Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 29, 2022 | Dec. 02, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 29, 2022 | |
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 | 23,612,501 | |
Entity Central Index Key | 0001528849 | |
Current Fiscal Year End Date | --01-28 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,150,466 | $ 2,177,889 |
Restricted cash (Note 5) | 3,882 | |
Accounts receivable-net | 58,563 | 57,914 |
Merchandise inventories | 819,299 | 734,289 |
Prepaid expense and other current assets | 234,247 | 121,350 |
Total current assets | 3,266,457 | 3,091,442 |
Property and equipment-net | 1,577,900 | 1,227,920 |
Operating lease right-of-use assets | 536,452 | 551,045 |
Goodwill | 141,021 | 141,100 |
Tradenames, trademarks and other intangible assets | 74,269 | 73,161 |
Deferred tax assets | 63,105 | 56,843 |
Equity method investments | 97,005 | 100,810 |
Other non-current assets | 127,506 | 298,149 |
Total assets | 5,883,715 | 5,540,470 |
Current liabilities: | ||
Accounts payable and accrued expenses | 389,965 | 442,379 |
Deferred revenue and customer deposits | 361,113 | 387,933 |
Operating lease liabilities | 77,858 | 73,834 |
Other current liabilities | 104,538 | 146,623 |
Total current liabilities | 935,176 | 1,063,758 |
Real estate loans (Note 5) | 17,912 | |
Non-current operating lease liabilities | 521,093 | 540,513 |
Non-current finance lease liabilities | 656,643 | 560,550 |
Other non-current obligations | 7,151 | 8,706 |
Total liabilities | 4,589,768 | 4,370,193 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock-$0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of October 29, 2022 and January 29, 2022 | ||
Common stock-$0.0001 par value per share, 180,000,000 shares authorized, 23,609,536 shares issued and outstanding as of October 29, 2022; 21,506,967 shares issued and outstanding as of January 29, 2022 | 2 | 2 |
Additional paid-in capital | 313,887 | 620,577 |
Accumulated other comprehensive loss | (12,685) | (1,410) |
Retained earnings | 992,743 | 551,108 |
Total stockholders' equity | 1,293,947 | 1,170,277 |
Total liabilities and stockholders' equity | 5,883,715 | 5,540,470 |
Term loan B | ||
Current liabilities: | ||
Term loan-net | 1,940,701 | 1,953,203 |
Term loan B-2 | ||
Current liabilities: | ||
Term loan-net | 469,396 | |
2023 Notes | ||
Current liabilities: | ||
Convertible senior notes due-net current | 1,702 | 9,389 |
Convertible senior notes due-noncurrent | 59,002 | |
2024 Notes | ||
Current liabilities: | ||
Convertible senior notes due-net current | 3,600 | |
Convertible senior notes due-noncurrent | $ 41,696 | $ 184,461 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 29, 2022 | Jan. 29, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
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 | 23,609,536 | 21,506,967 |
Common stock, shares outstanding | 23,609,536 | 21,506,967 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
Net revenues | $ 869,066 | $ 1,006,428 | $ 2,817,978 | $ 2,856,079 |
Cost of goods sold | 448,288 | 501,174 | 1,375,399 | 1,456,172 |
Gross profit | 420,778 | 505,254 | 1,442,579 | 1,399,907 |
Selling, general and administrative expenses | 250,528 | 232,715 | 832,627 | 690,492 |
Income from operations | 170,250 | 272,539 | 609,952 | 709,415 |
Other expenses | ||||
Interest expense-net | 31,417 | 13,223 | 78,536 | 40,112 |
Loss on extinguishment of debt | 18,513 | 169,578 | 21,784 | |
Other expense-net | 1,989 | 4,841 | ||
Total other expenses | 33,406 | 31,736 | 252,955 | 61,896 |
Income before income taxes | 136,844 | 240,803 | 356,997 | 647,519 |
Income tax expense (benefit) | 36,162 | 54,391 | (70,867) | 99,124 |
Income before equity method investments | 100,682 | 186,412 | 427,864 | 548,395 |
Share of equity method investments losses | (1,922) | (2,313) | (6,118) | (6,894) |
Net income | $ 98,760 | $ 184,099 | $ 421,746 | $ 541,501 |
Weighted-average shares used in computing basic net income per share | 23,681,482 | 21,430,557 | 23,588,464 | 21,200,146 |
Basic net income per share (Note 13) | $ 4.17 | $ 8.59 | $ 25.07 | $ 25.54 |
Weighted-average shares used in computing diluted net income per share | 26,098,265 | 31,291,079 | 27,255,911 | 31,493,396 |
Diluted net income per share (Note 13) | $ 3.78 | $ 5.88 | $ 21.70 | $ 17.19 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 98,760 | $ 184,099 | $ 421,746 | $ 541,501 |
Net losses from foreign currency translation | (4,890) | (2,097) | (11,275) | (1,397) |
Comprehensive income | $ 93,870 | $ 182,002 | $ 410,471 | $ 540,104 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Mezzanine Equity | Common Stock | Additional Paid-In Capital Impact of adoption, adjustment | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) Impact of adoption, adjustment | Retained Earnings (Accumulated Deficit) | Treasury Stock | Impact of adoption, adjustment | Total |
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 | 37,284 | 37,284 | ||||||||
Issuance of restricted stock, Shares | 1,260 | |||||||||
Vested and delivered restricted stock units | (19,354) | (19,354) | ||||||||
Vested and delivered restricted stock units, Shares | 39,679 | |||||||||
Exercise of stock options | 30,080 | 30,080 | ||||||||
Exercise of stock options, Shares | 428,788 | |||||||||
Settlement of convertible senior notes | (674,549) | $ 660,784 | (13,765) | |||||||
Settlement of convertible senior notes, Shares | 983,694 | (983,675) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 660,784 | $ (660,784) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (983,675) | 983,675 | ||||||||
Termination of convertible note hedge | (13,571) | (13,571) | ||||||||
Net income | 541,501 | 541,501 | ||||||||
Net losses from foreign currency translation | (1,397) | (1,397) | ||||||||
Balances at Oct. 30, 2021 | $ 2 | 602,571 | 1,168 | 404,063 | 1,007,804 | |||||
Balances, shares at Oct. 30, 2021 | 21,465,133 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Reclassification of equity component to mezzanine equity related to early converted senior notes outstandingnet | $ 13,571 | |||||||||
Balances at Oct. 30, 2021 | 13,571 | |||||||||
Balances at Jul. 31, 2021 | $ 2 | 583,112 | 3,265 | 219,964 | 806,343 | |||||
Balances, shares at Jul. 31, 2021 | 21,407,717 | |||||||||
Stock-based compensation | 11,995 | 11,995 | ||||||||
Vested and delivered restricted stock units | (706) | (706) | ||||||||
Vested and delivered restricted stock units, Shares | 1,981 | |||||||||
Exercise of stock options | 4,101 | 4,101 | ||||||||
Exercise of stock options, Shares | 55,419 | |||||||||
Settlement of convertible senior notes | (592,414) | $ 579,539 | (12,875) | |||||||
Settlement of convertible senior notes, Shares | 864,090 | (864,074) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 579,539 | $ (579,539) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (864,074) | 864,074 | ||||||||
Reclassification of equity component to mezzanine equity related to early converted senior notes outstanding | (16,944) | 16,944 | 16,944 | |||||||
Net income | 184,099 | 184,099 | ||||||||
Net losses from foreign currency translation | (2,097) | (2,097) | ||||||||
Balances at Oct. 30, 2021 | $ 2 | 602,571 | 1,168 | 404,063 | 1,007,804 | |||||
Balances, shares at Oct. 30, 2021 | 21,465,133 | |||||||||
Balances at Jul. 31, 2021 | 30,515 | |||||||||
Balances at Oct. 30, 2021 | $ 13,571 | |||||||||
Balances at Jan. 29, 2022 | $ 2 | $ (56,390) | 620,577 | (1,410) | $ 19,889 | 551,108 | $ (36,501) | 1,170,277 | ||
Balances, shares at Jan. 29, 2022 | 21,506,967 | |||||||||
Stock-based compensation | 33,725 | 33,725 | ||||||||
Issuance of restricted stock, Shares | 3,577 | |||||||||
Vested and delivered restricted stock units | (494) | (494) | ||||||||
Vested and delivered restricted stock units, Shares | 2,985 | |||||||||
Exercise of stock options | 153,568 | 153,568 | ||||||||
Exercise of stock options, Shares | 3,223,552 | |||||||||
Repurchases of common stock | $ (286,441) | $ (286,441) | ||||||||
Repurchases of common stock, Shares | (1,127,557) | 1,127,557 | (1,127,557) | |||||||
Retirement of treasury stock | (286,441) | $ 286,441 | ||||||||
Retirement of treasury stock, Shares | (1,127,557) | (1,127,557) | ||||||||
Settlement of convertible senior notes | (14,705) | $ 14,705 | ||||||||
Settlement of convertible senior notes, Shares | 36,980 | (36,968) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 14,705 | $ (14,705) | ||||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (36,968) | 36,968 | ||||||||
Termination of common stock warrants | (386,708) | $ (386,708) | ||||||||
Termination of convertible note hedge | 236,050 | 236,050 | ||||||||
Net income | 421,746 | 421,746 | ||||||||
Net losses from foreign currency translation | (11,275) | (11,275) | ||||||||
Balances at Oct. 29, 2022 | $ 2 | 313,887 | (12,685) | 992,743 | 1,293,947 | |||||
Balances, shares at Oct. 29, 2022 | 23,609,536 | |||||||||
Balances at Jul. 30, 2022 | $ 2 | 334,054 | (7,795) | 893,983 | 1,220,244 | |||||
Balances, shares at Jul. 30, 2022 | 23,715,191 | |||||||||
Stock-based compensation | 10,187 | 10,187 | ||||||||
Vested and delivered restricted stock units | (171) | (171) | ||||||||
Vested and delivered restricted stock units, Shares | 1,119 | |||||||||
Exercise of stock options | 1,527 | 1,527 | ||||||||
Exercise of stock options, Shares | 20,777 | |||||||||
Repurchases of common stock | $ (31,710) | (31,710) | ||||||||
Repurchases of common stock, Shares | (127,557) | 127,557 | ||||||||
Retirement of treasury stock | (31,710) | $ 31,710 | ||||||||
Retirement of treasury stock, Shares | (127,557) | |||||||||
Settlement of convertible senior notes, Shares | 6 | |||||||||
Net income | 98,760 | 98,760 | ||||||||
Net losses from foreign currency translation | (4,890) | (4,890) | ||||||||
Balances at Oct. 29, 2022 | $ 2 | $ 313,887 | $ (12,685) | $ 992,743 | $ 1,293,947 | |||||
Balances, shares at Oct. 29, 2022 | 23,609,536 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 421,746 | $ 541,501 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 79,760 | 71,375 |
Non-cash operating lease cost | 55,912 | 54,084 |
Asset impairments | 19,080 | 7,354 |
Gain on sale of building and land | (775) | |
Amortization of debt discount | 24,236 | |
Stock-based compensation expense | 33,725 | 37,426 |
Non-cash finance lease interest expense | 23,526 | 19,468 |
Product recalls | 560 | 840 |
Deferred income taxes | 5,627 | (122) |
Loss on extinguishment of debt | 169,578 | 21,784 |
Gain on derivative instruments-net | (1,724) | |
Share of equity method investments losses | 6,118 | 6,894 |
Other non-cash items | 5,542 | (6,030) |
Cash paid attributable to accretion of debt discount upon settlement of debt | (39,078) | |
Change in assets and liabilities: | ||
Accounts receivable | (675) | (1,131) |
Merchandise inventories | (96,598) | (89,225) |
Prepaid expense and other assets | (152,892) | (39,168) |
Landlord assets under construction-net of tenant allowances | (43,380) | (50,351) |
Accounts payable and accrued expenses | (44,999) | (17,980) |
Deferred revenue and customer deposits | (26,604) | 104,419 |
Other current liabilities | (36,596) | (28,106) |
Current and non-current operating lease liabilities | (56,936) | (59,194) |
Other non-current obligations | (23,974) | (25,314) |
Net cash provided by operating activities | 336,021 | 533,682 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (109,675) | (153,774) |
Proceeds from sale of assets | 5,287 | |
Equity method investments | (2,313) | (4,816) |
Net cash used in investing activities | (106,701) | (158,590) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings under term loan | 500,000 | 2,000,000 |
Repayments under term loans | (15,000) | |
Borrowings under real estate loans | 16,000 | |
Repayments under real estate loans | (4) | |
Repayments under promissory and equipment security notes | (13,157) | (17,164) |
Repayments of convertible senior notes | (13,053) | (235,126) |
Repayment under convertible senior notes repurchase obligation | (395,372) | |
Debt extinguishment costs | (8,059) | |
Debt issuance costs | (27,733) | (26,411) |
Principal payments under finance leases | (6,798) | (10,511) |
Proceeds from termination of convertible senior note hedges | 231,796 | |
Payments for termination of common stock warrants | (390,934) | |
Repurchases of common stock | (286,441) | |
Proceeds from exercise of stock options | 153,568 | 30,080 |
Tax withholdings related to issuance of stock-based awards | (494) | (19,354) |
Net cash provided by (used in) financing activities | (255,681) | 1,721,514 |
Effects of foreign currency exchange rate translation | (1,155) | 34 |
Net increase (decrease) in cash and cash equivalents , restricted cash and restricted cash equivalents | (27,516) | 2,096,640 |
Cash and cash equivalents, restricted cash and restricted cash equivalents | ||
Beginning of period-cash and cash equivalents | 2,177,889 | 100,446 |
Beginning of period-restricted cash equivalents (acquisition related escrow deposits) | 3,975 | 6,625 |
Beginning of period-cash and cash equivalents, restricted cash and restricted cash equivalents | 2,181,864 | 107,071 |
End of period-cash and cash equivalents | 2,150,466 | 2,198,961 |
End of period-restricted cash | 3,882 | |
End of period-restricted cash equivalents (acquisition related escrow deposits) | 4,750 | |
End of period-cash and cash equivalents , restricted cash and restricted cash equivalents | 2,154,348 | 2,203,711 |
Non-cash transactions: | ||
Property and equipment additions in accounts payable and accrued expenses at period-end | 18,915 | 12,313 |
Property and equipment additions acquired under real estate loans | (2,000) | |
Landlord asset additions in accounts payable and accrued expenses at period-end | 6,924 | 28,666 |
Reclassification of assets from landlord assets under construction to finance lease right-of-use assets | 221,886 | 32,405 |
Conversion of loan receivables into equity of variable interest entities (Note 5) | 300 | |
Extinguishment of convertible senior notes related to repurchase obligation (Note 9) | (261,988) | |
Financing liability and embedded derivative arising from convertible senior notes repurchase (Note 9) | 405,577 | |
Shares issued on settlement of convertible senior notes | (14,705) | (674,549) |
Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes | $ 14,705 | $ 660,784 |
The Company
The Company | 9 Months Ended |
Oct. 29, 2022 | |
The Company | |
The Company | NOTE 1—THE COMPANY Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” “our” or the “Company”), is a leading retailer and luxury lifestyle brand operating primarily in the home furnishings market. Our curated and fully integrated assortments are presented consistently across our sales channels, including our retail locations, websites and Source Books. We offer merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby, child and teen furnishings. As of October 29, 2022, we operated a total of 67 RH Galleries and 39 RH Outlet stores in 31 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. In September 2022, we opened our first RH Guesthouse in New York. 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 October 29, 2022, and the results of operations for the three and nine months ended October 29, 2022 and October 30, 2021. Our current fiscal year, which consists of 52 weeks, ends on January 28, 2023 (“fiscal 2022”). The condensed consolidated financial statements include our accounts and those of our wholly owned subsidiaries, as well as the financial information of variable interest entities (“VIEs”) where we represent the primary beneficiary and have the power to direct the activities that most significantly impact the entity’s performance. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. Noncontrolling interests represent third-party interests in the net assets under VIEs determined by applying the hypothetical liquidation at book value methodology. Noncontrolling interests in VIEs are immaterial as of October 29, 2022. Refer to Note 5— Variable Interest Entities 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, and 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 nine months ended October 29, 2022. 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 29, 2022 (the “2021 Form 10-K”). The results of operations for the three and nine months ended October 29, 2022 and October 30, 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 and other factors as discussed in Macro-Economic Factors and COVID-19 Pandemic Macro-Economic Factors and COVID-19 Pandemic There are a number of macro-economic factors and uncertainties affecting the overall business climate as well as our business, including increased inflation and rising interest rates. These factors may have a number of adverse effects on macro-economic conditions and markets in which we operate, with the potential for an economic recession and a sustained downturn in the housing market. Factors such as a slowdown in the housing market or negative trends in stock market prices could have a negative impact on demand for our products. We believe that these macro-economic factors have contributed to the slowdown in demand that we have experienced in our business over the last several fiscal quarters. The COVID-19 pandemic continues to cause challenges in certain aspects of our business operations primarily related to our supply chain, including delays in our receipt of products from vendors, which have affected our ability to convert demand into revenues at normal historic rates. While our performance during the pandemic demonstrates the desirability of our exclusive products, consumer spending have shifted away from spending on the home and home-related categories toward travel and leisure and other areas. Our decisions regarding the sources and uses of capital will continue to reflect and adapt to changes in market conditions and our business including further developments with respect to macro-economic factors and the pandemic. Refer to the section entitled “Risk Factors” in our 2021 Form 10-K. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Oct. 29, 2022 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS New Accounting Standards or Updates Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity We adopted ASU 2020-06 in the first quarter of fiscal 2022 using a modified retrospective transition method. Accordingly, the cumulative effect of the adoption on our opening fiscal 2022 condensed consolidated balance sheets was as follows: ASU 2020-06 JANUARY 29, ADOPTION JANUARY 29, 2022 ADJUSTMENTS 2022 (in thousands) Assets Property and equipment—net $ 1,227,920 $ (12,385) $ 1,215,535 Deferred tax assets 56,843 11,909 68,752 Liabilities Convertible senior notes due 2023—net 59,002 5,684 64,686 Convertible senior notes due 2024—net 184,461 30,341 214,802 Equity Additional paid-in capital 620,577 (56,390) 564,187 Retained earnings 551,108 19,889 570,997 Reference Rate Reform In March 2020, the FASB issued ASU 2020-04 — Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2021-01—Reference Rate Reform (Topic 848): Scope — Credit Facilities New Accounting Standards or Updates Not Yet Adopted Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04 — Disclosure of Supplier Finance Program Obligations |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 9 Months Ended |
Oct. 29, 2022 | |
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: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Federal and state tax receivable (1) $ 82,310 $ — Promissory notes receivable, including interest (2) 35,463 8,401 Other current assets 28,094 9,355 Capitalized catalog costs 23,337 22,194 Vendor deposits 23,227 19,610 Prepaid expenses 19,309 31,502 Tenant allowance receivable 8,686 15,355 Value added tax (VAT) receivable 7,831 4,529 Right of return asset for merchandise 5,990 6,429 Acquisition related escrow deposits — 3,975 Total prepaid expense and other current assets $ 234,247 $ 121,350 (1) Refer to Note 12— Income Taxes . (2) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Variable Interest Entities . Other non-current assets consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Initial direct costs prior to lease commencement $ 41,849 $ 57,087 Landlord assets under construction—net of tenant allowances 37,892 204,013 Capitalized cloud computing costs—net (1) 20,927 14,910 Other deposits 6,889 6,877 Deferred financing fees 3,436 4,123 Other non-current assets 16,513 11,139 Total other non-current assets $ 127,506 $ 298,149 (1) Presented net of accumulated amortization of $8.8 million and $4.0 million as of October 29, 2022 and January 29, 2022, respectively. |
Goodwill, Tradenames, Trademark
Goodwill, Tradenames, Trademarks and Other Intangible Assets | 9 Months Ended |
Oct. 29, 2022 | |
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 (refer to Note 17— Segment Reporting FOREIGN JANUARY 29, CURRENCY OCTOBER 29, 2022 ADDITIONS TRANSLATION 2022 (in thousands) RH Segment Goodwill $ 141,100 $ — $ (79) $ 141,021 Tradenames, trademarks and other intangible assets 56,161 1,108 — 57,269 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018. (2) Presented net of an impairment charge of $35 million recognized in prior fiscal years. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Oct. 29, 2022 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | NOTE 5—VARIABLE INTEREST ENTITIES Equity Method Investments Equity method investments represent our 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”) that were formed during fiscal 2020 for the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado. We hold a 50 percent membership interest in two of the Aspen LLCs and a 70 percent interest in the third Aspen LLC. These investments meet the criteria of VIEs, however, we are not the primary beneficiary of these arrangements. As we have the ability to exercise significant influence over the Aspen LLCs, but do not have a controlling financial interest in the Aspen LLCs, we account for these investments using the equity method of accounting. As of October 29, 2022 and January 29, 2022, $8.8 million and $8.4 million, respectively, of promissory notes receivable, inclusive of accrued interest, are outstanding with the managing member or entities affiliated with the managing member for the Aspen LLCs, which promissory notes are included in prepaid expense and other current assets During the three months ended October 29, 2022 and October 30, 2021, we recorded our proportionate share of equity method investments losses of $1.9 million and $2.3 million, respectively, which is included on the condensed consolidated statements of income and a corresponding decrease to the carrying value of equity method investments Consolidated Variable Interest Entities and Noncontrolling Interests In the third quarter of fiscal 2022, we formed two real estate development limited liability companies (each, a “Member LLC” and collectively, the “Member LLCs” or the “consolidated variable interest entities”) for the purpose of acquiring, developing, operating and selling certain real estate projects, one of which is intended to be a future RH Design Gallery. We hold a 50 percent membership interest in each Member LLC, and the remaining 50 percent is held by an affiliate of the managing member of the Aspen LLCs. We have determined that each Member LLC is a VIE and that the power to direct the most significant activities of each Member LLC is shared amongst related parties. We have determined that we are most closely associated with each Member LLC, and, accordingly, consolidate the results of operations, financial condition and cash flows of the Member LLCs in our condensed consolidated financial statements. Noncontrolling interests in the consolidated variable interest entities are measured using the hypothetical liquidation at book value methodology. Noncontrolling interests in consolidated variable interest entities are immaterial as of October 29, 2022. As of October 29, 2022, $27 million of promissory notes receivable, inclusive of accrued interest, are outstanding with the managing member or entities affiliated with the managing member of the Member LLCs, which promissory notes are included in prepaid expense and other current assets Restricted Cash As of October 29, 2022, $3.9 million of restricted cash deposits are held in escrow for one Member LLC, which escrow balances are included in restricted cash Real Estate Loans On August 3, 2022, a Member LLC as the borrower executed a Secured Promissory Note (the “Secured Promissory Note”) with a third-party in an aggregate principal amount equal to $2.0 million with a maturity date of August 1, 2032. The Secured Promissory Note bears interest at a fixed rate per annum equal to 6.00%. In addition, we entered into an immaterial loan with the Member LLC that is eliminated upon consolidation. On September 9, 2022, a Member LLC as the borrower executed a Promissory Note (the “Promissory Note”) with a third-party bank in an aggregate principal amount equal to $16 million with a maturity date of September 9, 2032. The Promissory Note bears interest at a fixed rate per annum equal to 5.37% until September 15, 2027, on which date the interest rate will reset based on the five-year treasury rate plus 2.00%, subject to a total interest rate 3.00% floor. These real estate loans are secured by the assets of each respective Member LLC and the associated creditors do not have recourse against RH’s general assets. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Oct. 29, 2022 | |
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: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Accounts payable $ 180,484 $ 242,035 Accrued compensation 71,825 96,859 Accrued occupancy 33,888 28,088 Accrued freight and duty 22,577 21,888 Accrued sales taxes 21,746 24,811 Accrued interest 11,814 5,185 Accrued professional fees 8,990 5,892 Accrued catalog costs 4,277 4,127 Other accrued expenses 34,364 13,494 Total accounts payable and accrued expenses $ 389,965 $ 442,379 Other current liabilities consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Unredeemed gift card and merchandise credit liability $ 28,304 $ 22,712 Current portion of term loans 25,000 20,000 Allowance for sales returns 24,399 25,256 Finance lease liabilities 16,557 15,511 Current portion of equipment promissory notes 1,691 13,625 Federal and state tax payable (1) — 31,364 Other current liabilities 8,587 18,155 Total other current liabilities $ 104,538 $ 146,623 (1) Refer to Note 12— Income Taxes . 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 October 29, 2022 will be recognized within the next six months as the performance obligations are satisfied. Deferred revenue also includes the unrecognized portion of the annual RH Members Program fee. 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 October 29, 2022 and October 30, 2021, we recognized $5.0 million and $4.4 million, respectively, of revenue related to previous deferrals related to our gift cards. During the nine months ended October 29, 2022 and October 30, 2021, we recognized $16 million and $14 million, respectively, of revenue related to previous deferrals related to our gift cards. We recognize breakage associated with gift cards proportional to actual gift card redemptions. Breakage of $0.7 million and $0.5 million was recorded in net revenues in the three months ended October 29, 2022 and October 30, 2021, respectively. Breakage of $1.8 million and $1.4 million was recorded in net revenues in the nine months ended October 29, 2022 and October 30, 2021, respectively. We expect that approximately 70% of the remaining gift card liabilities will be recognized when the gift cards are redeemed by customers. |
Other Non-Current Obligations
Other Non-Current Obligations | 9 Months Ended |
Oct. 29, 2022 | |
Other Non-Current Obligations. | |
Other Non-Current Obligations | NOTE 7—OTHER NON-CURRENT OBLIGATIONS Other non-current obligations consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Unrecognized tax benefits $ 2,893 $ 3,471 Other non-current obligations 4,258 5,235 Total other non-current obligations $ 7,151 $ 8,706 |
Leases
Leases | 9 Months Ended |
Oct. 29, 2022 | |
Leases | |
Leases | NOTE 8—LEASES Lease costs—net consist of the following: THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Operating lease cost (1) $ 25,153 $ 25,637 $ 75,190 $ 74,794 Finance lease costs Amortization of leased assets (1) 13,964 10,860 38,334 32,574 Interest on lease liabilities (2) 8,564 6,711 23,526 19,468 Variable lease costs (3) 5,681 9,096 22,015 25,436 Sublease income (4) (1,085) (1,189) (3,298) (3,507) Total lease costs—net $ 52,277 $ 51,115 $ 155,767 $ 148,765 (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 2021 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, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $3.4 million and $6.9 million for the three months ended October 29, 2022 and October 30, 2021, respectively, and $15 million and $19 million for the nine months ended October 29, 2022 and October 30, 2021, respectively, as well as charges associated with common area maintenance of $2.3 million and $2.2 million for the three months ended October 29, 2022 and October 30, 2021, respectively, and $6.9 million and $6.6 million for the nine months ended October 29, 2022 and October 30, 2021, 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 presented. (4) Included as an offset to selling, general and administrative expenses on the condensed consolidated statements of income. Lease right-of-use assets and lease liabilities consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 536,452 $ 551,045 Finance leases (1)(2) Property and equipment—net 1,092,787 784,327 Total lease right-of-use assets $ 1,629,239 $ 1,335,372 Liabilities Current (3) Operating leases Operating lease liabilities $ 77,858 $ 73,834 Finance leases Other current liabilities 16,557 15,511 Total lease liabilities—current 94,415 89,345 Non-current Operating leases Non-current operating lease liabilities 521,093 540,513 Finance leases Non-current finance lease liabilities 656,643 560,550 Total lease liabilities—non-current 1,177,736 1,101,063 Total lease liabilities $ 1,272,151 $ 1,190,408 (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 on the condensed consolidated balance sheets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $211 million and $174 million as of October 29, 2022 and January 29, 2022, 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 October 29, 2022: OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL (in thousands) Remainder of fiscal 2022 $ 25,297 $ 12,226 $ 37,523 2023 98,805 49,454 148,259 2024 92,305 49,824 142,129 2025 89,936 51,259 141,195 2026 86,538 52,032 138,570 2027 81,205 53,214 134,419 Thereafter 241,401 963,165 1,204,566 Total lease payments (1)(2) 715,487 1,231,174 1,946,661 Less—imputed interest (3) (116,536) (557,974) (674,510) Present value of lease liabilities $ 598,951 $ 673,200 $ 1,272,151 (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 $640 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of October 29, 2022, of which $5.0 million, $25 million, $36 million, $39 million, $40 million and $38 million will be paid in the remainder of fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025, fiscal 2026 and fiscal 2027, respectively, and $457 million will be paid subsequent to fiscal 2027. (2) Excludes an immaterial amount of future commitments under short-term lease agreements. (3) Calculated using the discount rate for each lease at lease commencement. Supplemental information related to leases consists of the following: NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 Weighted-average remaining lease term (years) Operating leases 8.5 9.3 Finance leases 22.1 20.1 Weighted-average discount rate Operating leases 4.04% 3.84% Finance leases 5.32% 4.97% Other information related to leases consists of the following: NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (75,570) $ (76,957) Operating cash flows from finance leases (23,526) (19,774) Financing cash flows from finance leases—net (1) (6,798) (10,511) Total cash outflows from leases $ (105,894) $ (107,242) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 42,883 $ 151,548 Finance leases 108,547 73,855 (1) Represents the principal portion of lease payments offset by tenant allowances received subsequent to lease commencement. 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 the condensed consolidated balance sheets. Upon construction completion and lease commencement, we performed a sale-leaseback analysis and determined that we could not derecognize the build-to-suit asset. Therefore, the asset remains classified as a build-to-suit asset within property and equipment—net on the condensed consolidated balance sheets and is depreciated over the term of the useful life of the asset. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Oct. 29, 2022 | |
CREDIT FACILITIES | |
Convertible Senior Notes | NOTE 9—CONVERTIBLE SENIOR NOTES In June 2018, we issued in a private offering $300 million principal amount of 0.00% convertible senior notes due 2023 and issued an additional $35 million principal amount in connection with the overallotment option granted to the initial purchasers as part of the offering (collectively, the “2023 Notes”). In September 2019, we issued in a private offering $350 million principal amount of 0.00% convertible senior notes due 2024 (the “2024 Notes” and, together with the 2023 Notes, the “Convertible Senior Notes” or the “Notes”). Refer to Note 12— Convertible Senior Notes Recently Issued Accounting Standards The outstanding balances under the 2023 Notes and 2024 Notes were as follows: OCTOBER 29, JANUARY 29, 2022 2022 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET PRINCIPAL ISSUANCE CARRYING PRINCIPAL ISSUANCE CARRYING AMOUNT COST (1) AMOUNT AMOUNT COST (1) AMOUNT (in thousands) Convertible senior notes due 2023 (2) $ 1,707 $ (5) $ 1,702 $ 74,390 $ (5,999) $ 68,391 Convertible senior notes due 2024 (3) 41,904 (208) 41,696 219,638 (31,577) 188,061 Total convertible senior notes $ 43,611 $ (213) $ 43,398 $ 294,028 $ (37,576) $ 256,452 (1) As of October 29, 2022, the balance includes debt issuance costs inclusive of original issuers’ discount. As of January 29, 2022, the balance includes debt issuance costs inclusive of original issuers’ discount, as well as the previously outstanding equity component that was recombined upon the adoption of ASU 2020-06 in the first quarter of fiscal 2022, which was $5.7 million for the 2023 Notes and $30 million for the 2024 Notes. Refer to Note 2 —Recently Issued Accounting Standards . (2) As of October 29, 2022, the 2023 Notes outstanding are current liabilities and are classified as convertible senior notes due 2023—net. The 2023 Notes outstanding as of January 29, 2022 included a current portion of $9.4 million and a non-current portion of $59 million. (3) As of October 29, 2022, the 2024 Notes outstanding are non-current liabilities and are classified as convertible senior notes due 2024—net. The 2024 Notes outstanding as of January 29, 2022 included a current portion of $3.6 million and a non-current portion of $184 million. 2023 Notes and 2024 Notes—Bond Hedge and Warrant Terminations and Notes Repurchase During the first quarter of fiscal 2022, we entered into agreements with certain financial institutions (collectively, the “Counterparties”) to repurchase all of the warrants issued in connection with the 2023 Notes and 2024 Notes at an aggregate purchase price of $184 million and $203 million, respectively, subject to adjustment for a settlement feature based on pricing formulations linked to the trading price of our common stock over a volume weighted-average price measurement period of two other expense—net During the first quarter of fiscal 2022, we entered into agreements with the Counterparties to terminate all of the convertible note bond hedges issued in connection with the 2023 Notes and 2024 Notes to receive an aggregate closing price of $56 million and $180 million, respectively, subject to adjustment for a settlement feature based on pricing formulations linked to the trading price of our common stock over a three day volume weighted-average price measurement period. Upon entering into these agreements, the bond hedges were reclassified from stockholders’ equity to current assets on the condensed consolidated balance sheets, and accordingly, we recognized a corresponding loss on the fair value adjustment of the settlement feature of $4.3 million, which is classified within other expense—net During the first quarter of fiscal 2022, we entered into individual privately negotiated to repurchase in cash $45 million and other expense—net During the second quarter of fiscal 2022, we entered into additional individual privately negotiated transactions with a limited number of sophisticated investors that were holders of the 2023 Notes and/or the 2024 Notes to repurchase in cash $18 million and $39 million in aggregate principal amount of the 2023 Notes and 2024 Notes, respectively (the “Additional Notes Repurchase”) . The Additional Notes Repurchase provided for an estimated settlement cost of $80 million, subject to adjustment to the final settlement cost for an embedded feature based on pricing formulations linked to the trading price of our common stock over a one day volatility weighted-average price measurement period occurring in July 2022. Upon execution of these agreements, we determined that we had modified the debt substantially and applied an extinguishment accounting model. Accordingly, we derecognized the aggregate principal amount of $57 million of the Convertible Senior Notes related to the extinguishment of such notes, and subsequently recognized a new financing liability with a fair value of $25 million. An embedded derivative related to the conversion feature was bifurcated from the new financing liability and separately recognized with an initial fair value of $55 million. We recognized a loss on extinguishment of debt of $23 million upon the execution of these agreements, inclusive of acceleration of amortization of debt issuance costs of $0.3 million. Upon the remeasurement of the amount owed to the holders in terms of the embedded feature, a total of $82 million was paid in cash to the holders, representing the combined carrying value of the financing liability of $25 million, as well as the fair value of the bifurcated embedded equity derivative upon settlement of $57 million. Accordingly, we recognized a loss on the fair value adjustment of the bifurcated embedded equity derivative of $1.5 million, which is classified within other expense—net on the condensed consolidated statements of income. $350 million 0.00% Convertible Senior Notes due 2024 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 March 31, 2022. However, this condition was not met for the calendar quarter ended June 30, 2022 or September 30, 2022 and, as a result, the 2024 Notes were not convertible as of September 30, 2022. 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. During the nine months ended October 29, 2022, holders of $3.6 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. During the nine months ended October 29, 2022, we paid $3.6 million in cash and delivered 9,760 shares of common stock to settle the early conversion of these 2024 Notes. We also received 9,760 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2024 Notes. The remaining liability for the 2024 Notes is classified as a $335 million 0.00% Convertible Senior Notes due 2023 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 September 30, 2022 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 December 31, 2022. 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. During the nine months ended October 29, 2022, holders of $9.4 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 nine months ended October 29, 2022, we paid $9.4 million in cash and delivered 27,220 shares of common stock to settle the early conversion of these 2023 Notes. We also received 27,208 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, and therefore, on a net basis issued 12 shares of our common stock in respect to such settlement of the converted 2023 Notes. The remaining liability for the 2023 Notes is classified as a current obligation on the condensed consolidated balance sheets since the settlement of the outstanding 2023 Notes is due on June 15, 2023. The settlement of additional early conversions received, if any, will be made, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. |
Credit Facilities
Credit Facilities | 9 Months Ended |
Oct. 29, 2022 | |
CREDIT FACILITIES | |
Credit Facilities | NOTE 10—CREDIT FACILITIES The outstanding balances under our credit facilities were as follows: OCTOBER 29, JANUARY 29, 2022 2022 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET INTEREST OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING RATE (1) AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT (dollars in thousands) Asset based credit facility (2) 4.88% $ — $ — $ — $ — $ — $ — Term loan B (3) 5.62% 1,980,000 (19,299) 1,960,701 1,995,000 (21,797) 1,973,203 Term loan B-2 (4) 6.38% 500,000 (25,604) 474,396 — — — Equipment promissory notes (5) 4.56% 1,691 — 1,691 14,785 (31) 14,754 Total credit facilities $ 2,481,691 $ (44,903) $ 2,436,788 $ 2,009,785 $ (21,828) $ 1,987,957 (1) The interest rates for the asset based credit facility, term loans and equipment promissory note represent the weighted-average interest rates as of October 29, 2022. (2) Deferred financing fees associated with the asset based credit facility as of October 29, 2022 and January 29, 2022 were $3.4 million and $4.1 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, which has a maturity date of July 29, 2026. (3) Represents the outstanding balance of the Term Loan B (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $1,961 million and $20 million were included in term loan B—net and other current liabilities , respectively, on the condensed consolidated balance sheets, respectively, in both periods presented. The maturity date of the Term Loan Credit Agreement is October 20, 2028. (4) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $474 million and $5.0 million were included in term loan B-2—net and other current liabilities , respectively, on the condensed consolidated balance sheets as of October 29, 2022. The maturity date of the Term Loan Credit Agreement is October 20, 2028. (5) Represents total equipment security notes secured by certain of our property and equipment, all of which was included in other current liabilities on the condensed consolidated balance sheets as of October 29, 2022. Asset Based Credit Facility & Term Loan Facilities On August 3, 2011, Restoration Hardware, Inc. (“RHI”), a wholly-owned subsidiary of RH, along with its Canadian subsidiary, Restoration Hardware Canada, Inc., entered into the Ninth Amended and Restated Credit Agreement (as amended prior to June 28, 2017, the “Original Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “ABL Agent”). On June 28, 2017, RHI entered into the Eleventh Amended and Restated Credit Agreement (as amended prior to July 29, 2021, the “11 th On July 29, 2021, RHI entered into the Twelfth Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and the ABL Agent, which amended and restated the 11 th The availability of credit at any given time under the ABL Credit Agreement will be constrained by the terms and conditions of the ABL 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 ABL Credit Agreement. All obligations under the ABL 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) bear interest, at the borrower’s option, at either the base rate or LIBOR subject to a 0.00% LIBOR floor (or, in the case of the Canadian borrowings, the “BA Rate” or the “Canadian Prime Rate”, as such terms are defined in the ABL Credit Agreement, for the Canadian borrowings denominated in Canadian dollars, or the “U.S. Index Rate”, as such term is defined in the ABL Credit Agreement, or LIBOR for Canadian borrowings denominated in United States dollars) plus an applicable interest rate margin, in each case. The ABL Credit Agreement contains customary provisions addressing the transition from LIBOR. The ABL Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on granting certain liens, limitations on making certain loans or investments, limitations on incurring additional debt, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of a similar type and size. The ABL 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 ABL Credit Agreement (the “FCCR Covenant”). The FCCR Covenant only applies in certain limited circumstances, including when the unused availability under the ABL Credit Agreement drops below the greater of (A) $40 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 October 29, 2022, RHI was in compliance with the FCCR Covenant. The ABL 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 ABL Credit Agreement drops below the greater of (A) $40 million and (B) an amount based on 10% of the total borrowing availability at the time. The ABL Credit Agreement contains customary representations and warranties, events of defaults and other customary terms and conditions for an asset based credit facility. The availability of the revolving line of credit at any given time under the ABL Credit Agreement is limited by the terms and conditions of the ABL 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 ABL 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 October 29, 2022, the amount available for borrowing under the revolving line of credit under the ABL Credit Agreement was $578 million, net of $25 million in outstanding letters of credit. Term Loan Credit Agreement On October 20, 2021, RHI entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) by and among RHI as the borrower, the lenders party thereto and Bank of America, N.A. as administrative agent and collateral agent (in such capacities, the “Term Agent”) with respect to an initial term loan (the “Term Loan B”) in an aggregate principal amount equal to $2,000,000,000 with a maturity date of October 20, 2028. The Term Loan B bears interest at an annual rate based on LIBOR subject to a 0.50% LIBOR floor plus an interest rate margin of 2.50% (with a stepdown of the interest rate margin if RHI achieves a specified public corporate family rating). LIBOR is a floating interest rate that resets periodically during the life of the Term Loan B. At the date of borrowing, the interest rate was set at the LIBOR floor of 0.50% plus 2.50% and the Term Loan B was issued at a discount of 0.50% to face value. The Term Loan Credit Agreement contains customary provisions addressing future transition from LIBOR. On May 13, 2022, RHI entered into a 2022 Incremental Amendment (the “2022 Incremental Amendment”) with Bank of America, N.A., as administrative agent, amending the Term Loan Credit Agreement (the Term Loan Credit Agreement as amended by the 2022 Incremental Amendment, the “Amended Term Loan Credit Agreement”). Pursuant to the terms of the 2022 Incremental Amendment, RHI incurred incremental term loans (the “Term Loan B-2”) in an aggregate principal amount equal to $500 million with a maturity date of October 20, 2028. The Term Loan B-2 constitutes a separate class from the Term Loan B under the Term Loan Credit Agreement. The Term Loan B-2 bears interest at an annual rate based on the SOFR subject to a 0.50% SOFR floor plus an interest rate margin of 3.25% plus a credit spread adjustment of 0.10%. Other than the terms relating to the Term Loan B-2, the terms of the Amended Term Loan Credit Agreement remain substantially the same as the terms of the existing Term Loan Credit Agreement, including representations and warranties, covenants and events of default. All obligations under the Term Loan B are guaranteed by certain domestic subsidiaries of RHI. Further, RHI and such subsidiaries have granted a security interest in substantially all of their assets (subject to customary and other exceptions) to secure the Term Loan B. Substantially all of the collateral securing the Term Loan B also secures the loans and other credit extensions under the ABL Credit Agreement. On October 20, 2021, in connection with the Term Loan Credit Agreement, RHI and certain other subsidiaries of RH party to the Term Loan Credit Agreement and the ABL Credit Agreement, as the case may be, entered into an Intercreditor Agreement (the “Intercreditor Agreement”) with the Term Agent and the ABL Agent. The Intercreditor Agreement establishes various customary inter-lender terms, including, without limitation, with respect to priority of liens, permitted actions by each party, application of proceeds, exercise of remedies in case of default, releases of liens and certain limitations on the amendment of the ABL Credit Agreement and the Term Loan Credit Agreement without the consent of the other parties. The borrowings under the Term Loan Credit Agreement may be prepaid in whole or in part at any time, subject to a prepayment premium of 1.0% in connection with any repricing transaction within the six months following the closing date of the Term Loan Credit Agreement. The Term Loan Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on granting certain liens, limitations on making certain loans or investments, limitations on incurring additional debt, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of a similar type and size, but provides for unlimited exceptions in the case of incurring indebtedness, granting of liens and making investments, dividend payments, and payments of material junior indebtedness, subject to satisfying specified leverage ratio tests. The Term Loan Credit Agreement does not contain a financial maintenance covenant. The Term Loan Credit Agreement contains customary representations and warranties, events of defaults and other customary terms and conditions for a term loan credit agreement. Equipment Loan Facility On September 5, 2017, RHI entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC (“BAL”) pursuant to which BAL and RHI 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 varied, but generally had a maturity of three |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Oct. 29, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 11—FAIR VALUE MEASUREMENTS Fair Value Measurements—Recurring Amounts reported as cash and equivalents, receivables, and accounts payable and accrued expenses approximate fair value due to the short-term nature of activity within these accounts. The estimated fair value of the asset based credit facility approximates cost as the interest rate associated with the facility is variable and resets frequently (Level 2). The estimated fair value of the real estate loans approximate their carrying values as they were recently issued. The estimated fair value and carrying value of the 2023 Notes and 2024 Notes and the Term Loan Credit Agreement were as follows: OCTOBER 29, JANUARY 29, 2022 2022 PRINCIPAL PRINCIPAL FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) (in thousands) Convertible senior notes due 2023 $ 1,632 $ 1,707 $ 70,857 $ 68,706 Convertible senior notes due 2024 36,499 41,904 198,087 189,297 Term loan B 1,961,700 1,980,000 1,995,000 1,995,000 Term loan B-2 499,044 500,000 — — (1) The carrying value of the convertible senior notes as of October 29, 2022 represents the principal amount of the 2023 Notes and 2024 Notes following our adoption of ASU 2020-06 in the first quarter of fiscal 2022 (refer to Note 2— Recently Issued Accounting Standards ). The carrying value as of January 29, 2022 represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity , which was required prior to the adoption of ASU 2020-06. The carrying value in both periods excludes the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. The carrying values of the Term Loan B and Term Loan B-2 represent the outstanding amount under each class excluding discounts upon original issuance and third party offering costs. 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 stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2). The estimated fair values of the Term Loan B and Term Loan B-2 were derived from discounted cash flows using risk-adjusted rates (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. 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 Prior to the adoption of ASU 2020-06 and through fiscal 2021, upon settlement of our convertible senior notes, including the settlements in which holders of the 2023 Notes and 2024 Notes elected to exercise the early conversion option, we recognized a gain or loss on extinguishment of debt in the condensed consolidated statements of income, which represented the difference between the carrying value and fair value of the convertible senior notes immediately prior to the settlement date. The fair value of each of the 2023 Notes and 2024 Notes related to the settlement of the early conversions 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). |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 29, 2022 | |
Income Taxes | |
Income Taxes | NOTE 12—INCOME TAXES We recorded income tax expense of $36 million and $54 million in the three months ended October 29, 2022 and October 30, 2021, respectively. We recorded an income tax benefit of $71 million and income tax expense of $99 million in the nine months ended October 29, 2022 and October 30, 2021, respectively. The effective tax rate was 26.8% and 22.8% in the three months ended October 29, 2022 and October 30, 2021, respectively. The effective tax rate was (20.2)% and 15.5% in the nine months ended October 29, 2022 and October 30, 2021, respectively. The increase in our effective tax rate for the three months ended October 29, 2022 as compared to the three months ended October 30, 2021 is primarily attributable to significantly lower net excess tax benefits from stock-based compensation in the three months ended October 29, 2022. The decrease in our effective tax rate for the nine months ended October 29, 2022 as compared to the nine months ended October 30, 2021 is primarily attributable to significantly higher net excess tax benefits from stock-based compensation in the nine months ended October 29, 2022. As of October 29, 2022, we had $8.2 million of unrecognized tax benefits, of which $7.6 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 October 29, 2022, we had $5.5 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months. Inflation Reduction Act On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income” and a one percent excise tax on net repurchases of stock after December 31, 2022. We are continuing to evaluate the Inflation Reduction Act and its requirements, including the application to our business. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Oct. 29, 2022 | |
Net Income Per Share | |
Net Income Per Share | NOTE 13—NET INCOME PER SHARE The calculation of our net income per share is as follows: THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Net income $ 98,760 $ 184,099 $ 421,746 $ 541,501 Loss on extinguishment of debt — 169,578 Net income available to common stockholders (1) $ 98,760 $ 591,324 Weighted-average shares—basic 23,681,482 21,430,557 23,588,464 21,200,146 Effect of dilutive stock-based awards 2,209,736 6,462,775 2,943,274 6,645,663 Effect of dilutive convertible senior notes (2) 207,047 3,397,747 724,173 3,647,587 Weighted-average shares—diluted 26,098,265 31,291,079 27,255,911 31,493,396 Basic net income per share $ 4.17 $ 8.59 $ 25.07 $ 25.54 Diluted net income per share $ 3.78 $ 5.88 $ 21.70 $ 17.19 (1) Effective the first quarter of fiscal 2022 upon adoption of ASU 2020-06, the loss on extinguishment of debt related to convertible securities is added back to net income to calculate net income per share. (2) We adopted ASU 2020-06 in the first quarter of fiscal 2022, and the adoption requires the dilutive impact of the 2023 Notes and 2024 Notes for diluted net income per share purposes to be determined under the if-converted method which assumes share settlement of the entire convertible debt instrument. Prior to adoption of ASU 2020-06, we applied the treasury stock method to determine the dilutive impact of the 2023 Notes and 2024 Notes for diluted net income per share purposes. The 2023 Notes and the 2024 Notes have an impact on our dilutive share count beginning at stock prices of $193.65 per share and $211.40 per share, respectively. The warrants associated with the 2023 Notes and 2024 Notes had an impact on our dilutive share count beginning at stock prices of $309.84 per share and $338.24 per share, respectively. The warrants associated with the 2023 Notes and 2024 Notes were repurchased in April 2022 and, as a result, no warrant instruments are outstanding as of October 29, 2022. Accordingly, the warrants have no impact on our dilutive shares post-repurchase. Refer to Note 9— Convertible Senior Notes . The following number of options and restricted stock units were excluded from the calculation of diluted net income per share because their inclusion would have been anti-dilutive: THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 Options 1,084,920 121,587 1,083,745 86,474 Restricted stock units 19,310 — 19,443 — Total anti-dilutive stock-based awards 1,104,230 121,587 1,103,188 86,474 |
Share Repurchase Program and Sh
Share Repurchase Program and Share Retirement | 9 Months Ended |
Oct. 29, 2022 | |
Share Repurchase Program and Share Retirement | |
Share Repurchase Program and Share Retirement | NOTE 14—SHARE REPURCHASE PROGRAM AND SHARE RETIREMENT Share Repurchase Program In 2018, our Board of Directors authorized a share repurchase program. On June 2, 2022, the Board of Directors authorized an additional $2.0 billion for the purchase of shares of our outstanding common stock, increasing the total authorized size of the share repurchase program to $2,450 million (the “Share Repurchase Program”). During the nine months ended October 29, 2022, we repurchased 1,127,557 shares of our common stock under the Share Repurchase Program at an average price of $254.02 per share, for an aggregate repurchase amount of approximately $286 million. As of October 29, 2022, $2,164 million remains available for future share repurchases under this program. Share Retirement During the nine months ended October 29, 2022, we retired 1,127,557 shares of common stock related to shares we repurchased under the Share Repurchase Program. As a result of this retirement, we reclassified a total of $286 million from treasury stock additional paid-in capital |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Oct. 29, 2022 | |
Stock-Based Compensation. | |
Stock-Based Compensation | NOTE 15—STOCK-BASED COMPENSATION We recorded stock-based compensation expense of $10 million and $12 million during the three months ended October 29, 2022 and October 30, 2021, respectively, which is included in selling, general and administrative expenses 2012 Stock Incentive Plan and 2012 Stock Option Plan The Restoration Hardware 2012 Stock Incentive Plan (the “Stock Incentive Plan”) was adopted on November 1, 2012. The Stock Incentive Plan provides for the grant of incentive stock options to our employees, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants. The Restoration Hardware 2012 Stock Option Plan (the “Option Plan”) was adopted on November 1, 2012 and on such date 6,829,041 fully vested options were granted under this plan to certain of our employees and advisors. Aside from these options granted on November 1, 2012, no other awards were granted under the Option Plan. As of January 29, 2022, there were a total of 1,185,322 shares issuable under the Stock Incentive Plan. On January 31, 2022, an additional 430,139 shares became issuable under the Stock Incentive Plan in accordance with the Stock Incentive Plan evergreen provision, increasing the total number of shares issuable under the Stock Incentive Plan to 1,615,461. Awards under the plans reduce the number of shares available for future issuance. Cancellations and forfeitures of awards previously granted under the Stock Incentive Plan increase the number of shares available for future issuance. Cancellations and forfeitures of awards previously granted under the Option Plan are immediately retired and are no longer available for future issuance. On October 31, 2022, both the Stock Incentive Plan and Option Plan expired. Upon expiration of the Stock Incentive Plan, a total of 1,607,508 shares that were available for future issuance under the plan were cancelled and are no longer available for the grant of awards under the plan. Information about stock options outstanding, vested or expected to vest, and exercisable as of October 29, 2022 is as follows: OPTIONS OUTSTANDING OPTIONS EXERCISABLE WEIGHTED- AVERAGE WEIGHTED- WEIGHTED- REMAINING AVERAGE AVERAGE NUMBER OF CONTRACTUAL EXERCISE NUMBER OF EXERCISE RANGE OF EXERCISE PRICES OPTIONS LIFE (IN YEARS) PRICE OPTIONS PRICE $25.39 — $45.82 276,530 3.53 $ 35.63 276,530 $ 35.63 $50.00 — $50.00 1,000,000 4.51 50.00 1,000,000 50.00 $53.47 — $61.30 197,830 1.56 61.19 197,830 61.19 $75.43 — $75.43 1,000,000 0.67 75.43 1,000,000 75.43 $87.31 — $154.82 798,216 6.80 132.81 226,266 123.03 $156.40 — $380.53 373,480 8.19 280.31 66,885 270.24 $385.30 — $716.75 827,250 8.05 419.05 713,330 389.36 Total 4,473,306 $ 157.54 3,480,841 $ 135.32 Vested or expected to vest 4,247,547 $ 152.62 The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of October 29, 2022 was $588 million, $574 million, and $517 million, respectively. Stock options exercisable as of October 29, 2022 had a weighted-average remaining contractual life of 4.03 years. As of October 29, 2022, the total unrecognized compensation expense related to unvested options was $91 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 4.39 years. In addition, as of October 29, 2022, the total unrecognized compensation expense related to a fully vested option grant made to Mr. Friedman in October 2020 was $19 million, which will be recognized on an accelerated basis through May 2025 (refer to Chairman and Chief Executive Officer Option Grant As of October 29, 2022, we had 24,390 restricted stock units outstanding with a weighted-average grant date fair value of $437.37 per share. During the three months ended October 29, 2022, 1,780 restricted stock units vested with a weighted-average grant date fair value of $49.53 per share. During the nine months ended October 29, 2022, 4,700 restricted stock units vested with a weighted-average grant date fair value of $117.94 per share. As of October 29, 2022, there was $7.7 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 4.49 years. 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. Refer to Note 18— Stock-Based Compensation |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 29, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 16—COMMITMENTS AND CONTINGENCIES Commitments We had no material off balance sheet commitments as of October 29, 2022. Contingencies We are subject to contingencies, including in connection with lawsuits, claims, investigations and other legal proceedings incident to the ordinary course of our business. These disputes are increasing in number as we expand our business and provide new product and service offerings, such as restaurants and hospitality, and as we enter new markets and legal jurisdictions and face increased complexity related to compliance and regulatory requirements. In addition, we are subject to governmental and regulatory examinations, information requests, and investigations from time to time at the state and federal levels. With respect to such matters and others, 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. 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 the condensed consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty. Certain legal proceedings that we currently face involve various class-action allegations regarding employment practices, including under state wage-and-hour laws. We have faced similar litigation in the past. Due to the inherent difficulty of predicting the course of legal actions related to these class-action allegations, such as the eventual scope, duration or outcome, we are unable to estimate the amount or range of any potential loss that could result from an unfavorable outcome arising from such matters. Although we are self-insured or maintain deductibles in the United States for workers’ compensation, general liability and product liability up to predetermined amounts, above which third party insurance applies, depending on the facts and circumstances of the underlying claims, coverage under our insurance policies may not be available. Even if we believe coverage does apply under our insurance programs, our insurance carriers may dispute coverage based on the underlying facts and circumstances. As a result, the outcome of any 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, result in the diversion of significant operational resources, and require changes to our business operations, policies and practices. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Oct. 29, 2022 | |
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. 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, including hospitality, websites, Source Books, and the Trade and Contract channel. The Real Estate segment represents operations associated with our equity method investments and certain of our consolidated variable interest entities that are non-wholly owned subsidiaries and have operations that are not directly related to RH’s operations (refer to Note 5— Variable Interest Entities 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. Segment Information We use operating income to evaluate segment profitability for the retail operating segments and to allocate resources. Operating income is defined as net income before interest expense—net, loss on extinguishment of debt, other expense—net, income tax expense (benefit) and our share of equity method investments losses. Segment operating income excludes (i) asset impairments, (ii) the amortization of the non-cash compensation charge related to the fully vested option grant made to Mr. Friedman in October 2020, (iii) employer payroll tax expense related to the option exercise by Mr. Friedman, (iv) professional fees related to the 2023 Notes and 2024 Notes transactions (refer to Note 9— Convertible Senior Notes The following table presents segment operating income and income before income taxes: THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Operating income: RH Segment $ 173,162 $ 276,091 $ 639,219 $ 721,343 Waterworks 7,187 2,619 22,394 14,274 Asset impairments (10,926) — (19,080) (7,354) Non-cash compensation (4,136) (5,831) (14,315) (17,559) Employer payroll taxes on option exercise — — (11,717) — Professional fees — — (7,469) — Compensation settlements — — (3,483) — Recall accrual — (340) (560) (840) Legal settlement 4,188 — 4,188 — Gain on sale of building and land 775 — 775 — Reorganization related costs — — — (449) Income from operations 170,250 272,539 609,952 709,415 Interest expense—net 31,417 13,223 78,536 40,112 Loss on extinguishment of debt — 18,513 169,578 21,784 Other expense—net 1,989 — 4,841 — Income before income taxes $ 136,844 $ 240,803 $ 356,997 $ 647,519 The following tables present the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting THREE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL (in thousands) Net revenues $ 821,260 $ 47,806 $ 869,066 $ 964,859 $ 41,569 $ 1,006,428 Gross profit 394,947 25,831 420,778 484,363 20,891 505,254 Depreciation and amortization 26,785 1,247 28,032 23,878 941 24,819 NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL (in thousands) Net revenues $ 2,670,390 $ 147,588 $ 2,817,978 $ 2,732,300 $ 123,779 $ 2,856,079 Gross profit 1,362,843 79,736 1,442,579 1,337,983 61,924 1,399,907 Depreciation and amortization 75,980 3,780 79,760 68,042 3,333 71,375 The statements of income metrics for the Real Estate segment were immaterial in the three and nine months ended October 29, 2022 and, therefore, such results are presented within the RH Segment for the respective periods. In the three months ended October 29, 2022 and October 30, 2021, the Real Estate segment share of equity method investments losses were $1.9 million and $2.3 million, respectively, and were $6.1 million and $6.9 million in the nine months ended October 29, 2022 and October 30, 2021, respectively. For both the three and nine months ended October 29, 2022, our share of equity method investments for the Waterworks segment was immaterial. The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting OCTOBER 29, JANUARY 29, 2022 2022 RH SEGMENT WATERWORKS REAL ESTATE TOTAL RH SEGMENT WATERWORKS REAL ESTATE TOTAL (in thousands) Goodwill (1) $ 141,021 $ — $ — $ 141,021 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 57,269 17,000 — 74,269 56,161 17,000 — 73,161 Equity method investments — 539 96,466 97,005 — — 100,810 100,810 Total assets 5,573,649 207,153 102,913 5,883,715 5,259,719 179,941 100,810 5,540,470 (1) The Waterworks reporting unit goodwill of $51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018. (2) Presented net of an impairment charge of $35 million recognized in prior fiscal years. 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, as well as our hospitality operations. Net revenues in each category were as follows: THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Furniture $ 597,520 $ 706,750 $ 1,959,760 $ 1,986,490 Non-furniture 271,546 299,678 858,218 869,589 Total net revenues $ 869,066 $ 1,006,428 $ 2,817,978 $ 2,856,079 We are domiciled in the United States and primarily operate our retail locations and outlets in the United States. As of October 29, 2022, we operated 4 retail locations and 2 outlets in Canada, and 1 retail location in the U.K. Geographic 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 10% or more of our consolidated net revenues in any fiscal period presented. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 29, 2022 | |
Subsequent Events | |
Subsequent Events | NOTE 18—SUBSEQUENT EVENTS In December 2022, we entered into investments in VIEs with an affiliate of the managing member of the Aspen LLCs. We converted $27 million of promissory notes receivable and accrued interest as of October 29, 2022 into an equity contribution of one of the limited liability companies (“LLC”) to acquire 50 percent of the membership interests in the LLC. Additionally, we entered into four separate LLCs by which we contributed three owned properties in certain domestic locations, each for a 50 percent membership interest in the respective LLC, as well as one owned property in the United Kingdom. Due to the close proximity of the acquisition date to the filing date of our Quarterly Report on Form 10-Q for the quarterly period ended October 29, 2022, the accounting for these recently completed VIEs is incomplete. Such information will be included in our Annual Report on Form 10-K for the year ending January 28, 2023. |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Oct. 29, 2022 | |
The Company | |
Nature of Business | Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” “our” or the “Company”), is a leading retailer and luxury lifestyle brand operating primarily in the home furnishings market. Our curated and fully integrated assortments are presented consistently across our sales channels, including our retail locations, websites and Source Books. We offer merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby, child and teen furnishings. As of October 29, 2022, we operated a total of 67 RH Galleries and 39 RH Outlet stores in 31 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. In September 2022, we opened our first RH Guesthouse in New York. |
Macro-Economic Factors and COVID-19 Pandemic | Macro-Economic Factors and COVID-19 Pandemic There are a number of macro-economic factors and uncertainties affecting the overall business climate as well as our business, including increased inflation and rising interest rates. These factors may have a number of adverse effects on macro-economic conditions and markets in which we operate, with the potential for an economic recession and a sustained downturn in the housing market. Factors such as a slowdown in the housing market or negative trends in stock market prices could have a negative impact on demand for our products. We believe that these macro-economic factors have contributed to the slowdown in demand that we have experienced in our business over the last several fiscal quarters. The COVID-19 pandemic continues to cause challenges in certain aspects of our business operations primarily related to our supply chain, including delays in our receipt of products from vendors, which have affected our ability to convert demand into revenues at normal historic rates. While our performance during the pandemic demonstrates the desirability of our exclusive products, consumer spending have shifted away from spending on the home and home-related categories toward travel and leisure and other areas. Our decisions regarding the sources and uses of capital will continue to reflect and adapt to changes in market conditions and our business including further developments with respect to macro-economic factors and the pandemic. Refer to the section entitled “Risk Factors” in our 2021 Form 10-K. |
Recently Issued Accounting Standards | New Accounting Standards or Updates Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Reference Rate Reform | Reference Rate Reform In March 2020, the FASB issued ASU 2020-04 — Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2021-01—Reference Rate Reform (Topic 848): Scope — Credit Facilities |
Recently Issued Accounting St_2
Recently Issued Accounting Standards (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Recently Issued Accounting Standards | |
Cumulative effect of the adoption on our opening fiscal 2022 condensed consolidated balance sheets | ASU 2020-06 JANUARY 29, ADOPTION JANUARY 29, 2022 ADJUSTMENTS 2022 (in thousands) Assets Property and equipment—net $ 1,227,920 $ (12,385) $ 1,215,535 Deferred tax assets 56,843 11,909 68,752 Liabilities Convertible senior notes due 2023—net 59,002 5,684 64,686 Convertible senior notes due 2024—net 184,461 30,341 214,802 Equity Additional paid-in capital 620,577 (56,390) 564,187 Retained earnings 551,108 19,889 570,997 |
Prepaid Expense and Other Ass_2
Prepaid Expense and Other Assets (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Federal and state tax receivable (1) $ 82,310 $ — Promissory notes receivable, including interest (2) 35,463 8,401 Other current assets 28,094 9,355 Capitalized catalog costs 23,337 22,194 Vendor deposits 23,227 19,610 Prepaid expenses 19,309 31,502 Tenant allowance receivable 8,686 15,355 Value added tax (VAT) receivable 7,831 4,529 Right of return asset for merchandise 5,990 6,429 Acquisition related escrow deposits — 3,975 Total prepaid expense and other current assets $ 234,247 $ 121,350 (1) Refer to Note 12— Income Taxes . (2) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Variable Interest Entities . |
Schedule of Other Non-Current Assets | Other non-current assets consist of the following: OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Initial direct costs prior to lease commencement $ 41,849 $ 57,087 Landlord assets under construction—net of tenant allowances 37,892 204,013 Capitalized cloud computing costs—net (1) 20,927 14,910 Other deposits 6,889 6,877 Deferred financing fees 3,436 4,123 Other non-current assets 16,513 11,139 Total other non-current assets $ 127,506 $ 298,149 (1) Presented net of accumulated amortization of $8.8 million and $4.0 million as of October 29, 2022 and January 29, 2022, respectively. |
Goodwill, Tradenames, Tradema_2
Goodwill, Tradenames, Trademarks and Other Intangible Assets (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
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 (refer to Note 17— Segment Reporting FOREIGN JANUARY 29, CURRENCY OCTOBER 29, 2022 ADDITIONS TRANSLATION 2022 (in thousands) RH Segment Goodwill $ 141,100 $ — $ (79) $ 141,021 Tradenames, trademarks and other intangible assets 56,161 1,108 — 57,269 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018. (2) Presented net of an impairment charge of $35 million recognized in prior fiscal years. |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Schedule of Other Current Liabilities | OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Unredeemed gift card and merchandise credit liability $ 28,304 $ 22,712 Current portion of term loans 25,000 20,000 Allowance for sales returns 24,399 25,256 Finance lease liabilities 16,557 15,511 Current portion of equipment promissory notes 1,691 13,625 Federal and state tax payable (1) — 31,364 Other current liabilities 8,587 18,155 Total other current liabilities $ 104,538 $ 146,623 (1) Refer to Note 12— Income Taxes . |
Other Non-Current Obligations (
Other Non-Current Obligations (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Other Non-Current Obligations. | |
Schedule of Other Non-Current Obligations | OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Unrecognized tax benefits $ 2,893 $ 3,471 Other non-current obligations 4,258 5,235 Total other non-current obligations $ 7,151 $ 8,706 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Leases | |
Summary of Lease Costs-Net | THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Operating lease cost (1) $ 25,153 $ 25,637 $ 75,190 $ 74,794 Finance lease costs Amortization of leased assets (1) 13,964 10,860 38,334 32,574 Interest on lease liabilities (2) 8,564 6,711 23,526 19,468 Variable lease costs (3) 5,681 9,096 22,015 25,436 Sublease income (4) (1,085) (1,189) (3,298) (3,507) Total lease costs—net $ 52,277 $ 51,115 $ 155,767 $ 148,765 (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 2021 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, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $3.4 million and $6.9 million for the three months ended October 29, 2022 and October 30, 2021, respectively, and $15 million and $19 million for the nine months ended October 29, 2022 and October 30, 2021, respectively, as well as charges associated with common area maintenance of $2.3 million and $2.2 million for the three months ended October 29, 2022 and October 30, 2021, respectively, and $6.9 million and $6.6 million for the nine months ended October 29, 2022 and October 30, 2021, 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 presented. (4) Included as an offset to selling, general and administrative expenses on the condensed consolidated statements of income. |
Summary of Lease Right-of-use Assets and Lease Liabilities | OCTOBER 29, JANUARY 29, 2022 2022 (in thousands) Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 536,452 $ 551,045 Finance leases (1)(2) Property and equipment—net 1,092,787 784,327 Total lease right-of-use assets $ 1,629,239 $ 1,335,372 Liabilities Current (3) Operating leases Operating lease liabilities $ 77,858 $ 73,834 Finance leases Other current liabilities 16,557 15,511 Total lease liabilities—current 94,415 89,345 Non-current Operating leases Non-current operating lease liabilities 521,093 540,513 Finance leases Non-current finance lease liabilities 656,643 560,550 Total lease liabilities—non-current 1,177,736 1,101,063 Total lease liabilities $ 1,272,151 $ 1,190,408 (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 on the condensed consolidated balance sheets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $211 million and $174 million as of October 29, 2022 and January 29, 2022, 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 October 29, 2022: OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL (in thousands) Remainder of fiscal 2022 $ 25,297 $ 12,226 $ 37,523 2023 98,805 49,454 148,259 2024 92,305 49,824 142,129 2025 89,936 51,259 141,195 2026 86,538 52,032 138,570 2027 81,205 53,214 134,419 Thereafter 241,401 963,165 1,204,566 Total lease payments (1)(2) 715,487 1,231,174 1,946,661 Less—imputed interest (3) (116,536) (557,974) (674,510) Present value of lease liabilities $ 598,951 $ 673,200 $ 1,272,151 (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 $640 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of October 29, 2022, of which $5.0 million, $25 million, $36 million, $39 million, $40 million and $38 million will be paid in the remainder of fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025, fiscal 2026 and fiscal 2027, respectively, and $457 million will be paid subsequent to fiscal 2027. (2) Excludes an immaterial amount of future commitments under short-term lease agreements. (3) Calculated using the discount rate for each lease at lease commencement. |
Summary of Supplemental Information Related to Leases | NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 Weighted-average remaining lease term (years) Operating leases 8.5 9.3 Finance leases 22.1 20.1 Weighted-average discount rate Operating leases 4.04% 3.84% Finance leases 5.32% 4.97% |
Summary of Other Information Related to Leases | NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 (in thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (75,570) $ (76,957) Operating cash flows from finance leases (23,526) (19,774) Financing cash flows from finance leases—net (1) (6,798) (10,511) Total cash outflows from leases $ (105,894) $ (107,242) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 42,883 $ 151,548 Finance leases 108,547 73,855 (1) Represents the principal portion of lease payments offset by tenant allowances received subsequent to lease commencement. |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
CREDIT FACILITIES | |
Outstanding balances under our 2023 Notes and 2024 Notes | OCTOBER 29, JANUARY 29, 2022 2022 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET PRINCIPAL ISSUANCE CARRYING PRINCIPAL ISSUANCE CARRYING AMOUNT COST (1) AMOUNT AMOUNT COST (1) AMOUNT (in thousands) Convertible senior notes due 2023 (2) $ 1,707 $ (5) $ 1,702 $ 74,390 $ (5,999) $ 68,391 Convertible senior notes due 2024 (3) 41,904 (208) 41,696 219,638 (31,577) 188,061 Total convertible senior notes $ 43,611 $ (213) $ 43,398 $ 294,028 $ (37,576) $ 256,452 (1) As of October 29, 2022, the balance includes debt issuance costs inclusive of original issuers’ discount. As of January 29, 2022, the balance includes debt issuance costs inclusive of original issuers’ discount, as well as the previously outstanding equity component that was recombined upon the adoption of ASU 2020-06 in the first quarter of fiscal 2022, which was $5.7 million for the 2023 Notes and $30 million for the 2024 Notes. Refer to Note 2 —Recently Issued Accounting Standards . (2) As of October 29, 2022, the 2023 Notes outstanding are current liabilities and are classified as convertible senior notes due 2023—net. The 2023 Notes outstanding as of January 29, 2022 included a current portion of $9.4 million and a non-current portion of $59 million. (3) As of October 29, 2022, the 2024 Notes outstanding are non-current liabilities and are classified as convertible senior notes due 2024—net. The 2024 Notes outstanding as of January 29, 2022 included a current portion of $3.6 million and a non-current portion of $184 million. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
CREDIT FACILITIES | |
Schedule of Outstanding Balances Under our Credit Facilities | OCTOBER 29, JANUARY 29, 2022 2022 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET INTEREST OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING RATE (1) AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT (dollars in thousands) Asset based credit facility (2) 4.88% $ — $ — $ — $ — $ — $ — Term loan B (3) 5.62% 1,980,000 (19,299) 1,960,701 1,995,000 (21,797) 1,973,203 Term loan B-2 (4) 6.38% 500,000 (25,604) 474,396 — — — Equipment promissory notes (5) 4.56% 1,691 — 1,691 14,785 (31) 14,754 Total credit facilities $ 2,481,691 $ (44,903) $ 2,436,788 $ 2,009,785 $ (21,828) $ 1,987,957 (1) The interest rates for the asset based credit facility, term loans and equipment promissory note represent the weighted-average interest rates as of October 29, 2022. (2) Deferred financing fees associated with the asset based credit facility as of October 29, 2022 and January 29, 2022 were $3.4 million and $4.1 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, which has a maturity date of July 29, 2026. (3) Represents the outstanding balance of the Term Loan B (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $1,961 million and $20 million were included in term loan B—net and other current liabilities , respectively, on the condensed consolidated balance sheets, respectively, in both periods presented. The maturity date of the Term Loan Credit Agreement is October 20, 2028. (4) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $474 million and $5.0 million were included in term loan B-2—net and other current liabilities , respectively, on the condensed consolidated balance sheets as of October 29, 2022. The maturity date of the Term Loan Credit Agreement is October 20, 2028. (5) Represents total equipment security notes secured by certain of our property and equipment, all of which was included in other current liabilities on the condensed consolidated balance sheets as of October 29, 2022. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Fair Value Measurements | |
Estimated Fair Value and Carrying Value of Notes and Term Loan Credit Agreement | OCTOBER 29, JANUARY 29, 2022 2022 PRINCIPAL PRINCIPAL FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) (in thousands) Convertible senior notes due 2023 $ 1,632 $ 1,707 $ 70,857 $ 68,706 Convertible senior notes due 2024 36,499 41,904 198,087 189,297 Term loan B 1,961,700 1,980,000 1,995,000 1,995,000 Term loan B-2 499,044 500,000 — — (1) The carrying value of the convertible senior notes as of October 29, 2022 represents the principal amount of the 2023 Notes and 2024 Notes following our adoption of ASU 2020-06 in the first quarter of fiscal 2022 (refer to Note 2— Recently Issued Accounting Standards ). The carrying value as of January 29, 2022 represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity , which was required prior to the adoption of ASU 2020-06. The carrying value in both periods excludes the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. The carrying values of the Term Loan B and Term Loan B-2 represent the outstanding amount under each class excluding discounts upon original issuance and third party offering costs. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Net Income Per Share | |
Calculation of our net income per share | THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands, except share and per share amounts) Net income $ 98,760 $ 184,099 $ 421,746 $ 541,501 Loss on extinguishment of debt — 169,578 Net income available to common stockholders (1) $ 98,760 $ 591,324 Weighted-average shares—basic 23,681,482 21,430,557 23,588,464 21,200,146 Effect of dilutive stock-based awards 2,209,736 6,462,775 2,943,274 6,645,663 Effect of dilutive convertible senior notes (2) 207,047 3,397,747 724,173 3,647,587 Weighted-average shares—diluted 26,098,265 31,291,079 27,255,911 31,493,396 Basic net income per share $ 4.17 $ 8.59 $ 25.07 $ 25.54 Diluted net income per share $ 3.78 $ 5.88 $ 21.70 $ 17.19 (1) Effective the first quarter of fiscal 2022 upon adoption of ASU 2020-06, the loss on extinguishment of debt related to convertible securities is added back to net income to calculate net income per share. (2) We adopted ASU 2020-06 in the first quarter of fiscal 2022, and the adoption requires the dilutive impact of the 2023 Notes and 2024 Notes for diluted net income per share purposes to be determined under the if-converted method which assumes share settlement of the entire convertible debt instrument. Prior to adoption of ASU 2020-06, we applied the treasury stock method to determine the dilutive impact of the 2023 Notes and 2024 Notes for diluted net income per share purposes. The 2023 Notes and the 2024 Notes have an impact on our dilutive share count beginning at stock prices of $193.65 per share and $211.40 per share, respectively. The warrants associated with the 2023 Notes and 2024 Notes had an impact on our dilutive share count beginning at stock prices of $309.84 per share and $338.24 per share, respectively. The warrants associated with the 2023 Notes and 2024 Notes were repurchased in April 2022 and, as a result, no warrant instruments are outstanding as of October 29, 2022. Accordingly, the warrants have no impact on our dilutive shares post-repurchase. Refer to Note 9— Convertible Senior Notes . |
Anti-Dilutive Securities Excluded from Diluted Net Income per Share | THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 Options 1,084,920 121,587 1,083,745 86,474 Restricted stock units 19,310 — 19,443 — Total anti-dilutive stock-based awards 1,104,230 121,587 1,103,188 86,474 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Stock-Based Compensation. | |
Stock options outstanding, vested or expected to vest, and exercisable | OPTIONS OUTSTANDING OPTIONS EXERCISABLE WEIGHTED- AVERAGE WEIGHTED- WEIGHTED- REMAINING AVERAGE AVERAGE NUMBER OF CONTRACTUAL EXERCISE NUMBER OF EXERCISE RANGE OF EXERCISE PRICES OPTIONS LIFE (IN YEARS) PRICE OPTIONS PRICE $25.39 — $45.82 276,530 3.53 $ 35.63 276,530 $ 35.63 $50.00 — $50.00 1,000,000 4.51 50.00 1,000,000 50.00 $53.47 — $61.30 197,830 1.56 61.19 197,830 61.19 $75.43 — $75.43 1,000,000 0.67 75.43 1,000,000 75.43 $87.31 — $154.82 798,216 6.80 132.81 226,266 123.03 $156.40 — $380.53 373,480 8.19 280.31 66,885 270.24 $385.30 — $716.75 827,250 8.05 419.05 713,330 389.36 Total 4,473,306 $ 157.54 3,480,841 $ 135.32 Vested or expected to vest 4,247,547 $ 152.62 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Oct. 29, 2022 | |
Segment Reporting | |
Schedule of Segment Operating Income and Income Before Income Taxes | THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Operating income: RH Segment $ 173,162 $ 276,091 $ 639,219 $ 721,343 Waterworks 7,187 2,619 22,394 14,274 Asset impairments (10,926) — (19,080) (7,354) Non-cash compensation (4,136) (5,831) (14,315) (17,559) Employer payroll taxes on option exercise — — (11,717) — Professional fees — — (7,469) — Compensation settlements — — (3,483) — Recall accrual — (340) (560) (840) Legal settlement 4,188 — 4,188 — Gain on sale of building and land 775 — 775 — Reorganization related costs — — — (449) Income from operations 170,250 272,539 609,952 709,415 Interest expense—net 31,417 13,223 78,536 40,112 Loss on extinguishment of debt — 18,513 169,578 21,784 Other expense—net 1,989 — 4,841 — Income before income taxes $ 136,844 $ 240,803 $ 356,997 $ 647,519 |
Summary of Statements of Income Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting | THREE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL (in thousands) Net revenues $ 821,260 $ 47,806 $ 869,066 $ 964,859 $ 41,569 $ 1,006,428 Gross profit 394,947 25,831 420,778 484,363 20,891 505,254 Depreciation and amortization 26,785 1,247 28,032 23,878 941 24,819 NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, 2022 2021 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL (in thousands) Net revenues $ 2,670,390 $ 147,588 $ 2,817,978 $ 2,732,300 $ 123,779 $ 2,856,079 Gross profit 1,362,843 79,736 1,442,579 1,337,983 61,924 1,399,907 Depreciation and amortization 75,980 3,780 79,760 68,042 3,333 71,375 |
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 OCTOBER 29, JANUARY 29, 2022 2022 RH SEGMENT WATERWORKS REAL ESTATE TOTAL RH SEGMENT WATERWORKS REAL ESTATE TOTAL (in thousands) Goodwill (1) $ 141,021 $ — $ — $ 141,021 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 57,269 17,000 — 74,269 56,161 17,000 — 73,161 Equity method investments — 539 96,466 97,005 — — 100,810 100,810 Total assets 5,573,649 207,153 102,913 5,883,715 5,259,719 179,941 100,810 5,540,470 (1) The Waterworks reporting unit goodwill of $51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018. (2) Presented net of an impairment charge of $35 million recognized in prior fiscal years. |
Net Revenues | THREE MONTHS ENDED NINE MONTHS ENDED OCTOBER 29, OCTOBER 30, OCTOBER 29, OCTOBER 30, 2022 2021 2022 2021 (in thousands) Furniture $ 597,520 $ 706,750 $ 1,959,760 $ 1,986,490 Non-furniture 271,546 299,678 858,218 869,589 Total net revenues $ 869,066 $ 1,006,428 $ 2,817,978 $ 2,856,079 |
The Company (Detail)
The Company (Detail) | Oct. 29, 2022 item store state |
The Company | |
Number of galleries | 67 |
Number of RH outlet stores | store | 39 |
Number of states that galleries and stores operate, District of Columbia and Canada | state | 31 |
Number of waterworks showrooms throughout the United States and in the U.K. | 14 |
Recently Issued Accounting St_3
Recently Issued Accounting Standards - Cumulative effect for the adoption of the ASU (Details) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Assets [Abstract] | ||
Property and equipment-net | $ 1,577,900 | $ 1,227,920 |
Deferred tax assets | 63,105 | 56,843 |
Stockholders Equity [Abstract] | ||
Additional paid-in capital | 313,887 | 620,577 |
Retained earnings | 992,743 | 551,108 |
2023 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 59,002 | |
2024 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | $ 41,696 | 184,461 |
ASU 2020-06 | ||
Assets [Abstract] | ||
Property and equipment-net | 1,227,920 | |
Deferred tax assets | 56,843 | |
Stockholders Equity [Abstract] | ||
Additional paid-in capital | 620,577 | |
Retained earnings | 551,108 | |
ASU 2020-06 | 2023 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 59,002 | |
ASU 2020-06 | 2024 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 184,461 | |
ASU 2020-06 | Impact of adoption, adjustment | ||
Assets [Abstract] | ||
Property and equipment-net | (12,385) | |
Deferred tax assets | 11,909 | |
Stockholders Equity [Abstract] | ||
Additional paid-in capital | (56,390) | |
Retained earnings | 19,889 | |
ASU 2020-06 | Impact of adoption, adjustment | 2023 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 5,684 | |
ASU 2020-06 | Impact of adoption, adjustment | 2024 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 30,341 | |
ASU 2020-06 | Cumulative Effect, Period of Adoption, Adjusted Balance | ||
Assets [Abstract] | ||
Property and equipment-net | 1,215,535 | |
Deferred tax assets | 68,752 | |
Stockholders Equity [Abstract] | ||
Additional paid-in capital | 564,187 | |
Retained earnings | 570,997 | |
ASU 2020-06 | Cumulative Effect, Period of Adoption, Adjusted Balance | 2023 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | 64,686 | |
ASU 2020-06 | Cumulative Effect, Period of Adoption, Adjusted Balance | 2024 Notes | ||
Liabilities [Abstract] | ||
Convertible senior notes due-net | $ 214,802 |
Prepaid Expense and Other Ass_3
Prepaid Expense and Other Assets - Prepaid Expense and Other Current Assets (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Prepaid Expense and Other Assets | ||
Federal and state tax receivable | $ 82,310 | |
Promissory notes receivable, including interest | 35,463 | $ 8,401 |
Other current assets | 28,094 | 9,355 |
Capitalized catalog costs | 23,337 | 22,194 |
Vendor deposits | 23,227 | 19,610 |
Prepaid expenses | 19,309 | 31,502 |
Tenant allowance receivable | 8,686 | 15,355 |
Value added tax (VAT) receivable | 7,831 | 4,529 |
Right of return asset for merchandise | 5,990 | 6,429 |
Acquisition related escrow deposits | 3,975 | |
Total prepaid expense and other current assets | $ 234,247 | $ 121,350 |
Prepaid Expense and Other Ass_4
Prepaid Expense and Other Assets - Other Non-Current Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 29, 2022 | Jan. 29, 2022 | |
Other Assets Noncurrent [Abstract] | ||
Initial direct costs prior to lease commencement | $ 41,849 | $ 57,087 |
Landlord assets under construction-net of tenant allowances | 37,892 | 204,013 |
Capitalized cloud computing costs-net | 20,927 | 14,910 |
Other deposits | 6,889 | 6,877 |
Deferred financing fees | 3,436 | 4,123 |
Other non-current assets | 16,513 | 11,139 |
Total other non-current assets | 127,506 | 298,149 |
Accumulated amortization | $ 8,800 | $ 4,000 |
Goodwill, Tradenames, Tradema_3
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Goodwill, Tradenames, Trademarks and Domain Names Activity (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 29, 2022 | Jan. 28, 2017 | |
Goodwill Activity | ||
Goodwill, Beginning balance | $ 141,100 | |
Goodwill, Ending balance | 141,021 | |
Tradenames, trademarks and domain names Activity | ||
Indefinite-lived intangible assets, Beginning balance | 73,161 | |
Indefinite-lived intangible assets, Ending balance | 74,269 | |
RH Segment | ||
Goodwill Activity | ||
Goodwill, Beginning balance | 141,100 | |
Goodwill, Foreign Currency Translation | (79) | |
Goodwill, Ending balance | 141,021 | |
Tradenames, trademarks and domain names Activity | ||
Indefinite-lived intangible assets, Beginning balance | 56,161 | |
Indefinite-lived intangible assets, Ending balance | 57,269 | |
RH Segment | Tradenames, trademarks and other intangible assets | ||
Tradenames, trademarks and domain names Activity | ||
Indefinite-lived intangible assets, Beginning balance | 56,161 | |
Indefinite-lived intangible assets, Additions | 1,108 | |
Indefinite-lived intangible assets, Ending balance | 57,269 | |
Waterworks | ||
Goodwill Activity | ||
Goodwill impairment charge | $ 51,000 | |
Tradenames, trademarks and domain names Activity | ||
Indefinite-lived intangible assets, Beginning balance | 17,000 | |
Tradename impairment | 35,000 | |
Indefinite-lived intangible assets, Ending balance | 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 |
Variable Interest Entities - Eq
Variable Interest Entities - Equity Method Investments (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Oct. 29, 2022 USD ($) | Oct. 30, 2021 USD ($) | Oct. 29, 2022 USD ($) | Oct. 30, 2021 USD ($) | Jan. 29, 2022 USD ($) | Jan. 30, 2021 item | |
Variable Interest Entity [Line Items] | ||||||
Share of equity method investments losses | $ 1,922 | $ 2,313 | $ 6,118 | $ 6,894 | ||
Capital contributions | 2,313 | 4,816 | ||||
Distributions received or undistributed earnings of equity method investments | 0 | 0 | 0 | 0 | ||
Aspen LLCs | ||||||
Variable Interest Entity [Line Items] | ||||||
Joint venture, percentage of ownership | 50% | |||||
Number of privately held limited companies | item | 3 | |||||
Share of equity method investments losses | 1,900 | $ 2,300 | 6,100 | $ 6,900 | ||
Minimum capital contributions required | 100,000 | |||||
Aspen LLCs | Prepaid expenses and other current assets | ||||||
Variable Interest Entity [Line Items] | ||||||
Promissory notes receivable | $ 8,800 | $ 8,800 | $ 8,400 | |||
Third Aspen LLC | ||||||
Variable Interest Entity [Line Items] | ||||||
Joint venture, percentage of ownership | 70% |
Variable Interest Entities - Co
Variable Interest Entities - Consolidated Variable Interest Entities and Noncontrolling Interests (Detail) $ in Millions | 3 Months Ended | ||
Sep. 09, 2022 USD ($) | Oct. 29, 2022 USD ($) entity | Aug. 03, 2022 USD ($) | |
Member LLCs | |||
Variable Interest Entity [Line Items] | |||
Number of consolidated variable interest entities | entity | 2 | ||
Percent of membership interest held, VIEs | 50% | ||
Member LLCs | Prepaid expenses and other current assets | |||
Variable Interest Entity [Line Items] | |||
Promissory notes receivable, including accrued interest | $ 27 | ||
Member LLC | |||
Variable Interest Entity [Line Items] | |||
Restricted cash deposits | $ 3.9 | ||
Member LLC | Secured Promissory Note | |||
Variable Interest Entity [Line Items] | |||
Principal amount | $ 2 | ||
Fixed rate | 6% | ||
Member LLC | Promissory Note | |||
Variable Interest Entity [Line Items] | |||
Principal amount | $ 16 | ||
Fixed rate | 5.37% | ||
Interest rate added to the five-year treasury rate | 2% | ||
Interest rate, floor | 3% | ||
Affiliate of the managing member of the Aspen LLCs | |||
Variable Interest Entity [Line Items] | |||
Percent of membership interest held, VIEs | 50% |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Accounts payable | $ 180,484 | $ 242,035 |
Accrued compensation | 71,825 | 96,859 |
Accrued occupancy | 33,888 | 28,088 |
Accrued freight and duty | 22,577 | 21,888 |
Accrued sales taxes | 21,746 | 24,811 |
Accrued interest | 11,814 | 5,185 |
Accrued professional fees | 8,990 | 5,892 |
Accrued catalog costs | 4,277 | 4,127 |
Other accrued expenses | 34,364 | 13,494 |
Total accounts payable and accrued expenses | $ 389,965 | $ 442,379 |
Accounts Payable, Accrued Exp_4
Accounts Payable, Accrued Expenses and Other Current Liabilities - Other Current Liabilities (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Unredeemed gift card and merchandise credit liability | $ 28,304 | $ 22,712 |
Current portion of term loans | 25,000 | 20,000 |
Allowance for sales returns | 24,399 | 25,256 |
Finance lease liabilities | 16,557 | 15,511 |
Current portion of equipment promissory notes | 1,691 | 13,625 |
Federal and state tax payable | 31,364 | |
Other current liabilities | 8,587 | 18,155 |
Total other current liabilities | $ 104,538 | $ 146,623 |
Accounts Payable, Accrued Exp_5
Accounts Payable, Accrued Expenses and Other Current Liabilities - Contract Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Contract Liabilities | ||||
Revenue, Performance Obligation, Description of Timing | 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 October 29, 2022 will be recognized within the next six months as the performance obligations are satisfied. Deferred revenue also includes the unrecognized portion of the annual RH Members Program fee. 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. | |||
Revenue recognized on membership period | 1 year | |||
Gift card breakage recorded | $ 0.7 | $ 0.5 | $ 1.8 | $ 1.4 |
Percentage of remaining revenue recognized on gift card | 70% | |||
Gift Card and Merchandise Credit [Member] | ||||
Contract Liabilities | ||||
Revenue related to previous deferrals related to gift cards | $ 5 | $ 4.4 | $ 16 | $ 14 |
Other Non-Current Obligations_2
Other Non-Current Obligations (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Other Non-Current Obligations. | ||
Unrecognized tax benefits | $ 2,893 | $ 3,471 |
Other non-current obligations | 4,258 | 5,235 |
Total other non-current obligations | $ 7,151 | $ 8,706 |
Leases - Lease Costs-Net (Detai
Leases - Lease Costs-Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Lease costs-net: | ||||
Operating lease cost | $ 25,153 | $ 25,637 | $ 75,190 | $ 74,794 |
Finance lease costs | ||||
Amortization of leased assets | 13,964 | 10,860 | 38,334 | 32,574 |
Interest on lease liabilities | 8,564 | 6,711 | 23,526 | 19,468 |
Variable lease costs | 5,681 | 9,096 | 22,015 | 25,436 |
Sublease income | (1,085) | (1,189) | (3,298) | (3,507) |
Total lease cost-net | 52,277 | 51,115 | 155,767 | 148,765 |
Variable lease payments | 3,400 | 6,900 | 15,000 | 19,000 |
Common area maintenance | $ 2,300 | $ 2,200 | $ 6,900 | $ 6,600 |
Leases - Lease Right-of-Use Ass
Leases - Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating leases | $ 536,452 | $ 551,045 |
Balance Sheet Classification, Operating lease right-of-use assets | Operating leases | Operating leases |
Finance leases | $ 1,092,787 | $ 784,327 |
Balance Sheet Classification, Property and equipment-net | Property and equipment-net | Property and equipment-net |
Total lease right-of-use assets | $ 1,629,239 | $ 1,335,372 |
Liabilities, Current | ||
Operating leases, current | $ 77,858 | $ 73,834 |
Balance Sheet Classification, Operating lease liabilities | Operating leases, current | Operating leases, current |
Finance leases, current | $ 16,557 | $ 15,511 |
Balance Sheet Classification, Other current liabilities | Other current liabilities | Other current liabilities |
Total lease liabilities-current | $ 94,415 | $ 89,345 |
Liabilities, Non-current | ||
Operating leases, noncurrent | $ 521,093 | $ 540,513 |
Balance Sheet Classification, Non-current operating lease liabilities | Operating leases, noncurrent | Operating leases, noncurrent |
Finance leases, noncurrent | $ 656,643 | $ 560,550 |
Balance Sheet Classification, Non-current finance lease liabilities | Finance leases, noncurrent | Finance leases, noncurrent |
Total lease liabilities-non-current | $ 1,177,736 | $ 1,101,063 |
Total lease liabilities | 1,272,151 | 1,190,408 |
Finance lease right-of-use assets, accumulated amortization | $ 211,000 | $ 174,000 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Jan. 29, 2022 | |
Leases | ||
Remainder of 2022 | $ 5,000 | |
2023 | 25,000 | |
2024 | 36,000 | |
2025 | 39,000 | |
2026 | 40,000 | |
2027 | 38,000 | |
Thereafter | 457,000 | |
Maturities of lease liabilities, Operating Leases | ||
Remainder of fiscal 2022 | 25,297 | |
2023 | 98,805 | |
2024 | 92,305 | |
2025 | 89,936 | |
2026 | 86,538 | |
2027 | 81,205 | |
Thereafter | 241,401 | |
Total lease payments | 715,487 | |
Less-imputed interest | (116,536) | |
Present value of lease liabilities | 598,951 | |
Maturities of lease liabilities, Finance Leases | ||
Remainder of fiscal 2022 | 12,226 | |
2023 | 49,454 | |
2024 | 49,824 | |
2025 | 51,259 | |
2026 | 52,032 | |
2027 | 53,214 | |
Thereafter | 963,165 | |
Total lease payments | 1,231,174 | |
Less-imputed interest | (557,974) | |
Present value of lease liabilities | 673,200 | |
Total maturities of lease liabilities | ||
Remainder of fiscal 2022 | 37,523 | |
2023 | 148,259 | |
2024 | 142,129 | |
2025 | 141,195 | |
2026 | 138,570 | |
2027 | 134,419 | |
Thereafter | 1,204,566 | |
Total lease payments | 1,946,661 | |
Less-imputed interest | (674,510) | |
Present value of lease liabilities | 1,272,151 | $ 1,190,408 |
Legally binding payments for leases signed but not yet commenced | $ 640,000 | |
Short-term lease agreements, commitments | true |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Detail) | Oct. 29, 2022 | Oct. 30, 2021 |
Weighted-average remaining lease term (years) | ||
Operating leases, years | 8 years 6 months | 9 years 3 months 18 days |
Finance leases, years | 22 years 1 month 6 days | 20 years 1 month 6 days |
Weighted-average discount rate | ||
Operating leases, percent | 4.04% | 3.84% |
Finance leases, percent | 5.32% | 4.97% |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Oct. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ (75,570) | $ (76,957) |
Operating cash flows from finance leases | (23,526) | (19,774) |
Financing cash flows from finance leases-net | (6,798) | (10,511) |
Total cash outflows from leases | (105,894) | (107,242) |
Lease right-of-use assets obtained in exchange for lease obligations-net of lease terminations (non-cash) | ||
Operating leases | 42,883 | 151,548 |
Finance leases | $ 108,547 | $ 73,855 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 | Sep. 30, 2019 | Jun. 30, 2018 |
2024 Notes | ||||
Debt Instrument | ||||
Debt instrument, principal amount | $ 350,000 | |||
Debt instrument, interest rate | 0% | |||
2023 Notes | ||||
Debt Instrument | ||||
Debt instrument, principal amount | $ 9,400 | $ 335,000 | ||
Debt instrument, interest rate | 0% | |||
Private Offering | ||||
Debt Instrument | ||||
Debt outstanding | 43,398 | $ 256,452 | ||
Private Offering | 2024 Notes | ||||
Debt Instrument | ||||
Debt instrument, principal amount | $ 350,000 | |||
Debt instrument, interest rate | 0% | |||
Debt outstanding | 41,696 | 188,061 | ||
Private Offering | 2023 Notes | ||||
Debt Instrument | ||||
Debt instrument, principal amount | $ 300,000 | |||
Debt instrument, interest rate | 0% | |||
Debt outstanding | $ 1,702 | $ 68,391 | ||
Overallotment option | 2023 Notes | ||||
Debt Instrument | ||||
Debt outstanding | $ 35,000 |
Convertible Senior Notes - Outs
Convertible Senior Notes - Outstanding Balances under 2023 Notes and 2024 Notes (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Apr. 30, 2022 | Jan. 29, 2022 | Jun. 30, 2018 |
Debt Instrument | ||||
Principal amount | $ 2,481,691 | $ 2,009,785 | ||
Current portion of debt | 1,691 | 13,625 | ||
2023 Notes | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 59,002 | |||
2023 Notes | ASU 2020-06 | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 59,002 | |||
2023 Notes | ASU 2020-06 | Impact of adoption, adjustment | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 5,684 | |||
2024 Notes | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 41,696 | 184,461 | ||
2024 Notes | ASU 2020-06 | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 184,461 | |||
2024 Notes | ASU 2020-06 | Impact of adoption, adjustment | ||||
Debt Instrument | ||||
Convertible senior notes due-net | 30,341 | |||
Private Offering | ||||
Debt Instrument | ||||
Principal amount | 43,611 | 294,028 | ||
Unamortized Debt Issuance Cost | (213) | (37,576) | ||
Net Carrying Amount | 43,398 | 256,452 | ||
Private Offering | 2023 Notes | ||||
Debt Instrument | ||||
Principal amount | 1,707 | 74,390 | ||
Unamortized Debt Issuance Cost | (5) | (5,999) | ||
Net Carrying Amount | 1,702 | 68,391 | ||
Current portion of debt | 9,400 | |||
Non-current portion of debt | 59,000 | |||
Private Offering | 2023 Notes | ASU 2020-06 | Impact of adoption, adjustment | ||||
Debt Instrument | ||||
Convertible senior notes due-net | $ 5,700 | |||
Private Offering | 2024 Notes | ||||
Debt Instrument | ||||
Principal amount | 41,904 | 219,638 | ||
Unamortized Debt Issuance Cost | (208) | (31,577) | ||
Net Carrying Amount | 41,696 | $ 188,061 | ||
Current portion of debt | 3,600 | |||
Non-current portion of debt | $ 184,000 | |||
Private Offering | 2024 Notes | ASU 2020-06 | Impact of adoption, adjustment | ||||
Debt Instrument | ||||
Convertible senior notes due-net | $ 30,000 | |||
Overallotment option | 2023 Notes | ||||
Debt Instrument | ||||
Net Carrying Amount | $ 35,000 |
Convertible Senior Notes - Bond
Convertible Senior Notes - Bond Hedge and Warrant Terminations and Notes Repurchases (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Jul. 30, 2022 | Apr. 30, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Jan. 29, 2022 | Sep. 30, 2019 | Jun. 30, 2018 | |
Debt Instrument | ||||||||
Repayments of convertible senior notes | $ (13,053,000) | $ (235,126,000) | ||||||
Loss on extinguishment of debt | $ 18,513,000 | 169,578,000 | $ 21,784,000 | |||||
Payments for termination of common stock warrants | $ 391,000,000 | 390,934,000 | ||||||
Aggregate principal amount of notes derecognized | (261,988,000) | |||||||
Estimated settlement cost | 405,577,000 | |||||||
Cash received for the termination of the bond hedges | $ 232,000,000 | 231,796,000 | ||||||
Outstanding Amount | 2,481,691,000 | $ 2,009,785,000 | ||||||
2023 and 2024 Notes | Convertible note bond hedges | ||||||||
Debt Instrument | ||||||||
Trading days used to determine the conversion value | 3 days | |||||||
2023 and 2024 Notes | Convertible note bond hedges | Other expense-net | ||||||||
Debt Instrument | ||||||||
Net loss on the fair value adjustment of the settlement feature | $ 4,300,000 | |||||||
2023 Notes | ||||||||
Debt Instrument | ||||||||
Repayments of convertible senior notes | (9,400,000) | |||||||
Debt instrument, principal amount | 9,400,000 | $ 335,000,000 | ||||||
2023 Notes | Convertible note bond hedges | ||||||||
Debt Instrument | ||||||||
Aggregate closing price received | 56,000,000 | |||||||
2024 Notes | ||||||||
Debt Instrument | ||||||||
Repayments of convertible senior notes | (3,600,000) | |||||||
Debt instrument, principal amount | $ 350,000,000 | |||||||
2024 Notes | Convertible note bond hedges | ||||||||
Debt Instrument | ||||||||
Aggregate closing price received | $ 180,000,000 | |||||||
Private Offering | ||||||||
Debt Instrument | ||||||||
Outstanding Amount | 43,611,000 | 294,028,000 | ||||||
Private Offering | 2023 Notes | ||||||||
Debt Instrument | ||||||||
Debt instrument, principal amount | $ 300,000,000 | |||||||
Outstanding Amount | 1,707,000 | 74,390,000 | ||||||
Private Offering | 2024 Notes | ||||||||
Debt Instrument | ||||||||
Debt instrument, principal amount | $ 350,000,000 | |||||||
Outstanding Amount | 41,904,000 | $ 219,638,000 | ||||||
Private Offering | Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Trading days used to determine the conversion value | 5 days | |||||||
Loss on extinguishment of debt | $ 146,000,000 | |||||||
Aggregate notes repurchased and derecognized | 180,000,000 | |||||||
Estimated settlement cost | 325,000,000 | |||||||
Financing liability, fair value | 325,000,000 | |||||||
Bifurcated embedded derivative from new financing liability, fair value | 278,000,000 | |||||||
Acceleration of amortization of debt issuance costs | 1,000,000 | |||||||
Cash paid to holders | 314,000,000 | |||||||
Carrying value of the financing liability | 47,000,000 | |||||||
Outstanding Amount | 47,000,000 | |||||||
Fair value of the bifurcated embedded equity derivative | 267,000,000 | |||||||
Debt liability and bifurcated embedded equity derivative were settled in full | 314,000,000 | |||||||
Private Offering | Notes Repurchase | Other expense-net | ||||||||
Debt Instrument | ||||||||
Gain on the fair value adjustment of the bifurcated embedded equity derivative | 11,000,000 | |||||||
Private Offering | Additional Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Trading days used to determine the conversion value | 1 day | |||||||
Loss on extinguishment of debt | $ 23,000,000 | |||||||
Aggregate notes repurchased and derecognized | 57,000,000 | |||||||
Estimated settlement cost | 80,000,000 | |||||||
Financing liability, fair value | 25,000,000 | |||||||
Bifurcated embedded derivative from new financing liability, fair value | 55,000,000 | |||||||
Acceleration of amortization of debt issuance costs | 300,000 | |||||||
Cash paid to holders | 82,000,000 | |||||||
Carrying value of the financing liability | 25,000,000 | |||||||
Fair value of the bifurcated embedded equity derivative | 57,000,000 | |||||||
Private Offering | Additional Notes Repurchase | Other expense-net | ||||||||
Debt Instrument | ||||||||
Loss on the fair value adjustment of the bifurcated embedded equity derivative | 1,500,000 | |||||||
Private Offering | 2023 Notes | Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | 45,000,000 | |||||||
Private Offering | 2023 Notes | Additional Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | 18,000,000 | |||||||
Private Offering | 2024 Notes | Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | 135,000,000 | |||||||
Private Offering | 2024 Notes | Additional Notes Repurchase | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | $ 39,000,000 | |||||||
Warrants | 2023 and 2024 Notes | ||||||||
Debt Instrument | ||||||||
Outstanding Amount | $ 0 | |||||||
Warrants | 2023 and 2024 Notes | Other expense-net | ||||||||
Debt Instrument | ||||||||
Net loss on the fair value adjustment of the warrants | 4,200,000 | |||||||
Warrants | 2023 Notes | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | 184,000,000 | |||||||
Warrants | 2024 Notes | ||||||||
Debt Instrument | ||||||||
Aggregate purchase price | $ 203,000,000 | |||||||
Warrants | Common Stock | Maximum | ||||||||
Debt Instrument | ||||||||
Trading days used to determine the conversion value | 3 days | |||||||
Warrants | Common Stock | Minimum | ||||||||
Debt Instrument | ||||||||
Trading days used to determine the conversion value | 2 years |
Convertible Senior Notes - Note
Convertible Senior Notes - Notes Due 2024 (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 USD ($) | Oct. 29, 2022 USD ($) shares | Oct. 30, 2021 USD ($) | Oct. 29, 2022 USD ($) shares | Oct. 30, 2021 USD ($) | Jan. 29, 2022 USD ($) | |
Debt Instrument | ||||||
Debt amount settled in cash | $ 13,053,000 | $ 235,126,000 | ||||
Amortization of debt discount | 24,236,000 | |||||
Loss on extinguishment of debt | $ (18,513,000) | $ (169,578,000) | $ (21,784,000) | |||
Shares acquired from notes settlement | shares | 1,127,557 | |||||
Common Stock | ||||||
Debt Instrument | ||||||
Shares acquired from notes settlement | shares | 127,557 | 1,127,557 | ||||
Private Offering | ||||||
Debt Instrument | ||||||
Discounts upon original issuance | $ 213,000 | $ 213,000 | $ 37,576,000 | |||
2024 Notes | ||||||
Debt Instrument | ||||||
Debt amount settled in cash | $ 3,600,000 | |||||
Shares issued upon conversion | shares | 9,760 | |||||
Debt instrument, principal amount | $ 350,000,000 | |||||
Debt instrument, interest rate | 0% | |||||
Shares acquired from notes settlement | shares | 9,760 | |||||
2024 Notes | Private Offering | ||||||
Debt Instrument | ||||||
Debt instrument, principal amount | $ 350,000,000 | |||||
Debt instrument, interest rate | 0% | |||||
Discounts upon original issuance | $ 208,000 | $ 208,000 | $ 31,577,000 | |||
2024 Notes | Circumstances (1) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible trading days | 30 | |||||
Debt instrument, convertible percentage of stock price | 130% | |||||
2024 Notes | Circumstances (2) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible percentage of stock price | 98% | |||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
2024 Notes | Circumstances (3) | ||||||
Debt Instrument | ||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
2024 Notes | Maximum | Circumstances (2) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible consecutive trading days | 10 | |||||
2024 Notes | Minimum | Circumstances (1) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible trading days | 20 | |||||
2024 Notes | Minimum | Circumstances (2) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible consecutive trading days | 5 |
Convertible Senior Notes - No_2
Convertible Senior Notes - Notes Due 2023 (Detail) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2018 USD ($) | Oct. 29, 2022 USD ($) shares | Oct. 30, 2021 USD ($) | Oct. 29, 2022 USD ($) shares | Oct. 30, 2021 USD ($) | Jan. 29, 2022 USD ($) | |
Debt Instrument | ||||||
Debt amount settled in cash | $ 13,053,000 | $ 235,126,000 | ||||
Shares acquired from notes settlement | shares | 1,127,557 | |||||
Loss on extinguishment of debt | $ (18,513,000) | $ (169,578,000) | (21,784,000) | |||
Amortization of debt discount | $ 24,236,000 | |||||
Common Stock | ||||||
Debt Instrument | ||||||
Shares acquired from notes settlement | shares | 127,557 | 1,127,557 | ||||
Private Offering | ||||||
Debt Instrument | ||||||
Debt outstanding | $ 43,398,000 | $ 43,398,000 | $ 256,452,000 | |||
Discounts upon original issuance | 213,000 | 213,000 | 37,576,000 | |||
2023 Notes | ||||||
Debt Instrument | ||||||
Debt amount settled in cash | 9,400,000 | |||||
Debt instrument, principal amount | $ 335,000,000 | 9,400,000 | 9,400,000 | |||
Debt instrument, interest rate | 0% | |||||
Aggregate principal amount, current | 1,702,000 | $ 1,702,000 | 9,389,000 | |||
2023 Notes | Common Stock | ||||||
Debt Instrument | ||||||
Shares issued upon conversion | shares | 27,220 | |||||
2023 Notes | Convertible note bond hedges | Common Stock | ||||||
Debt Instrument | ||||||
Shares issued upon conversion | shares | 12 | |||||
Shares acquired from notes settlement | shares | 27,208 | |||||
2023 Notes | Private Offering | ||||||
Debt Instrument | ||||||
Debt instrument, principal amount | $ 300,000,000 | |||||
Debt instrument, interest rate | 0% | |||||
Debt outstanding | 1,702,000 | $ 1,702,000 | 68,391,000 | |||
Discounts upon original issuance | $ 5,000 | $ 5,000 | $ 5,999,000 | |||
2023 Notes | Overallotment option | ||||||
Debt Instrument | ||||||
Debt outstanding | $ 35,000,000 | |||||
2023 Notes | Circumstances (1) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible consecutive trading days | 30 | |||||
Debt instrument, convertible percentage of stock price | 130% | |||||
2023 Notes | Circumstances (2) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible consecutive trading days | 10 | |||||
Debt instrument, convertible percentage of stock price | 98% | |||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
2023 Notes | Circumstances (3) | ||||||
Debt Instrument | ||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
2023 Notes | Minimum | Circumstances (1) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible trading days | 20 | |||||
2023 Notes | Minimum | Circumstances (2) | ||||||
Debt Instrument | ||||||
Debt instrument, convertible consecutive trading days | 5 |
Credit Facilities - Outstanding
Credit Facilities - Outstanding Balances (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 29, 2022 | Jan. 29, 2022 | |
Line of Credit Facility | ||
Outstanding Amount | $ 2,481,691 | $ 2,009,785 |
Unamortized Debt Issuance Costs | (44,903) | (21,828) |
Net Carrying Amount | $ 2,436,788 | 1,987,957 |
RHI | Term loan B | ||
Line of Credit Facility | ||
Interest Rate | 5.62% | |
Outstanding Amount | $ 1,980,000 | 1,995,000 |
Unamortized Debt Issuance Costs | (19,299) | (21,797) |
Net Carrying Amount | $ 1,960,701 | 1,973,203 |
RHI | Term loan B-2 | ||
Line of Credit Facility | ||
Interest Rate | 6.38% | |
Outstanding Amount | $ 500,000 | |
Unamortized Debt Issuance Costs | (25,604) | |
Net Carrying Amount | $ 474,396 | |
RHI | Equipment promissory notes | ||
Line of Credit Facility | ||
Interest Rate | 4.56% | |
Outstanding Amount | $ 1,691 | 14,785 |
Unamortized Debt Issuance Costs | (31) | |
Net Carrying Amount | $ 1,691 | 14,754 |
RHI, Canadian subsidiary and other subsidiaries | Asset Based Credit Facility [Member] | ||
Line of Credit Facility | ||
Interest Rate | 4.88% | |
RHI, Canadian subsidiary and other subsidiaries | Other non-current assets | Asset Based Credit Facility [Member] | ||
Line of Credit Facility | ||
Deferred financing fees | $ 3,400 | 4,100 |
RHI, Canadian subsidiary and other subsidiaries | Term loan B | Term loan B | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | 1,961,000 | |
RHI, Canadian subsidiary and other subsidiaries | Term loan B-2 | Term loan B-2 | ||
Line of Credit Facility | ||
Net Carrying Amount | 474,000 | |
RHI, Canadian subsidiary and other subsidiaries | Other current liabilities | Term loan B | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | $ 20,000 | |
RHI, Canadian subsidiary and other subsidiaries | Other current liabilities | Term loan B-2 | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | $ 5,000 |
Credit Facilities - Outstandi_2
Credit Facilities - Outstanding Balances Footnotes (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Line of Credit Facility | ||
Net carrying amount | $ 2,436,788 | $ 1,987,957 |
RHI | Term loan B | ||
Line of Credit Facility | ||
Net carrying amount | 1,960,701 | 1,973,203 |
RHI | Term loan B-2 | ||
Line of Credit Facility | ||
Net carrying amount | 474,396 | |
RHI | Equipment promissory notes | ||
Line of Credit Facility | ||
Net carrying amount | 1,691 | 14,754 |
RHI, Canadian subsidiary and other subsidiaries | Other non-current assets | Asset Based Credit Facility [Member] | ||
Line of Credit Facility | ||
Deferred financing fees | 3,400 | 4,100 |
RHI, Canadian subsidiary and other subsidiaries | Term loan B | Term loan B | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | 1,961,000 | |
RHI, Canadian subsidiary and other subsidiaries | Term loan B-2 | Term loan B-2 | ||
Line of Credit Facility | ||
Net carrying amount | 474,000 | |
RHI, Canadian subsidiary and other subsidiaries | Other current liabilities | Term loan B | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | $ 20,000 | |
RHI, Canadian subsidiary and other subsidiaries | Other current liabilities | Term loan B-2 | Secured Debt [Member] | ||
Line of Credit Facility | ||
Debt outstanding | $ 5,000 |
Credit Facilities - Asset Based
Credit Facilities - Asset Based Credit Facility (Detail) $ in Millions | 9 Months Ended | |
Jul. 29, 2021 USD ($) | Oct. 29, 2022 USD ($) | |
Line of Credit Facility | ||
Debt Instrument, Covenant Description | The ABL 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 ABL Credit Agreement (the “FCCR Covenant”). The FCCR Covenant only applies in certain limited circumstances, including when the unused availability under the ABL Credit Agreement drops below the greater of (A) $40 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. | |
Debt Instrument, Covenant Compliance | As of October 29, 2022, RHI was in compliance with the FCCR Covenant. | |
ABL Credit Agreement | RHI, Canadian subsidiary and other subsidiaries | ||
Line of Credit Facility | ||
FCCR Covenant, threshold amount | $ 40 | |
FCCR Covenant, threshold amount (percentage) | 10% | |
FCCR Covenant ratio | 1 | |
Revolving line of credit | ABL Credit Agreement | RHI, Canadian subsidiary and other subsidiaries | ||
Line of Credit Facility | ||
Line of credit facility, maximum borrowing capacity | $ 600 | |
Line of credit facility, accordion feature | 300 | |
Amount available for borrowing | $ 578 | |
Outstanding letters of credit | $ 25 | |
Revolving line of credit | ABL Credit Agreement | RHI, Canadian subsidiary and other subsidiaries | LIBOR | ||
Line of Credit Facility | ||
Debt instrument, interest rate | 0% | |
Revolving line of credit | ABL Credit Agreement | RHI, Canadian subsidiary and other subsidiaries | Maximum | ||
Line of Credit Facility | ||
Line of credit facility, maximum borrowing capacity including accordion feature | 900 | |
Revolving line of credit | ABL Credit Agreement | RHI, Canadian subsidiary and other subsidiaries | Minimum | ||
Line of Credit Facility | ||
Line of credit facility, maximum borrowing capacity | 600 | |
Revolving line of credit | ABL Credit Agreement | Restoration Hardware Canada, Inc. | ||
Line of Credit Facility | ||
Line of credit facility, maximum borrowing capacity | $ 10 |
Credit Facilities - Term Loan C
Credit Facilities - Term Loan Credit Agreement (Detail) - RHI - USD ($) | May 13, 2022 | Oct. 20, 2021 |
SOFR | 2022 Incremental Amendment | ||
Line of Credit Facility | ||
Credit spread adjustment | 0.10% | |
Debt instrument, basis spread on variable rate | 3.25% | |
Floor interest rate | 0.50% | |
Secured Promissory Note | ||
Line of Credit Facility | ||
Principal amount | $ 2,000,000,000 | |
Debt instrument, basis spread on variable rate | 2.50% | |
Percentage of discount on face value | 0.50% | |
Percentage of prepayment premium | 1% | |
Secured Promissory Note | 2022 Incremental Amendment | ||
Line of Credit Facility | ||
Principal amount | $ 500,000,000 | |
Secured Promissory Note | LIBOR | ||
Line of Credit Facility | ||
Debt instrument, basis spread on variable rate | 2.50% | |
Floor interest rate | 0.50% |
Credit Facilities - Equipment L
Credit Facilities - Equipment Loan Facility (Detail) - RHI - Equipment Loan Facility - loan | 1 Months Ended | ||
Sep. 05, 2017 | Sep. 30, 2017 | Oct. 29, 2022 | |
Line Of Credit Facility [Line Items] | |||
Notes outstanding | 1 | ||
Maximum | |||
Line Of Credit Facility [Line Items] | |||
Maturity term | 4 years | ||
Minimum | |||
Line Of Credit Facility [Line Items] | |||
Maturity term | 3 years |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value and Carrying Value of Notes and Term Loan Credit Agreement (Detail) - Recurring - Level 2 - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
2023 Notes | Fair Value | Observable market data | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes | $ 1,632 | $ 70,857 |
2023 Notes | Principal Carrying Value | Observable market data | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes | 1,707 | 68,706 |
2024 Notes | Fair Value | Observable market data | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes | 36,499 | 198,087 |
2024 Notes | Principal Carrying Value | Observable market data | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes | 41,904 | 189,297 |
Term loan B | Fair Value | Discounted cash flows | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Term Loan Credit Agreement | 1,961,700 | 1,995,000 |
Term loan B | Principal Carrying Value | Discounted cash flows | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Term Loan Credit Agreement | 1,980,000 | $ 1,995,000 |
Term loan B-2 | Fair Value | Discounted cash flows | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Term Loan Credit Agreement | 499,044 | |
Term loan B-2 | Principal Carrying Value | Discounted cash flows | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Term Loan Credit Agreement | $ 500,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Income Taxes | ||||
Income tax expense (benefit) | $ 36,162 | $ 54,391 | $ (70,867) | $ 99,124 |
Effective income tax rate | 26.80% | 22.80% | (20.20%) | 15.50% |
Unrecognized tax benefits | $ 8,200 | $ 8,200 | ||
Tax expense and the effective tax rate, if recognized | 7,600 | 7,600 | ||
Exposures related to unrecognized tax benefits | $ 5,500 | $ 5,500 |
Net Income Per Share - Calculat
Net Income Per Share - Calculation of Net Income Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Net Income Per Share | ||||
Net income | $ 98,760 | $ 184,099 | $ 421,746 | $ 541,501 |
Loss on extinguishment of debt | $ 18,513 | 169,578 | $ 21,784 | |
Net income available to common stockholders | $ 98,760 | $ 591,324 | ||
Weighted-average shares-basic | 23,681,482 | 21,430,557 | 23,588,464 | 21,200,146 |
Effect of dilutive stock-based awards | 2,209,736 | 6,462,775 | 2,943,274 | 6,645,663 |
Effect of dilutive convertible senior notes | 207,047 | 3,397,747 | 724,173 | 3,647,587 |
Weighted-average shares-diluted | 26,098,265 | 31,291,079 | 27,255,911 | 31,493,396 |
Basic net income per share | $ 4.17 | $ 8.59 | $ 25.07 | $ 25.54 |
Diluted net income per share | $ 3.78 | $ 5.88 | $ 21.70 | $ 17.19 |
Net Income Per Share - Calcul_2
Net Income Per Share - Calculation of Net Income Per Share Footnotes (Detail) - USD ($) | Oct. 29, 2022 | Jan. 29, 2022 |
Earnings Per Share Diluted | ||
Outstanding Amount | $ 2,481,691,000 | $ 2,009,785,000 |
2023 and 2024 Notes | Warrants | ||
Earnings Per Share Diluted | ||
Outstanding Amount | $ 0 | |
2023 Notes | Common Stock | ||
Earnings Per Share Diluted | ||
Stock prices | $ 193.65 | |
2023 Notes | Warrants | ||
Earnings Per Share Diluted | ||
Stock prices | 309.84 | |
2024 Notes | Common Stock | ||
Earnings Per Share Diluted | ||
Stock prices | 211.40 | |
2024 Notes | Warrants | ||
Earnings Per Share Diluted | ||
Stock prices | $ 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 | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options were excluded from calculation of diluted net income share | 1,104,230 | 121,587 | 1,103,188 | 86,474 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options were excluded from calculation of diluted net income share | 1,084,920 | 121,587 | 1,083,745 | 86,474 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Options were excluded from calculation of diluted net income share | 19,310 | 19,443 |
Share Repurchase Program and _2
Share Repurchase Program and Share Retirement (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Oct. 29, 2022 | Oct. 29, 2022 | Jun. 22, 2022 | |
Share Repurchase Program and Share Retirement | |||
Share repurchase program authorized amount | $ 2,450,000 | $ 2,450,000 | $ 2,000,000 |
Shares of common stock purchased under repurchase program, shares | 1,127,557 | ||
Shares of common stock purchased at an average price per share under repurchase program | $ 254.02 | ||
Shares of common stock purchased under repurchase program | 31,710 | $ 286,441 | |
Amount of shares available under repurchase program | 2,164,000 | $ 2,164,000 | |
Treasury stock, shares retired | 1,127,557 | ||
Amount of treasury stock reclassified to additional paid-in capital | $ 286,000 | $ 286,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Oct. 31, 2022 | Jan. 31, 2022 | Oct. 18, 2020 | Nov. 01, 2012 | Oct. 31, 2020 | Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | Jan. 29, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Stock-based compensation expense | $ 10,000,000 | $ 12,000,000 | $ 33,725,000 | $ 37,426,000 | ||||||
Stock-based compensation cost capitalized | 0 | 0 | 0 | 0 | ||||||
Selling, general and administrative expenses | 250,528,000 | 232,715,000 | 832,627,000 | 690,492,000 | ||||||
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 | 91,000,000 | $ 91,000,000 | ||||||||
Unrecognized compensation expense with weighted-average period | 4 years 4 months 20 days | |||||||||
Aggregate intrinsic value of options outstanding | 588,000,000 | $ 588,000,000 | ||||||||
Aggregate intrinsic value of options vested or expected to vest | 574,000,000 | 574,000,000 | ||||||||
Aggregate intrinsic value of options exercisable | 517,000,000 | $ 517,000,000 | ||||||||
Weighted-average remaining contractual life of options exercisable | 4 years 10 days | |||||||||
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 | 19,000,000 | $ 19,000,000 | ||||||||
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 | $ 7,700,000 | $ 7,700,000 | ||||||||
Unrecognized compensation expense with weighted-average period | 4 years 5 months 26 days | |||||||||
Restricted stock awards outstanding | 24,390 | 24,390 | ||||||||
Restricted stock awards outstanding with weighted-average grant date fair value per share | $ 437.37 | $ 437.37 | ||||||||
Weighted-average fair value per share of awards granted | $ 49.53 | $ 117.94 | ||||||||
Vested restricted stock unit | 1,780 | 4,700 | ||||||||
Stock Incentive Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Options granted | 6,829,041 | 0 | 0 | |||||||
Shares available for future issuance | 1,615,461 | 1,185,322 | ||||||||
Additional shares issuable under the Stock Incentive Plan evergreen provision | 430,139 | |||||||||
Stock Incentive Plan | Chairman and Chief Executive Officer | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Stock-based compensation expense | $ 174,000,000 | $ 4,100,000 | $ 5,800,000 | $ 14,000,000 | $ 18,000,000 | |||||
Options granted | 700,000 | |||||||||
Exercise price of option granted | $ 385.30 | |||||||||
Subsequent Event | 2012 Stock Incentive Plan and 2012 Stock Option Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||||||||
Options cancelled upon expiration of plans | 1,607,508 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options Outstanding, Vested or Expected to Vest, and Exercisable (Detail) | 9 Months Ended |
Oct. 29, 2022 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Options Outstanding, Number of Options | shares | 4,473,306 |
Options Outstanding, Weighted-Average Exercise Price | $ 157.54 |
Options Exercisable, Number of Options | shares | 3,480,841 |
Options Exercisable, Weighted-Average Exercise Price | $ 135.32 |
Vested or expected to vest, Number of Options | shares | 4,247,547 |
Vested or expected to vest, Weighted-Average Exercise Price | $ 152.62 |
$25.39 - $45.82 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 25.39 |
Range of Exercise Prices, Upper | $ 45.82 |
Options Outstanding, Number of Options | shares | 276,530 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 3 years 6 months 10 days |
Options Outstanding, Weighted-Average Exercise Price | $ 35.63 |
Options Exercisable, Number of Options | shares | 276,530 |
Options Exercisable, Weighted-Average Exercise Price | $ 35.63 |
$50.00 - $50.00 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 50 |
Range of Exercise Prices, Upper | $ 50 |
Options Outstanding, Number of Options | shares | 1,000,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 4 years 6 months 3 days |
Options Outstanding, Weighted-Average Exercise Price | $ 50 |
Options Exercisable, Number of Options | shares | 1,000,000 |
Options Exercisable, Weighted-Average Exercise Price | $ 50 |
$53.47 - $61.30 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 53.47 |
Range of Exercise Prices, Upper | $ 61.30 |
Options Outstanding, Number of Options | shares | 197,830 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 1 year 6 months 21 days |
Options Outstanding, Weighted-Average Exercise Price | $ 61.19 |
Options Exercisable, Number of Options | shares | 197,830 |
Options Exercisable, Weighted-Average Exercise Price | $ 61.19 |
$75.43 - $75.43 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Upper | $ 75.43 |
Options Outstanding, Number of Options | shares | 1,000,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 8 months 1 day |
Options Outstanding, Weighted-Average Exercise Price | $ 75.43 |
Options Exercisable, Number of Options | shares | 1,000,000 |
Options Exercisable, Weighted-Average Exercise Price | $ 75.43 |
$87.31 - $154.82 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 87.31 |
Range of Exercise Prices, Upper | $ 154.82 |
Options Outstanding, Number of Options | shares | 798,216 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 6 years 9 months 18 days |
Options Outstanding, Weighted-Average Exercise Price | $ 132.81 |
Options Exercisable, Number of Options | shares | 226,266 |
Options Exercisable, Weighted-Average Exercise Price | $ 123.03 |
$156.40 - $380.53 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 156.40 |
Range of Exercise Prices, Upper | $ 380.53 |
Options Outstanding, Number of Options | shares | 373,480 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 8 years 2 months 8 days |
Options Outstanding, Weighted-Average Exercise Price | $ 280.31 |
Options Exercisable, Number of Options | shares | 66,885 |
Options Exercisable, Weighted-Average Exercise Price | $ 270.24 |
$385.30 - $716.75 | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 385.30 |
Range of Exercise Prices, Upper | $ 716.75 |
Options Outstanding, Number of Options | shares | 827,250 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 8 years 18 days |
Options Outstanding, Weighted-Average Exercise Price | $ 419.05 |
Options Exercisable, Number of Options | shares | 713,330 |
Options Exercisable, Weighted-Average Exercise Price | $ 389.36 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) | Oct. 29, 2022 USD ($) |
Commitments and Contingencies. | |
Material off balance sheet commitments | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Detail) | 9 Months Ended | 12 Months Ended |
Oct. 29, 2022 store segment | Jan. 29, 2022 customer | |
Segment Reporting Information | ||
Number of operating segments | segment | 3 | |
Number of retail stores | 4 | |
Number of RH outlet stores | 39 | |
Number of customers accounted for more than 10% of Company's revenues | customer | 0 | |
Canada [Member] | ||
Segment Reporting Information | ||
Number of RH outlet stores | 2 | |
U.K [Member] | ||
Segment Reporting Information | ||
Number of retail stores | 1 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income and Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Segment Reporting Information | ||||
Income from operations | $ 170,250 | $ 272,539 | $ 609,952 | $ 709,415 |
Asset impairments | (10,926) | (19,080) | (7,354) | |
Non-cash compensation | (4,136) | (5,831) | (14,315) | (17,559) |
Employer payroll taxes on option exercise | 11,717 | |||
Professional fee | (7,469) | |||
Compensation settlements | (3,483) | |||
Recall accrual | (340) | (560) | (840) | |
Legal settlement | 4,188 | 4,188 | ||
Gain on sale of building and land | 775 | 775 | ||
Reorganization related costs | (449) | |||
Interest expense-net | 31,417 | 13,223 | 78,536 | 40,112 |
Loss on extinguishment of debt | 18,513 | 169,578 | 21,784 | |
Other expense-net | 1,989 | 4,841 | ||
Income before income taxes | 136,844 | 240,803 | 356,997 | 647,519 |
RH Segment | ||||
Segment Reporting Information | ||||
Income from operations | 173,162 | 276,091 | 639,219 | 721,343 |
Waterworks | ||||
Segment Reporting Information | ||||
Income from operations | $ 7,187 | $ 2,619 | 22,394 | $ 14,274 |
Tradename impairment | $ 35,000 |
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 | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Segment Reporting Information | ||||
Net revenues | $ 869,066 | $ 1,006,428 | $ 2,817,978 | $ 2,856,079 |
Gross profit | 420,778 | 505,254 | 1,442,579 | 1,399,907 |
Depreciation and amortization | 28,032 | 24,819 | 79,760 | 71,375 |
Share of equity method investments losses | 1,922 | 2,313 | 6,118 | 6,894 |
RH Segment | ||||
Segment Reporting Information | ||||
Net revenues | 821,260 | 964,859 | 2,670,390 | 2,732,300 |
Gross profit | 394,947 | 484,363 | 1,362,843 | 1,337,983 |
Depreciation and amortization | 26,785 | 23,878 | 75,980 | 68,042 |
Waterworks | ||||
Segment Reporting Information | ||||
Net revenues | 47,806 | 41,569 | 147,588 | 123,779 |
Gross profit | 25,831 | 20,891 | 79,736 | 61,924 |
Depreciation and amortization | $ 1,247 | $ 941 | $ 3,780 | $ 3,333 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Metrics Under ASC 280 (Detail) - USD ($) $ in Thousands | Oct. 29, 2022 | Jan. 29, 2022 |
Segment Reporting Information | ||
Goodwill | $ 141,021 | $ 141,100 |
Tradenames, trademarks and other intangible assets | 74,269 | 73,161 |
Equity method investments | 97,005 | 100,810 |
Total assets | 5,883,715 | 5,540,470 |
RH Segment | ||
Segment Reporting Information | ||
Goodwill | 141,021 | 141,100 |
Tradenames, trademarks and other intangible assets | 57,269 | 56,161 |
Total assets | 5,573,649 | 5,259,719 |
Waterworks | ||
Segment Reporting Information | ||
Tradenames, trademarks and other intangible assets | 17,000 | 17,000 |
Equity method investments | 539 | |
Total assets | 207,153 | 179,941 |
Real Estate Development | ||
Segment Reporting Information | ||
Equity method investments | 96,466 | 100,810 |
Total assets | $ 102,913 | $ 100,810 |
Segment Reporting - Balance S_2
Segment Reporting - Balance Sheet Metrics Under ASC 280 Footnotes (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 29, 2022 | Jan. 28, 2017 | Jan. 29, 2022 | |
Segment Reporting Information | |||
Equity Method Investments | $ 97,005 | $ 100,810 | |
Waterworks | |||
Segment Reporting Information | |||
Goodwill impairment | $ 51,000 | ||
Tradename impairment | 35,000 | ||
Equity Method Investments | 539 | ||
Real Estate Development | |||
Segment Reporting Information | |||
Equity Method Investments | $ 96,466 | $ 100,810 |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues, Categories (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 29, 2022 | Oct. 30, 2021 | Oct. 29, 2022 | Oct. 30, 2021 | |
Segment Reporting Information | ||||
Total net revenues | $ 869,066 | $ 1,006,428 | $ 2,817,978 | $ 2,856,079 |
Furniture [Member] | ||||
Segment Reporting Information | ||||
Total net revenues | 597,520 | 706,750 | 1,959,760 | 1,986,490 |
Non-furniture [Member] | ||||
Segment Reporting Information | ||||
Total net revenues | $ 271,546 | $ 299,678 | $ 858,218 | $ 869,589 |
Subsequent Events (Detail)
Subsequent Events (Detail) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 31, 2022 USD ($) property | Oct. 29, 2022 | |
Member LLCs | ||
Subsequent Event [Line Items] | ||
Percent of membership interest held, VIEs | 50% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Business Combination, Pro Forma Information, Incomplete Initial Accounting | Due to the close proximity of the acquisition date to the filing date of our Quarterly Report on Form 10-Q for the quarterly period ended October 29, 2022, the accounting for these recently completed VIEs is incomplete. Such information will be included in our Annual Report on Form 10-K for the year ending January 28, 2023. | |
Subsequent Event | Member LLCs | ||
Subsequent Event [Line Items] | ||
Promissory notes receivable, including accrued interest | $ | $ 27 | |
Subsequent Event | Member LLC | ||
Subsequent Event [Line Items] | ||
Percent of membership interest held, VIEs | 50% | |
Subsequent Event | Four Member LLCs [Member] | ||
Subsequent Event [Line Items] | ||
Percent of membership interest held, VIEs | 50% | |
Properties owned | 3 | |
Subsequent Event | U.K [Member] | Four Member LLCs [Member] | ||
Subsequent Event [Line Items] | ||
Properties owned | 1 |