581 19,418 26,889 39,047 (Gain) loss on extinguishment of debt 3,166 (152) 3,271 (152) Tradename impairment — — — 20,459 Income before income taxes $ 232,241 $ 117,302 $ 406,716 $ 112,667 |
Net Revenues | THREE MONTHS ENDED SIX MONTHS ENDED JULY 31, AUGUST 1, JULY 31, AUGUST 1, 2021 2020 2021 2020 Furniture $ 699,729 $ 483,205 $ 1,279,740 $ 795,728 Non-furniture 289,130 226,077 569,911 396,449 Total net revenues $ 988,859 $ 709,282 $ 1,849,651 $ 1,192,177 |
The Company (Detail)
The Company (Detail) | Jul. 31, 2021itemstatestore |
The Company | |
Number of galleries | 66 |
Number of RH outlet stores | store | 38 |
Number of states that galleries and stores operate, District of Columbia and Canada | state | 30 |
Number of waterworks showrooms throughout the United States and in the U.K. | 14 |
Prepaid Expense and Other Ass_3
Prepaid Expense and Other Assets - Prepaid Expense and Other Current Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expense and other current assets | $ 53,970 | $ 42,079 |
Vendor deposits | 27,796 | 12,519 |
Capitalized catalog costs | 17,606 | 19,067 |
Federal and state tax receivable | 15,863 | |
Promissory note receivable, including interest | 14,083 | 13,569 |
Right of return asset for merchandise | 6,502 | 7,453 |
Acquisition related escrow deposits | 4,750 | 2,650 |
Total prepaid expense and other current assets | $ 140,570 | $ 97,337 |
Prepaid Expense and Other Ass_4
Prepaid Expense and Other Assets - Other Non-Current Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
May 01, 2021 | Jan. 30, 2021 | Jul. 31, 2021 | |
Other Assets Noncurrent [Abstract] | |||
Landlord assets under construction-net of tenant allowances | $ 135,531 | $ 201,375 | |
Initial direct costs prior to lease commencement | 36,770 | 46,531 | |
Capitalized cloud computing costs-net | 7,254 | 10,300 | |
Other deposits | 5,287 | 7,534 | |
Acquisition related escrow deposits | 3,975 | 1,030 | |
Deferred financing fees | 1,525 | 4,235 | |
Other non-current assets | 9,835 | 11,821 | |
Total other non-current assets | 200,177 | $ 282,826 | |
Accumulated amortization | $ 1,900 | $ 500 |
Goodwill, Tradenames, Tradema_3
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Goodwill, Tradenames, Trademarks and Domain Names Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Goodwill Activity | |||||||
Goodwill, Beginning balance | $ 141,100 | ||||||
Goodwill, Ending balance | 141,132 | $ 141,100 | |||||
Tradenames, trademarks and domain names Activity | |||||||
Indefinite-lived intangible assets,Beginning balance | 71,663 | ||||||
Tradenames, trademarks and other intangible assets | $ 20,459 | ||||||
Indefinite-lived intangible assets, Ending balance | 72,584 | 71,663 | |||||
RH Segment | |||||||
Goodwill Activity | |||||||
Goodwill, Beginning balance | 141,100 | ||||||
Goodwill, Foreign Currency Translation | 32 | ||||||
Goodwill, Ending balance | 141,132 | 141,100 | |||||
Tradenames, trademarks and domain names Activity | |||||||
Indefinite-lived intangible assets,Beginning balance | 54,663 | ||||||
Indefinite-lived intangible assets, Ending balance | 55,584 | 54,663 | |||||
RH Segment | Tradenames, trademarks and domain names | |||||||
Tradenames, trademarks and domain names Activity | |||||||
Indefinite-lived intangible assets,Beginning balance | 54,663 | ||||||
Indefinite-lived intangible assets, Acquisition | 921 | ||||||
Indefinite-lived intangible assets, Ending balance | 55,584 | 54,663 | |||||
Waterworks | |||||||
Goodwill Activity | |||||||
Goodwill impairment charge | $ 17,400 | $ 33,700 | $ 51,100 | ||||
Tradenames, trademarks and domain names Activity | |||||||
Indefinite-lived intangible assets,Beginning balance | 17,000 | ||||||
Tradenames, trademarks and other intangible assets | $ 20,500 | 35,100 | 20,500 | $ 14,600 | |||
Indefinite-lived intangible assets, Ending balance | 17,000 | 17,000 | |||||
Waterworks | Tradename | |||||||
Tradenames, trademarks and domain names Activity | |||||||
Indefinite-lived intangible assets,Beginning balance | 17,000 | ||||||
Indefinite-lived intangible assets, Ending balance | $ 17,000 | $ 17,000 |
Goodwill, Tradenames, Tradema_4
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Waterworks Tradename Impairment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
May 02, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment | COVID-19 health crisis and related Showroom closures and slowdown in construction activity | ||||
Impaired Intangible Asset, Description | We performed an interim impairment test on the Waterworks tradename and the estimated future cash flows of the Waterworks reporting unit indicated the fair value of the tradename asset was below its carrying amount. | ||||
Impaired Intangible Asset, Method for Fair Value Determination | We determined fair value utilizing a discounted cash flow methodology under the relief-from-royalty method. Significant assumptions under this method include forecasted net revenues and the estimated royalty rate, expressed as a percentage of revenues, in addition to the discount rate based on the weighted-average cost of capital. | ||||
Non-cash impairment charge | $ 20,459 | ||||
Waterworks | |||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | |||||
Non-cash impairment charge | $ 20,500 | $ 35,100 | $ 20,500 | $ 14,600 |
Equity Method Investments (Deta
Equity Method Investments (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jul. 31, 2021USD ($)item | Jul. 31, 2021USD ($)item | |
Related Party Transaction [Line Items] | ||
Share of equity method investments losses | $ 2,486 | $ 4,581 |
Aspen LLC's | ||
Related Party Transaction [Line Items] | ||
Joint venture, percentage of ownership | 50.00% | 50.00% |
Number of privately held limited companies | item | 3 | 3 |
Share of equity method investments losses | $ 2,500 | $ 4,600 |
Aspen LLC's | Prepaid expenses and other current assets | Promissory notes receivable | ||
Related Party Transaction [Line Items] | ||
Contributed capital membership interest | $ 14,100 | $ 14,100 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Accounts payable | $ 238,607 | $ 224,906 |
Accrued compensation | 71,748 | 84,860 |
Accrued freight and duty | 30,685 | 29,754 |
Accrued sales taxes | 27,158 | 23,706 |
Accrued occupancy | 26,680 | 17,671 |
Accrued professional fees | 9,135 | 5,383 |
Accrued catalog costs | 3,979 | 4,354 |
Deferred consideration for asset purchase | 14,387 | |
Other accrued expenses | 18,793 | 19,401 |
Total accounts payable and accrued expenses | $ 426,785 | $ 424,422 |
Accounts Payable, Accrued Exp_4
Accounts Payable, Accrued Expenses and Other Current Liabilities - Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Current portion of equipment promissory notes | $ 24,072 | $ 22,747 |
Allowance for sales returns | 23,574 | 25,559 |
Unredeemed gift card and merchandise credit liability | 20,322 | 19,173 |
Finance lease liabilities | 14,231 | 14,671 |
Product recall reserve | 5,780 | 8,181 |
Federal and state tax payable | 49,539 | |
Other current liabilities | 4,357 | 2,821 |
Total other current liabilities | $ 92,336 | $ 142,691 |
Accounts Payable, Accrued Exp_5
Accounts Payable, Accrued Expenses and Other Current Liabilities - Contract Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Contract Liabilities | ||||
Revenue recognized on membership period | 1 year | |||
Gift card breakage recorded | $ 0.5 | $ 0.2 | $ 0.9 | $ 0.8 |
Percentage of remaining revenue recognized on gift card | 75.00% | |||
Gift card and merchandise credits | ||||
Contract Liabilities | ||||
Revenue related to previous deferrals related to gift cards | $ 4.9 | $ 6.5 | $ 9.8 | $ 10.6 |
Other Non-Current Obligations_2
Other Non-Current Obligations (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Other Non-Current Obligations. | ||
Deferred payroll taxes | $ 4,461 | $ 4,461 |
Rollover units and profit interests | 3,632 | 3,490 |
Unrecognized tax benefits | 3,346 | 3,114 |
Other noncurrent obligations | 4,019 | 5,916 |
Total other non-current obligations | $ 15,458 | $ 16,981 |
Leases - Lease Costs-Net (Detai
Leases - Lease Costs-Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Lease costs-net: | ||||
Operating lease cost | $ 25,590 | $ 20,181 | $ 49,157 | $ 40,907 |
Finance lease costs | ||||
Amortization of leased assets | 10,796 | 10,125 | 21,714 | 19,713 |
Interest on lease liabilities | 6,607 | 5,948 | 12,757 | 11,729 |
Variable lease costs | 7,913 | 3,920 | 16,340 | 7,480 |
Sublease income | (1,136) | (2,119) | (2,318) | (4,694) |
Total lease cost-net | 49,770 | 38,055 | 97,650 | 75,135 |
Variable lease payments | $ 5,600 | $ 2,200 | $ 11,900 | $ 4,200 |
Leases - Lease Right-of-Use Ass
Leases - Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating leases | $ 553,834 | $ 456,164 |
Balance Sheet Classification, Operating lease right-of-use assets | Operating leases | Operating leases |
Finance leases | $ 731,620 | $ 711,804 |
Balance Sheet Classification, Property and equipment-net | Property and equipment-net | Property and equipment-net |
Total lease right-of-use assets | $ 1,285,454 | $ 1,167,968 |
Liabilities, Current | ||
Operating leases, current | $ 74,074 | $ 71,524 |
Balance Sheet Classification, Operating lease liabilities | Operating leases, current | Operating leases, current |
Finance leases, current | $ 14,231 | $ 14,671 |
Balance Sheet Classification, Other current liabilities | Other current liabilities | Other current liabilities |
Total lease liabilities-current | $ 88,305 | $ 86,195 |
Liabilities, Non-current | ||
Operating leases, noncurrent | $ 542,510 | $ 448,169 |
Balance Sheet Classification, Non-current operating lease liabilities | Operating leases, noncurrent | Operating leases, noncurrent |
Finance leases, noncurrent | $ 523,797 | $ 485,481 |
Balance Sheet Classification, Non-current finance lease liabilities | Finance leases, noncurrent | Finance leases, noncurrent |
Total lease liabilities-non-current | $ 1,066,307 | $ 933,650 |
Total lease liabilities | 1,154,612 | 1,019,845 |
Finance lease right-of-use assets, accumulated amortization | $ 152,300 | $ 133,000 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 31, 2021 | Jan. 30, 2021 | |
Leases | ||
2021 | $ 12,300 | |
2022 | 32,600 | |
2023 | 37,800 | |
2024 | 39,300 | |
2025 | 40,200 | |
2026 | 38,900 | |
Thereafter | 455,700 | |
Maturities of lease liabilities, Operating Leases | ||
Remainder of fiscal 2021 | 48,990 | |
2022 | 93,163 | |
2023 | 84,601 | |
2024 | 78,145 | |
2025 | 77,631 | |
2026 | 74,864 | |
Thereafter | 292,992 | |
Total lease payments | 750,386 | |
Less-imputed interest | (133,802) | |
Present value of lease liabilities | 616,584 | |
Maturities of lease liabilities, Finance Leases | ||
Remainder of fiscal 2021 | 19,982 | |
2022 | 40,356 | |
2023 | 40,770 | |
2024 | 41,162 | |
2025 | 42,377 | |
2026 | 43,156 | |
Thereafter | 673,365 | |
Total lease payments | 901,168 | |
Less-imputed interest | (363,140) | |
Present value of lease liabilities | 538,028 | |
Total maturities of lease liabilities | ||
Remainder of fiscal 2021 | 68,972 | |
2022 | 133,519 | |
2023 | 125,371 | |
2024 | 119,307 | |
2025 | 120,008 | |
2026 | 118,020 | |
Thereafter | 966,357 | |
Total lease payments | 1,651,554 | |
Less-imputed interest | (496,942) | |
Present value of lease liabilities | 1,154,612 | $ 1,019,845 |
Legally binding payments for leases signed but not yet commenced | 656,800 | |
Future commitments under short-term lease agreements | $ 1,200 | |
Short-term lease agreements, commitments | true |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Detail) | Jul. 31, 2021 | Aug. 01, 2020 |
Weighted-average remaining lease term (years) | ||
Operating leases, years | 9 years 4 months 24 days | 9 years |
Finance leases, years | 20 years | 18 years 9 months 18 days |
Weighted-average discount rate | ||
Operating leases, percent | 3.98% | 3.91% |
Finance leases, percent | 5.04% | 5.04% |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 31, 2021 | Aug. 01, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ (50,914) | $ (26,413) |
Operating cash flows from finance leases | (12,943) | (6,767) |
Financing cash flows from finance leases | (7,108) | (4,641) |
Total cash outflows from leases | (70,965) | (37,821) |
Lease right-of-use assets obtained in exchange for lease obligations-net of lease terminations (non-cash) | ||
Operating leases | 134,763 | 27,880 |
Finance leases | $ 44,432 | $ 57,286 |
Leases - Sale-Leaseback Transac
Leases - Sale-Leaseback Transaction and Long-lived Asset Impairment (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Aug. 01, 2020USD ($) | May 02, 2020USD ($)store | Aug. 01, 2020USD ($) | |
Sale Leaseback Transaction [Line Items] | |||
Net gain (loss) related to the sale-leaseback transaction | $ (9,352) | $ (9,352) | |
RH Baby & Child Gallery and Waterworks Showroom | |||
Sale Leaseback Transaction [Line Items] | |||
Impairment charge on long-lived assets | $ 3,500 | ||
Property Plant and Equipment Other Than Leased Assets | RH Baby & Child Gallery and Waterworks Showroom | |||
Sale Leaseback Transaction [Line Items] | |||
Impairment charge on long-lived assets | 1,500 | ||
Leased Assets | RH Baby & Child Gallery and Waterworks Showroom | |||
Sale Leaseback Transaction [Line Items] | |||
Impairment charge on long-lived assets | $ 2,000 | ||
Sale-leaseback Transaction | Minneapolis Design Gallery | |||
Sale Leaseback Transaction [Line Items] | |||
Sale proceeds | $ 25,500 | ||
Operating Leaseback Arrangement | Minneapolis Design Gallery | |||
Sale Leaseback Transaction [Line Items] | |||
Initial lease terms, operating lease | 20 years | 20 years | |
Renewal term, operating lease | 10 years | 10 years | |
Selling, general and administrative expenses | Operating Leaseback Arrangement | Minneapolis Design Gallery | |||
Sale Leaseback Transaction [Line Items] | |||
Net gain (loss) related to the sale-leaseback transaction | $ 9,400 | ||
RH Segment | |||
Sale Leaseback Transaction [Line Items] | |||
Properties with impairment charges | store | 1 | ||
Waterworks | |||
Sale Leaseback Transaction [Line Items] | |||
Properties with impairment charges | store | 1 |
Convertible Senior Notes - $350
Convertible Senior Notes - $350 million 0.00% Convertible Senior Notes due 2024 (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2019USD ($)D$ / shares | Oct. 30, 2021USD ($) | Jul. 31, 2021USD ($)$ / shares | Aug. 01, 2020USD ($) | Jul. 31, 2021USD ($)$ / shares | Aug. 01, 2020USD ($) | Jan. 30, 2021USD ($) | |
Debt default conditions | |||||||
Amortization of debt discount | $ 17,461,000 | $ 25,378,000 | |||||
Debt amount settled in cash and common stock | 28,111,000 | 215,846,000 | |||||
Trading days used to determine the conversion value | 45 days | ||||||
Convertible senior notes due 2024 | |||||||
Debt Instrument | |||||||
Debt instrument, issuance date | Sep. 30, 2019 | ||||||
Debt instrument, principal amount | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | |||
Debt instrument, maturity date | Sep. 15, 2024 | ||||||
Debt default conditions | |||||||
Events of default and acceleration of maturity description | Certain events are also considered “events of default” under the 2024 Notes, which may result in the acceleration of the maturity of the 2024 Notes, as described in the indenture governing the 2024 Notes. Events of default under the indenture for the 2024 Notes include, among other things, the occurrence of an event of default by us as defined under any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness of the Company or any of its significant subsidiaries for money borrowed, if that event of default (i) constitutes the failure to pay when due indebtedness in the aggregate principal amount in excess of $20 million and (ii) such event of default continues for a period of 30 days after written notice is delivered to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% of the aggregate principal amount of the 2024 Notes then outstanding. | ||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. | ||||||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | ||||||
Debt default, failure to pay due indebtedness, threshold period | 30 days | ||||||
Percentage of aggregate principal amount of notes outstanding | 25.00% | ||||||
Debt instrument, initial conversion rate | 100 | ||||||
Debt instrument, conversion principal amount | $ 1,000 | ||||||
Debt instrument, total conversion rate | 1,656,000 | ||||||
Debt instrument, convertible earliest date | Jun. 15, 2024 | ||||||
Premium on stock trigger price | 25.00% | ||||||
Debt instrument, convertible, stock price trigger | $ / shares | $ 169.12 | ||||||
Debt instrument, effective interest rate | 5.74% | ||||||
Discounts upon original issuance | $ 3,500,000 | ||||||
Third party offering costs | $ 1,300,000 | ||||||
Amortization of debt issuance costs | 100,000 | $ 100,000 | $ 300,000 | 300,000 | |||
Amortization of debt discount | 4,200,000 | $ 3,900,000 | 8,300,000 | $ 7,800,000 | |||
Convertible debt expected to be settled in cash and common stock | $ 67,000,000 | ||||||
Trading days used to determine the conversion value | 45 days | ||||||
Outstanding principal balance reclassified to current liabilities | $ 67,000,000 | 67,000,000 | 67,000,000 | ||||
Equity component | 87,252,000 | 87,252,000 | 87,252,000 | ||||
Equity component reclassified to mezzanine equity from permanent equity | $ 11,000,000 | $ 11,000,000 | $ 11,000,000 | ||||
Convertible senior notes due 2024 | Scenario, Plan | |||||||
Debt default conditions | |||||||
Debt amount settled in cash and common stock | $ 67,000,000 | ||||||
Convertible debt expected to be settled in cash and common stock | $ 67,000,000 | ||||||
Convertible senior notes due 2024 | Common Stock | |||||||
Debt default conditions | |||||||
Debt instrument, initial conversion rate | 4.7304 | ||||||
Conversion price per share | $ / shares | $ 211.40 | $ 211.40 | $ 211.40 | ||||
Convertible senior notes due 2024 | Convertible debt instrument conversion period one | |||||||
Debt default conditions | |||||||
Debt instrument, convertible trading days | D | 20 | ||||||
Debt instrument, convertible consecutive trading days | D | 30 | ||||||
Debt instrument, convertible percentage of stock price | 130.00% | ||||||
Convertible senior notes due 2024 | Convertible debt instrument conversion period two | |||||||
Debt default conditions | |||||||
Debt instrument, convertible trading days | D | 5 | ||||||
Debt instrument, convertible consecutive trading days | D | 10 | ||||||
Debt instrument, convertible percentage of stock price | 98.00% | ||||||
Private Offering | Convertible senior notes due 2024 | |||||||
Debt Instrument | |||||||
Debt instrument, principal amount | $ 350,000,000 | ||||||
Debt instrument, interest rate | 0.00% |
Convertible Senior Notes - Carr
Convertible Senior Notes - Carrying Value of the 2024 Notes (Detail) - Convertible senior notes due 2024 - USD ($) $ in Thousands | 3 Months Ended | |||
Oct. 30, 2021 | Jul. 31, 2021 | Jan. 30, 2021 | Sep. 30, 2019 | |
Liability component | ||||
Principal | $ 350,000 | $ 350,000 | $ 350,000 | |
Less: Debt discount | (57,563) | (65,818) | ||
Net carrying amount | 292,437 | 284,182 | ||
Equity component | 87,252 | 87,252 | ||
Outstanding principal balance reclassified to current liabilities | 67,000 | 67,000 | ||
Convertible debt expected to be settled in cash and common stock | 67,000 | |||
Equity component reclassified to mezzanine equity from permanent equity | $ 11,000 | $ 11,000 | ||
Scenario, Plan | ||||
Liability component | ||||
Convertible debt expected to be settled in cash and common stock | $ 67,000 |
Convertible Senior Notes - 2024
Convertible Senior Notes - 2024 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 6 Months Ended |
Sep. 30, 2019 | Jul. 31, 2021 | |
Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Deferred tax asset | $ 22.7 | |
Convertible senior notes due 2024 | ||
Debt Instrument | ||
Debt instrument, issuance date | Sep. 30, 2019 | |
Premium on stock trigger price | 25.00% | |
Debt instrument, convertible, stock price trigger | $ 169.12 | |
Deferred tax liability | $ 21.7 | |
Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.656 million shares of our common stock at a price of approximately $211.40 per share. | |
Total cost of convertible note hedge transactions | $ 91.4 | |
Premium on stock trigger price | 100.00% | |
Debt instrument, convertible, stock price trigger | $ 169.12 | |
Overallotment Option | Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Debt instrument, issuance date | Sep. 30, 2019 | |
Common Stock | Convertible senior notes due 2024 | ||
Debt Instrument | ||
Conversion price per share | $ 211.40 | $ 211.40 |
Common Stock | Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Shares issued upon conversion | 1,656 | |
Conversion price per share | $ 211.40 | |
Warrants sold to purchase common stock | 1,656 | |
Warrants price per share | $ 338.24 | |
Earnings dilution threshold, common stock price per share | $ 338.24 | |
Warrants Subject to Certain Adjustment Mechanisms | Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Cash proceeds from sale of warrants | $ 50.2 | |
Warrants Subject to Certain Adjustment Mechanisms | Common Stock | Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | Maximum | ||
Debt Instrument | ||
Warrants sold to purchase common stock | 3,300 |
Convertible Senior Notes - $335
Convertible Senior Notes - $335 million 0.00% Convertible Senior Notes due 2023 (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2020USD ($) | Jun. 30, 2018USD ($)D$ / sharesshares | Oct. 30, 2021USD ($) | Jul. 31, 2021USD ($)$ / sharesshares | May 01, 2021USD ($)shares | Aug. 01, 2020USD ($) | Jul. 31, 2021USD ($)$ / shares | Aug. 01, 2020USD ($)shares | Feb. 01, 2020USD ($) | Jan. 30, 2021USD ($) | |
Debt default conditions | ||||||||||
Debt amount settled in cash | $ 28,111,000 | $ 215,846,000 | ||||||||
(Gain) Loss on extinguishment of debt | $ (3,166,000) | $ 152,000 | (3,271,000) | 152,000 | $ (3,166,000) | |||||
Trading days used to determine the conversion value | 45 days | |||||||||
Amortization of debt discount | 17,461,000 | $ 25,378,000 | ||||||||
Common Stock | ||||||||||
Debt default conditions | ||||||||||
Shares acquired from notes settlement | shares | 600 | |||||||||
Convertible senior notes due 2023 | ||||||||||
Debt Instrument | ||||||||||
Debt instrument, principal amount | $ 335,000,000 | $ 301,819,000 | $ 301,819,000 | $ 335,000,000 | ||||||
Debt instrument, maturity date | Jun. 15, 2023 | |||||||||
Debt default conditions | ||||||||||
Events of default and acceleration of maturity description | Certain events are also considered “events of default” under the 2023 Notes, which may result in the acceleration of the maturity of the 2023 Notes, as described in the indenture governing the 2023 Notes. Events of default under the indenture for the 2023 Notes include, among other things, the occurrence of an event of default by us as defined under any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness of the Company or any of its significant subsidiaries for money borrowed, if that event of default (i) constitutes the failure to pay when due indebtedness in the aggregate principal amount in excess of $20 million and (ii) such event of default continues for a period of 30 days after written notice is delivered to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% of the aggregate principal amount of the 2023 Notes then outstanding. | |||||||||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||||||||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||||||||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. | |||||||||
Debt instrument, initial conversion rate | 100 | |||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||
Debt instrument, convertible earliest date | Mar. 15, 2023 | Mar. 15, 2023 | ||||||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | |||||||||
Debt instrument, effective interest rate | 6.35% | |||||||||
Aggregate principal amount, current | 172,141,000 | $ 172,141,000 | 2,354,000 | |||||||
Debt amount settled in cash | $ 2,400,000 | $ 30,800,000 | $ 2,400,000 | |||||||
Shares issued upon conversion | shares | 112,297 | 7,307 | ||||||||
(Gain) Loss on extinguishment of debt | $ (3,200,000) | $ 100,000 | ||||||||
Shares acquired from notes settlement | shares | 112,296 | |||||||||
Convertible debt expected to be settled in cash and common stock | $ 173,500,000 | |||||||||
Outstanding principal balance reclassified to current liabilities | 173,500,000 | 173,500,000 | 173,500,000 | |||||||
Equity component reclassified to mezzanine equity from permanent equity | 19,500,000 | 19,500,000 | $ 19,500,000 | |||||||
Discounts upon original issuance | $ 1,700,000 | |||||||||
Third party offering costs | $ 4,600,000 | |||||||||
Amortization of debt issuance costs | 300,000 | 300,000 | 500,000 | $ 500,000 | ||||||
Amortization of debt discount | $ 4,600,000 | $ 4,400,000 | $ 9,200,000 | $ 8,700,000 | ||||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period one | ||||||||||
Debt default conditions | ||||||||||
Debt instrument, convertible trading days | D | 20 | |||||||||
Debt instrument, convertible consecutive trading days | D | 30 | |||||||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period two | ||||||||||
Debt default conditions | ||||||||||
Debt instrument, convertible trading days | D | 5 | |||||||||
Debt instrument, convertible consecutive trading days | D | 10 | |||||||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||||||
Convertible senior notes due 2023 | Common Stock | ||||||||||
Debt default conditions | ||||||||||
Debt instrument, initial conversion rate | 5.1640 | |||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | $ 193.65 | |||||||
Shares issued upon conversion | shares | 1,730,000 | |||||||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2023 | ||||||||||
Debt Instrument | ||||||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||||||
Debt default conditions | ||||||||||
Shares issued upon conversion | shares | 1 | 2 | ||||||||
Shares received upon exercise of warrants | shares | 7,305 | |||||||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2023 | Common Stock | ||||||||||
Debt default conditions | ||||||||||
Conversion price per share | $ / shares | $ 193.65 | |||||||||
Private Offering | Convertible senior notes due 2023 | ||||||||||
Debt Instrument | ||||||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||||||
Debt instrument, principal amount | $ 300,000,000 | |||||||||
Debt instrument, interest rate | 0.00% | |||||||||
Overallotment Option | Convertible senior notes due 2023 | ||||||||||
Debt Instrument | ||||||||||
Debt instrument, principal amount | $ 35,000,000 | |||||||||
Scenario, Plan | Convertible senior notes due 2023 | ||||||||||
Debt default conditions | ||||||||||
Debt amount settled in cash | $ 173,500,000 |
Convertible Senior Notes - Ca_2
Convertible Senior Notes - Carrying Value of the 2023 Notes (Detail) - Convertible senior notes due 2023 - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 | Jun. 30, 2018 |
Liability component | |||
Principal | $ 301,819 | $ 335,000 | $ 335,000 |
Less: Debt discount | (33,914) | (47,064) | |
Net carrying amount | 267,905 | 287,936 | |
Equity component | $ 90,099 | $ 90,990 |
Convertible Senior Notes - 2023
Convertible Senior Notes - 2023 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018USD ($)$ / sharesshares | Jul. 31, 2021USD ($)$ / sharesshares | May 01, 2021shares | Jul. 31, 2021USD ($)$ / shares | |
Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Deferred tax asset | $ 22,700 | $ 22,700 | ||
Convertible senior notes due 2023 | ||||
Debt Instrument | ||||
Shares issued upon conversion | shares | 112,297 | 7,307 | ||
Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Debt instrument, issuance date | Jun. 30, 2018 | |||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.730 million shares of our common stock at a price of approximately $193.65 per share. | |||
Shares issued upon conversion | shares | 1 | 2 | ||
Total cost of convertible note hedge transactions | $ 91,900 | |||
Deferred tax liability | $ 22,300 | $ 22,300 | ||
Deferred tax asset | $ 22,500 | $ 22,500 | ||
Common Stock | Convertible senior notes due 2023 | ||||
Debt Instrument | ||||
Shares issued upon conversion | shares | 1,730,000 | |||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | $ 193.65 | |
Common Stock | Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Conversion price per share | $ / shares | $ 193.65 | |||
Convertible note hedge, number of shares | 1,730 | |||
Warrants price per share | $ / shares | $ 309.84 | |||
Earnings dilution threshold, common stock price per share | $ / shares | $ 309.84 | |||
Warrants Subject to Certain Adjustment Mechanisms | Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Cash proceeds from sale of warrants | $ 51,000 | |||
Warrants Subject to Certain Adjustment Mechanisms | Common Stock | Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | Maximum | ||||
Debt Instrument | ||||
Warrants sold to purchase common stock | shares | 3,500,000 |
Credit Facilities - Outstanding
Credit Facilities - Outstanding Balances (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Line of Credit Facility | ||
Outstanding Amount | $ 26,288 | $ 37,532 |
Unamortized Debt Issuance Costs | (101) | (171) |
Net Carrying Amount | 26,187 | 37,361 |
Equipment promissory notes | ||
Line of Credit Facility | ||
Outstanding Amount | 26,288 | 37,532 |
Unamortized Debt Issuance Costs | (101) | (171) |
Net Carrying Amount | 26,187 | 37,361 |
2024 | 1,000 | |
2023 | 1,200 | |
Other non-current assets | Asset based credit facility | ||
Line of Credit Facility | ||
Deferred financing fees | 4,200 | $ 1,500 |
Other current liabilities | Equipment promissory notes | ||
Line of Credit Facility | ||
Aggregate amounts outstanding | 24,100 | |
Equipment promissory notes, net | Equipment promissory notes | ||
Line of Credit Facility | ||
Aggregate amounts outstanding | $ 2,200 |
Credit Facilities - Asset Based
Credit Facilities - Asset Based Credit Facility (Detail) $ in Thousands | Jul. 29, 2021USD ($) | Jul. 31, 2021USD ($) | Aug. 01, 2020USD ($) | Jan. 30, 2021USD ($) |
Line of Credit Facility | ||||
Outstanding revolving line of credit | $ 26,187 | $ 37,361 | ||
Original Credit Agreement | ||||
Line of Credit Facility | ||||
Agreement, date | Aug. 31, 2011 | |||
Credit Agreement | ||||
Line of Credit Facility | ||||
Agreement, date | Jun. 28, 2017 | |||
Amended Credit Agreement | ||||
Line of Credit Facility | ||||
Agreement, date | Jul. 29, 2021 | |||
Equipment Loan Facility | Maximum | ||||
Line of Credit Facility | ||||
Maturity term | 4 years | |||
Equipment Loan Facility | Minimum | ||||
Line of Credit Facility | ||||
Maturity term | 3 years | |||
Asset based credit facility | ||||
Line of Credit Facility | ||||
Repaid amount of loan | $ 191,600 | |||
Asset based credit facility | Amended Credit Agreement | ||||
Line of Credit Facility | ||||
Line of credit facility, maximum borrowing capacity | $ 600,000 | |||
Line of credit facility, accordion feature | 300,000 | |||
FCCR Covenant, threshold amount | $ 40,000 | |||
FCCR Covenant, threshold amount (percentage) | 10.00% | |||
FCCR Covenant ratio | 1 | |||
Amended Credit Agreement, required daily sweep terms | The Amended Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) when the unused availability under the Amended Credit Agreement drops below the greater of (A) $40.0 million and (B) an amount based on 10% of the total borrowing availability at the time. | |||
Asset based credit facility | Amended Credit Agreement | Maximum | Scenario, Plan | ||||
Line of Credit Facility | ||||
Line of credit facility, maximum borrowing capacity | $ 900,000 | |||
Asset based credit facility | Amended Credit Agreement | Minimum | ||||
Line of Credit Facility | ||||
Line of credit facility, maximum borrowing capacity | 600,000 | |||
Asset based credit facility | Amended Credit Agreement | Restoration Hardware Canada, Inc. | ||||
Line of Credit Facility | ||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | |||
Revolving Credit Facility | Amended Credit Agreement | ||||
Line of Credit Facility | ||||
Line of Credit, outstanding amount | $ 0 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 389,100 | |||
Letters of credit | Amended Credit Agreement | ||||
Line of Credit Facility | ||||
Line of Credit, outstanding amount | 20,100 | |||
Equipment promissory notes | ||||
Line of Credit Facility | ||||
Outstanding revolving line of credit | $ 26,187 | $ 37,361 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value and Carrying Value of Notes (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Convertible senior notes due 2023 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | $ 287,314 | $ 301,794 |
Convertible senior notes, Carrying Value | 267,905 | 287,936 |
Convertible senior notes due 2024 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | 314,630 | 286,161 |
Convertible senior notes, Carrying Value | $ 292,437 | $ 284,182 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Income Taxes | ||||
Income tax expense | $ 3,009 | $ 18,879 | $ 44,733 | $ 17,456 |
Effective income tax rate | 1.30% | 16.10% | 11.10% | 15.50% |
Unrecognized tax benefits | $ 8,900 | $ 8,900 | ||
Tax expense and the effective tax rate, if recognized | 8,100 | 8,100 | ||
Exposures related to unrecognized tax benefits | $ 6,200 | $ 6,200 | ||
Period of unrecognized tax benefits change | 12 months |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Net Income Per Share | ||||
Weighted-average shares-basic | 21,166,638 | 19,386,115 | 21,084,941 | 19,314,479 |
Effect of dilutive stock-based awards | 6,757,728 | 5,205,159 | 6,737,107 | 4,787,988 |
Effect of dilutive convertible senior notes | 4,054,732 | 1,973,431 | 3,772,507 | 1,281,263 |
Weighted-average shares-diluted | 31,979,098 | 26,564,705 | 31,594,555 | 25,383,730 |
Net Income Per Share - Schedu_2
Net Income Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share Footnotes (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 | Sep. 30, 2019 | Jun. 30, 2018 |
Convertible senior notes due 2020 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 300,000 | |||
Convertible senior notes due 2020 | Common Stock | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 118.13 | |||
Convertible senior notes due 2020 | Warrant | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 189 | |||
Convertible senior notes due 2023 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 301,819 | $ 335,000 | $ 335,000 | |
Convertible senior notes due 2023 | Common Stock | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 193.65 | $ 193.65 | ||
Convertible senior notes due 2023 | Warrant | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 309.84 | |||
Convertible senior notes due 2024 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 350,000 | $ 350,000 | $ 350,000 | |
Convertible senior notes due 2024 | Common Stock | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 211.40 | $ 211.40 | ||
Convertible senior notes due 2024 | Warrant | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 338.24 |
Net Income Per Share - Anti-Dil
Net Income Per Share - Anti-Dilutive Securities Excluded from Diluted Net Income per Share (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options were excluded from calculation of diluted net earnings share | 82,562 | 800,854 | 68,918 | 521,717 |
Share Repurchase Program (Detai
Share Repurchase Program (Detail) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 6 Months Ended | 12 Months Ended | ||
Aug. 01, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | Jul. 31, 2021 | |
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program | $ 72 | |||
$950 Million Repurchase Program | ||||
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program, shares | 2.2 | |||
Shares of common stock purchased at an average price per share under repurchase program | $ 115.36 | |||
Shares of common stock purchased under repurchase program | $ 250,000 | |||
Share repurchase program authorized amount | $ 950,000 | |||
Amount of shares available under repurchase program | $ 450,000 | |||
Fiscal 2018 $700 million repurchase program | ||||
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program, shares | 2 | |||
Shares of common stock purchased at an average price per share under repurchase program | $ 122.10 | |||
Shares of common stock purchased under repurchase program | $ 250,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) | Oct. 18, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Jan. 30, 2021 | May 31, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Stock-based compensation expense | $ 10,100,000 | $ 6,900,000 | $ 25,431,000 | $ 12,689,000 | |||
Stock-based compensation cost capitalized | 0 | 0 | |||||
Rollover units and profit interests | 3,632,000 | 3,632,000 | $ 3,490,000 | ||||
Selling, general and administrative expenses | 238,688,000 | $ 195,851,000 | $ 457,777,000 | 360,052,000 | |||
Design Investors WW Acquisition Company, LLC | Profit interests | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Profit interest expected life | 5 years | ||||||
Selling, general and administrative expenses | $ 100,000 | $ 200,000 | |||||
Liability associated with the profit interests | 2,100,000 | 2,100,000 | 2,000,000 | ||||
Stock Options | Chairman and Chief Executive Officer | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Option to purchase of common stock | 700,000 | ||||||
Exercise price of option granted | $ 385.30 | ||||||
Appreciation rights | Design Investors WW Acquisition Company, LLC | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Rollover units and profit interests | 1,500,000 | 1,500,000 | $ 1,500,000 | $ 1,500,000 | |||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Stock Options | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Unrecognized compensation expense related to unvested options | 97,700,000 | $ 97,700,000 | |||||
Unrecognized compensation expense with weighted-average period | 5 years 14 days | ||||||
Aggregate intrinsic value of options outstanding | 4,395,800,000 | $ 4,395,800,000 | |||||
Aggregate intrinsic value of options vested or expected to vest | 4,240,600,000 | 4,240,600,000 | |||||
Aggregate intrinsic value of options exercisable | $ 3,794,800,000 | $ 3,794,800,000 | |||||
Outstanding shares | 7,895,050 | 7,895,050 | |||||
Options outstanding, weighted-average exercise price per share | $ 107.35 | $ 107.35 | |||||
Weighted-average remaining contractual life of options exercisable | 3 years 4 months 17 days | ||||||
Numbers of options vested | 7,555,774 | ||||||
Vested weighted-average exercise price per share | $ 102.88 | ||||||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Stock Options | Chairman and Chief Executive Officer | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Unrecognized compensation expense related to unvested options | $ 44,800,000 | $ 44,800,000 | |||||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Restricted stock and restricted stock unit | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Unrecognized compensation expense related to unvested options | $ 2,900,000 | $ 2,900,000 | |||||
Unrecognized compensation expense with weighted-average period | 1 year 9 months 3 days | ||||||
Restricted stock awards outstanding | 23,690 | 23,690 | |||||
Restricted stock awards outstanding with weighted-average grant date fair value per share | $ 157.52 | $ 157.52 | |||||
Weighted-average fair value per share of awards granted | $ 42.47 | $ 43.06 | |||||
Vested restricted stock unit | 61,340 | 65,760 | |||||
Time-Based Restrictions and Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | |||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||
Stock-based compensation expense | $ 5,800,000 | $ 11,700,000 | |||||
Aggregate non-cash stock compensation expense | $ 173,600,000 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) | Jul. 31, 2021USD ($) |
Commitments and Contingencies. | |
Material off balance sheet commitments | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Detail) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021storecustomer | Aug. 01, 2020customer | Jul. 31, 2021storecustomersegment | Aug. 01, 2020customer | |
Segment Reporting Information | ||||
Number of operating segments | segment | 3 | |||
Number of RH outlet stores | 38 | 38 | ||
Number of customers accounted for more than 10% of Company's revenues | customer | 0 | 0 | 0 | 0 |
Sales | Customer concentration risk | ||||
Segment Reporting Information | ||||
Threshold portion of specified customers portion in total revenues | 10.00% | 10.00% | 10.00% | 10.00% |
Canada | ||||
Segment Reporting Information | ||||
Number of retail stores | 4 | 4 | ||
Number of RH outlet stores | 2 | 2 | ||
U.K | ||||
Segment Reporting Information | ||||
Number of retail stores | 1 | 1 |
Segment Reporting - Statements
Segment Reporting - Statements of Operations Metrics Reviewed by CODM to Evaluate Performance Internally or as Required under ASC 280 (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Segment Reporting Information | ||||
Net revenues | $ 988,859 | $ 709,282 | $ 1,849,651 | $ 1,192,177 |
Gross profit | 487,676 | 332,419 | 894,653 | 532,073 |
Depreciation and amortization | 22,670 | 25,342 | 46,556 | 50,212 |
Share of equity method investments losses | 2,486 | 4,581 | ||
RH Segment | ||||
Segment Reporting Information | ||||
Net revenues | 947,618 | 681,387 | 1,767,441 | 1,136,344 |
Gross profit | 467,067 | 320,481 | 853,620 | 508,243 |
Depreciation and amortization | 21,484 | 24,234 | 44,164 | 47,951 |
Waterworks | ||||
Segment Reporting Information | ||||
Net revenues | 41,241 | 27,895 | 82,210 | 55,833 |
Gross profit | 20,609 | 11,938 | 41,033 | 23,830 |
Depreciation and amortization | $ 1,186 | $ 1,108 | $ 2,392 | $ 2,261 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Metrics Under ASC 280 (Detail) - USD ($) $ in Thousands | Jul. 31, 2021 | Jan. 30, 2021 |
Segment Reporting Information | ||
Goodwill | $ 141,132 | $ 141,100 |
Tradenames, trademarks and other intangible assets | 72,584 | 71,663 |
Equity method investments | 97,412 | 100,603 |
Total assets | 3,467,152 | 2,898,313 |
RH Segment | ||
Segment Reporting Information | ||
Goodwill | 141,132 | 141,100 |
Tradenames, trademarks and other intangible assets | 55,584 | 54,663 |
Total assets | 3,215,534 | 2,659,944 |
Waterworks | ||
Segment Reporting Information | ||
Tradenames, trademarks and other intangible assets | 17,000 | 17,000 |
Total assets | 154,206 | 137,766 |
Real Estate Development | ||
Segment Reporting Information | ||
Equity method investments | 97,412 | 100,603 |
Total assets | $ 97,412 | $ 100,603 |
Segment Reporting - Balance S_2
Segment Reporting - Balance Sheet Metrics Under ASC 280 Footnotes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Segment Reporting Information | |||||||
Tradenames, trademarks and other intangible assets | $ 20,459 | ||||||
Equity Method Investments | $ 97,412 | $ 100,603 | |||||
Waterworks | |||||||
Segment Reporting Information | |||||||
Goodwill impairment | $ 17,400 | $ 33,700 | $ 51,100 | ||||
Tradenames, trademarks and other intangible assets | $ 20,500 | 35,100 | 20,500 | $ 14,600 | |||
Real Estate Development | |||||||
Segment Reporting Information | |||||||
Equity Method Investments | $ 97,412 | $ 100,603 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income (Loss) and Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | Feb. 01, 2020 | |
Segment Reporting Information | |||||
Non-cash compensation | $ (11,728) | $ (5,864) | |||
Loss on sale leaseback transaction | $ (9,352) | $ (9,352) | |||
Recall accrual | 4,780 | 500 | 4,780 | ||
Asset impairments and change in useful lives | (1,339) | (7,354) | (9,810) | (7,354) | |
Reorganization related costs | (2,884) | (449) | (7,027) | (449) | |
Income from operations | $ 248,988 | 136,568 | 436,876 | 172,021 | 248,988 |
Interest expense-net | 13,581 | 19,418 | 26,889 | 39,047 | 13,581 |
(Gain) loss on extinguishment of debt | 3,166 | (152) | 3,271 | (152) | 3,166 |
Tradename impairment | 20,459 | ||||
Income before income taxes | $ 232,241 | 117,302 | 406,716 | 112,667 | 232,241 |
Operating segments | RH Segment | |||||
Segment Reporting Information | |||||
Income from operations | 153,350 | 445,252 | 202,867 | 257,242 | |
Operating segments | Waterworks | |||||
Segment Reporting Information | |||||
Income from operations | $ 1,573 | $ 11,655 | $ 123 | $ 5,413 |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues, Categories (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2021 | Aug. 01, 2020 | Jul. 31, 2021 | Aug. 01, 2020 | |
Segment Reporting Information | ||||
Total net revenues | $ 988,859 | $ 709,282 | $ 1,849,651 | $ 1,192,177 |
Furniture | ||||
Segment Reporting Information | ||||
Total net revenues | 699,729 | 483,205 | 1,279,740 | 795,728 |
Non-furniture | ||||
Segment Reporting Information | ||||
Total net revenues | $ 289,130 | $ 226,077 | $ 569,911 | $ 396,449 |