Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 05, 2018 | Jun. 08, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | May 5, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RH | |
Entity Registrant Name | RH | |
Entity Central Index Key | 1,528,849 | |
Current Fiscal Year End Date | --02-02 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 21,634,290 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 20,796 | $ 17,907 |
Accounts receivable—net | 38,614 | 31,412 |
Merchandise inventories | 530,657 | 527,026 |
Prepaid expense and other current assets | 60,064 | 68,585 |
Total current assets | 650,131 | 644,930 |
Property and equipment—net | 811,369 | 800,698 |
Goodwill | 141,849 | 141,893 |
Trademarks and other intangible assets | 100,678 | 100,702 |
Deferred tax assets | 30,014 | 23,311 |
Other non-current assets | 14,920 | 21,332 |
Total assets | 1,748,961 | 1,732,866 |
Current liabilities: | ||
Accounts payable and accrued expenses | 264,173 | 318,765 |
Deferred revenue and customer deposits | 172,379 | 149,404 |
Other current liabilities | 59,944 | 51,166 |
Total current liabilities | 496,496 | 519,335 |
Asset based credit facility | 298,528 | 279,469 |
Term loan—net | 79,528 | 79,499 |
Financing obligations under build-to-suit lease transactions | 227,979 | 229,323 |
Deferred rent and lease incentives | 54,965 | 54,983 |
Other non-current obligations | 73,248 | 76,367 |
Total liabilities | 1,740,319 | 1,740,202 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity (deficit): | ||
Preferred stock, $0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of May 5, 2018 and February 3, 2018 | ||
Common stock, $0.0001 par value per share, 180,000,000 shares authorized, 41,835,129 shares issued and 21,612,197 shares outstanding as of May 5, 2018; 41,737,470 shares issued and 21,517,338 shares outstanding as of February 3, 2018 | 2 | 2 |
Additional paid-in capital | 870,751 | 860,288 |
Accumulated other comprehensive loss | (1,436) | (171) |
Retained earnings | 159,417 | 152,394 |
Treasury stock—at cost, 20,222,932 shares as of May 5, 2018 and 20,220,132 shares as of February 3, 2018 | (1,020,092) | (1,019,849) |
Total stockholders’ equity (deficit) | 8,642 | (7,336) |
Total liabilities and stockholders’ equity (deficit) | 1,748,961 | 1,732,866 |
Asset Based Credit Facility [Member] | ||
Current liabilities: | ||
Asset based credit facility | 219,000 | 199,970 |
Convertible Senior Notes Due 2019 [Member] | ||
Current liabilities: | ||
Convertible senior notes due-net | 331,678 | 327,731 |
Convertible Senior Notes Due 2020 [Member] | ||
Current liabilities: | ||
Convertible senior notes due-net | $ 257,425 | $ 252,994 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 05, 2018 | Feb. 03, 2018 |
Statement Of Financial Position [Abstract] | ||
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 | 41,835,129 | 41,737,470 |
Common stock, shares outstanding | 21,612,197 | 21,517,338 |
Treasury stock, shares | 20,222,932 | 20,220,132 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Income Statement [Abstract] | ||
Net revenues | $ 557,406 | $ 562,080 |
Cost of goods sold | 345,371 | 391,824 |
Gross profit | 212,035 | 170,256 |
Selling, general and administrative expenses | 158,434 | 163,360 |
Income from operations | 53,601 | 6,896 |
Interest expense—net | 17,035 | 12,179 |
Income (loss) before income taxes | 36,566 | (5,283) |
Income tax expense (benefit) | 8,507 | (1,913) |
Net income (loss) | $ 28,059 | $ (3,370) |
Weighted-average shares used in computing basic net income (loss) per share | 21,545,025 | 37,609,516 |
Basic net income (loss) per share | $ 1.30 | $ (0.09) |
Weighted-average shares used in computing diluted net income (loss) per share | 25,230,228 | 37,609,516 |
Diluted net income (loss) per share | $ 1.11 | $ (0.09) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ 28,059 | $ (3,370) |
Net losses from foreign currency translation | (1,265) | (1,192) |
Net unrealized holding gains on available-for-sale investments | 11 | |
Total comprehensive income (loss) | $ 26,794 | $ (4,551) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 28,059 | $ (3,370) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 17,047 | 16,020 |
Lease impairment adjustment | (1,157) | |
Non-cash charges resulting from inventory step-up | 190 | 1,380 |
Amortization of debt discount | 7,881 | 7,458 |
Stock-based compensation expense | 7,997 | 5,289 |
Other non-cash interest expense | 938 | 884 |
Change in assets and liabilities: | ||
Accounts receivable | (7,243) | 8 |
Merchandise inventories | (4,032) | 66,067 |
Prepaid expense and other assets | (26,181) | 7,547 |
Accounts payable and accrued expenses | (57,215) | 1,219 |
Deferred revenue and customer deposits | 28,159 | 22,232 |
Other current liabilities | 13,838 | (1,086) |
Deferred rent and lease incentives | 44 | 726 |
Other non-current obligations | (569) | (426) |
Net cash provided by operating activities | 7,756 | 123,948 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (27,121) | (21,173) |
Proceeds from sale of assets held for sale—net | 4,900 | |
Purchase of investments | (16,109) | |
Maturities of investments | 46,890 | |
Sales of investments | 145,020 | |
Net cash provided by (used in) investing activities | (27,121) | 159,528 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments under promissory and equipment security notes | (1,491) | |
Repurchases of common stock—including commissions | (300,140) | |
Payments on build-to-suit lease transactions | (3,207) | (1,289) |
Proceeds from exercise of stock options | 2,923 | 2,567 |
Tax withholdings related to issuance of stock-based awards | (351) | (149) |
Payments on capital leases | (112) | (76) |
Net cash provided by (used in) financing activities | 16,792 | (299,087) |
Effects of foreign currency exchange rate translation | (62) | (86) |
Net decrease in cash and cash equivalents and restricted cash equivalents | (2,635) | (15,697) |
Cash and cash equivalents | ||
Beginning of period—cash and cash equivalents | 17,907 | 87,023 |
Beginning of period—restricted cash equivalents (construction related deposits) | 7,407 | 28,044 |
Beginning of period—cash and cash equivalents and restricted cash equivalents | 25,314 | 115,067 |
End of period—cash and cash equivalents | 20,796 | 80,150 |
End of period—restricted cash equivalents (construction related deposits) | 1,883 | 19,220 |
End of period—cash and cash equivalents and restricted cash equivalents | 22,679 | 99,370 |
Non-cash transactions: | ||
Property and equipment additions in accounts payable and accrued expenses at period-end | 18,560 | 14,498 |
Property and equipment additions from unpaid construction related deposits | 2,650 | 4,913 |
Property and equipment additions due to build-to-suit lease transactions | 1,887 | $ 18,283 |
Issuance of non-current notes payable related to share repurchases from former employees | 243 | |
Asset Based Credit Facility [Member] | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowing | 334,000 | |
Repayments | $ (314,970) |
The Company
The Company | 3 Months Ended |
May 05, 2018 | |
Accounting Policies [Abstract] | |
The Company | NOTE 1—THE COMPANY Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, the “Company”), is a luxury home furnishings retailer that offers a growing number of categories including furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware, and child and teen furnishings. These products are sold through the Company’s stores, catalogs and websites. As of May 5, 2018, the Company operated a total of 84 retail Galleries and 32 outlet stores in 32 states, the District of Columbia and Canada, and includes 15 Waterworks showrooms in the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from the Company’s records and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state the Company’s financial position as of May 5, 2018, and the results of operations for the three months ended May 5, 2018 and April 29, 2017. The Company’s current fiscal year, which consists of 52 weeks, ends on February 2, 2019 (“fiscal 2018”). 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. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018 (the “2017 Form 10-K”). Certain prior year amounts have been reclassified for consistency with the current period presentation. This reclassification had no effect on the previously reported consolidated financial position or consolidated results of operations, and did not have a material effect on the previously reported consolidated cash flows. The results of operations for the three months ended May 5, 2018 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
May 05, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently Issued Accounting Standards | NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS Revenue from Contracts with Customers In May 2014, the FASB and International Accounting Standards Board issued their converged accounting standards update on revenue recognition, Accounting Standards Update 2014-09—Revenue from Contracts with Customers (Topic 606) . This guidance outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Under the new guidance, transfer of control is no longer the same as transfer of risks and rewards as indicated in the prior guidance. Adoption and Accounting Policy The Company adopted Topic 606 on February 4, 2018 using the modified retrospective transition method and recorded a decrease to opening retained earnings of $21.0 million, inclusive of the tax impact. Results reported within the Company’s condensed consolidated financial statements for reporting periods beginning February 4, 2018 are presented under Topic 606 while prior periods are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605 —Revenue Recognition (Topic 605) . Under Topic 606, changes were made to the recognition timing or classification of revenues and expenses for the following: Description Policy under Topic 605 Policy under Topic 606 Advertising expenses Costs associated with Source Books were capitalized and amortized over their expected period of future benefit. Expense was amortized based upon the ratio of actual revenues to the total of actual and estimated future revenues on an individual Source Book basis, generally over a twelve-month period after they were mailed. Costs associated with Source Books are expensed upon the delivery of the Source Books to the carrier. In the case of multiple printings of a Source Book, the creative costs will be expensed in full upon the initial delivery of Source Books to the carrier. Gift card breakage Recognized gift card breakage (amounts not expected to be redeemed) within selling, general and administrative expenses. Recognize gift card breakage within net revenues proportional to actual gift card redemptions. Membership revenue Annual fees for new memberships in the RH Members Program and renewals were recorded as deferred revenue when collected from customers and recognized as revenue on a straight-line basis over the twelve month membership period. Annual fees for new memberships in the RH Members Program are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, using historical trends of sales to members. RH Members Program renewal fees are recorded as deferred revenue when collected from customers and will continue to be recognized as revenue on a straight-line basis over the twelve month membership period. Revenue recognition Revenue for merchandise that is not delivered via the home-delivery channel was recognized upon delivery. Revenue for merchandise that is not delivered via the home-delivery channel will be recognized upon shipment. Allowance for sales returns Recognized an allowance for sales returns as a net liability within other current liabilities. Recognize an allowance for sales returns on a gross basis as a liability within other current liabilities and a right of return asset for merchandise within prepaid expense and other current assets. Advertising expenses — The adoption of Topic 606 materially impacts the timing of recognizing advertising expense related to direct response advertising, including costs associated with the Company’s Source Books. Under Topic 606, the Company will recognize expense associated with the Source Books upon the delivery of the Source Books to the carrier. In the case of multiple printings of a Source Book, the creative costs will be expensed in full upon the initial delivery of Source Books to the carrier. Prior to adoption of Topic 606, costs associated with Source Books were capitalized and amortized over their expected period of future benefit. Such amortization was based upon the ratio of actual revenues to the total of actual and estimated future revenues on an individual Source Book basis. Each Source Book was generally fully amortized within a twelve-month period after they were mailed and the majority of the amortization occurred within the first five to nine months, with the exception of the Holiday Source Books, which were generally fully amortized within a three-month period after they were mailed . Upon adoption of Topic 606, capitalized costs associated with Source Books of $37.8 million that had been delivered to the carrier prior to or on February 3, 2018 were reclassified to retained earnings on the consolidated balance sheets, resulting in a decrease to the opening retained earnings balance . Gift card breakage — Under Topic 606, the Company recognizes gift card breakage proportional to actual gift card redemptions and such breakage is recorded within net revenues on the condensed consolidated statements of operations. Gift card breakage was previously recorded as a reduction to selling, general and administrative expenses when the likelihood of redemption was remote. Upon adoption of Topic 606, gift card liabilities of $6.0 million were reclassified to retained earnings on the consolidated balance sheets , resulting in an increase to the opening retained earnings balance . Membership revenue — Under Topic 606, the annual fee for new memberships in the RH Members Program is recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, using historical trends of sales to members. Prior to the adoption of Topic 606, new memberships were recorded as deferred revenue when collected from customers and recognized as revenue on a straight-line basis over the twelve month membership period. This will result in a majority of revenue being recognized during the first six months of the membership period. The adoption of Topic 606 will not have an impact on membership renewal fees, which will continue to be recognized as revenue on a straight-line basis over the twelve month membership period, until the Company has more information regarding membership renewal purchasing trends. Upon adoption of Topic 606, deferred membership revenue of $3.8 million was reclassified to retained earnings on the consolidated balance sheets, resulting in an increase to the opening retained earnings balance. Revenue recognition — Under Topic 606, the Company will continue to recognize revenue for merchandise delivered via the home-delivery channel upon delivery. Under Topic 606, revenue for merchandise delivered via all other delivery channels will be recognized upon shipment , whereas previously such revenue was recognized upon delivery . Upon adoption of Topic 606, deferred revenue (net of cost of goods sold) of $1.3 million was reclassified to retained earnings on the consolidated balance sheets , resulting in an increase to the opening retained earnings balance . The Company adopted the practical expedient related to shipping and handling activities. Under this option, in instances where revenue is recognized for the related merchandise prior to delivery to customers (i.e., revenue recognized upon shipment), the related costs of shipping and handling activities will be accrued for in the same period. Costs of shipping and handling continue to be included in cost of goods sold. Allowance for sales returns — In connection with adoption of Topic 606, the Company is required to recognize its allowance for sales returns on a gross basis rather than as a net liability. Upon adoption, this resulted in an increase to prepaid and other current assets (“right of return asset for merchandise”), with a corresponding increase to other current liabilities on the consolidated balance sheets, and did not impact the consolidated statements of operations. As of May 5, 2018, the right of return asset for merchandise was $5.3 million . Sales tax collection from customers — Under Topic 606, the Company has not changed its policy regarding sales tax collected from customers. Sales tax collected is not recognized as revenue but is included in accounts payable and accrued expenses on the consolidated balance sheets as it is ultimately remitted to governmental authorities. In connection with adoption of Topic 606, the Company recorded a $6.6 million tax adjustment associated with the charges listed above to retained earnings on the consolidated balance sheets, resulting in an increase to the opening retained earnings balance . Contract Liabilities The Company defers revenue associated with merchandise delivered via the home-delivery channel. As the Company recognizes revenue when the merchandise is delivered to our customers, it is included as deferred revenue on the consolidated balance sheets while in-transit. Customer deposits represent payments made by customers on custom orders. At the time of order placement the Company collects deposits for all custom orders equivalent to 50% of the purchase price. Custom order deposits are recognized as revenue when a customer obtains control of the merchandise. In addition, the Company collects annual membership fees related to the RH Members Program. 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, using 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. The Company expects that substantially all of the deferred revenue, customer deposits and deferred membership fees as of May 5, 2018 will be recognized within the next six months as the performance obligations are satisfied. In addition, the Company defers revenue when cash payments are received in advance of performance for unsatisfied obligations related to its gift cards and merchandise credits. Customer liabilities related to gift cards and merchandise credits was $17.7 million and $24.1 million as of May 5, 2018 and February 3, 2018, respectively. As discussed above, $6.0 million of the decrease was due to the reclassification of gift card liabilities to retained earnings upon adoption of Topic 606. During the three months ended May 5, 2018, the Company recognized $4.9 million of revenue related to previous deferrals related to its gift cards and merchandise credits and recorded gift card breakage of $0.4 million. The Company expects that approximately 70% of the remaining gift card and merchandise credit liabilities will be recognized when the gift cards are redeemed by customers. Disaggregated Revenue The Company recognizes revenue from its stores and direct sales channels. Stores net revenues represent sales originating in retail stores, including Waterworks showrooms, and outlet stores. Direct net revenues include sales through the Company’s Source Books, websites, and phone orders, including its Contract business and a portion of its Trade business. During the three months ended May 5, 2018, net revenues recognized from the stores and direct sales channels were $314.5 million and $242.9 million, respectively. Adoption Impact on Fiscal 2018 Results The following table summarizes the impact of adopting Topic 606 on the Company’s condensed consolidated statements of operations ( in thousands Three Months Ended May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Net revenues $ 557,406 $ (7,610 ) $ 549,796 Cost of goods sold 345,371 (2,988 ) 342,383 Gross profit 212,035 (4,622 ) 207,413 Selling, general and administrative expenses 158,434 3,803 162,237 Income from operations 53,601 (8,425 ) 45,176 Interest expense—net 17,035 — 17,035 Income before income taxes 36,566 (8,425 ) 28,141 Income tax expense 8,507 (1,950 ) 6,557 Net income $ 28,059 $ (6,475 ) $ 21,584 The following table summarizes the impact of adopting Topic 606 on certain line items of the Company’s condensed consolidated balance sheets ( in thousands As of May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Prepaid expense and other current assets $ 60,064 $ 27,652 $ 87,716 Deferred tax assets 30,014 (6,561 ) 23,453 Accounts payable and accrued expenses 264,173 (638 ) 263,535 Deferred revenue and customer deposits 172,379 9,463 181,842 Other current liabilities 59,944 (2,295 ) 57,649 Retained earnings 159,417 14,561 173,978 Financial Instruments In January 2016, the FASB issued Accounting Standards Update 2016-01—Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, Cash Flow Classification In August 2016, the FASB issued Accounting Standards Update No. 2016-15—Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued Accounting Standards Update No. 2016-18—Statement of Cash Flows (Topic 230): Restricted Cash Income Taxes: Intra-Entity Asset Transfers In October 2016, the FASB issued Accounting Standards Update No. 2016-16—Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Stock-Based Compensation In May 2017, the FASB issued Accounting Standards Update No. 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . The new guidance clarifies when modification accounting should be applied for changes to terms or conditions of a share-based payment award. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The standard will be applied prospectively. The Company adopted this new accounting standard in the first quarter of fiscal 2018 and such adoption did not have an impact on its consolidated financial statements . Accounting for Leases In February 2016, the FASB issued Accounting Standards Update 2016-02—Leases, |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 3 Months Ended |
May 05, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid Expense and Other Assets | NOTE 3—PREPAID EXPENSE AND OTHER ASSETS Prepaid expense and other current assets consist of the following ( in thousands May 5, February 3, 2018 2018 Vendor deposits $ 20,896 $ 9,701 Capitalized catalog costs 15,965 44,122 Right of return asset for merchandise 5,296 — Prepaid expense and other current assets 17,907 14,762 Total prepaid expense and other current assets $ 60,064 $ 68,585 Other non-current assets consist of the following ( in thousands May 5, February 3, 2018 2018 Deferred financing fees $ 4,194 $ 4,446 Construction related deposits 1,883 7,407 Other deposits 5,006 4,997 Other non-current assets 3,837 4,482 Total other non-current assets $ 14,920 $ 21,332 |
Goodwill and Trademarks and Dom
Goodwill and Trademarks and Domain Names | 3 Months Ended |
May 05, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Trademarks and Domain Names | NOTE 4—GOODWILL AND TRADEMARKS AND DOMAIN NAMES The following sets forth the goodwill and trademarks and domain names activity for the RH Segment and Waterworks for the three months ended May 5, 2018 ( in thousands Foreign February 3, Currency May 5, 2018 Translation 2018 RH Segment Goodwill $ 124,448 $ (44 ) $ 124,404 Trademarks and domain names 48,563 — 48,563 Waterworks Goodwill (1) 17,445 — 17,445 Trademarks 52,100 — 52,100 (1) T he Waterworks reporting unit goodwill is presented net of an impairment charge of $33.7 million, which was recorded in fiscal 2017 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 3 Months Ended |
May 05, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 5—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consist of the following ( in thousands May 5, February 3, 2018 2018 Accounts payable $ 166,044 $ 195,313 Accrued compensation 31,250 47,534 Accrued freight and duty 18,219 23,757 Accrued sales taxes 17,674 19,525 Accrued occupancy 9,909 8,612 Accrued catalog costs 7,037 9,000 Accrued professional fees 2,960 3,555 Other accrued expenses 11,080 11,469 Total accounts payable and accrued expenses $ 264,173 $ 318,765 Other current liabilities consist of the following ( in thousands May 5, February 3, 2018 2018 Allowance for sales returns $ 17,887 $ 10,565 Unredeemed gift card and merchandise credit liability 17,673 24,138 Federal and state tax payable 13,478 5,391 Current portion of non-current debt 6,080 6,033 Product recall reserves 1,029 1,201 Other current liabilities 3,797 3,838 Total other current liabilities $ 59,944 $ 51,166 |
Other Non-Current Obligations
Other Non-Current Obligations | 3 Months Ended |
May 05, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Non-Current Obligations | NOTE 6—OTHER NON-CURRENT OBLIGATIONS Other non-current obligations consist of the following ( in thousands May 5, February 3, 2018 2018 Notes payable for share repurchases $ 19,633 $ 19,390 Equipment security notes (1) 12,676 13,864 Promissory note (2) 11,285 11,627 Lease loss liabilities 8,344 9,684 Capital lease obligations—non-current 7,389 7,509 Deferred contract incentive (3) 4,762 5,358 Unrecognized tax benefits 3,764 3,728 Rollover units and profit interests (4) 2,317 2,211 Other non-current obligations 3,078 2,996 Total other non-current obligations $ 73,248 $ 76,367 (1) Represents the non-current portion of equipment security notes secured by certain of the Company’s distribution center property and equipment. (2) Represents the non-current portion of a promissory note secured by the Company’s aircraft. (3) Represents the non-current portion of an incentive payment received in relation to a 5-year service agreement. The amount will be amortized over the term of the agreement. (4) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 13 — Stock-Based Compensation |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
May 05, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | NOTE 7—CONVERTIBLE SENIOR NOTES 0.00% Convertible Senior Notes due 2020 In June 2015, the Company issued in a private offering $250 million principal amount of 0.00% convertible senior notes due 2020 and, in July 2015, the Company issued an additional $50 million principal amount pursuant to the exercise of the overallotment option granted to the initial purchasers as part of its June 2015 offering (collectively, the “2020 Notes”). The 2020 Notes are governed by the terms of an indenture between the Company and U.S. Bank National Association, as the Trustee. The 2020 Notes will mature on July 15, 2020, unless earlier purchased by the Company or converted. The 2020 Notes will not bear interest, except that the 2020 Notes will be subject to “special interest” in certain limited circumstances in the event of the failure of the Company to perform certain of its obligations under the indenture governing the 2020 Notes. The 2020 Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. Certain events are also considered “events of default” under the 2020 Notes, which may result in the acceleration of the maturity of the 2020 Notes, as described in the indenture governing the 2020 Notes. The 2020 Notes are guaranteed by the Company’s primary operating subsidiary, Restoration Hardware, Inc., as Guarantor. The guarantee is the unsecured obligation of the Guarantor and is subordinated to the Guarantor’s obligations from time to time with respect to its credit agreement and ranks equal in right of payment with respect to Guarantor’s other obligations. The initial conversion rate applicable to the 2020 Notes is 8.4656 shares of common stock per $1,000 principal amount of 2020 Notes, which is equivalent to an initial conversion price of approximately $118.13 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2020 Notes in connection with such make-whole fundamental change. Prior to March 15, 2020, the 2020 Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2015, 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 fiscal quarter, the last reported sale price of the Company’s 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 2020 Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. As of May 5, 2018, none of these conditions have occurred and, as a result, the 2020 Notes are not convertible as of May 5, 2018. On and after March 15, 2020, 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 2020 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2020 Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s 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. The Company may not redeem the 2020 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require the Company to purchase all or a portion of their 2020 Notes for cash at a price equal to 100% of the principal amount of the 2020 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2020 Notes, the Company separated the 2020 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2020 Notes and the fair value of the liability component of the 2020 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 6.47% over the expected life of the 2020 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the debt issuance costs related to the issuance of the 2020 Notes, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2020 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Debt issuance costs related to the 2020 Notes were comprised of discounts upon original issuance of $3.8 million and third party offering costs of $2.3 million. Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2020 balance on the condensed consolidated balance sheets. During both the three months ended May 5, 2018 and April 29, 2017, the Company recorded $0.3 million related to the amortization of debt issuance costs. The carrying values of the 2020 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands May 5, February 3, 2018 2018 Liability component Principal $ 300,000 $ 300,000 Less: Debt discount (39,974 ) (44,135 ) Net carrying amount $ 260,026 $ 255,865 Equity component (1) $ 84,003 $ 84,003 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. The Company recorded interest expense of $4.2 million and $3.9 million for the amortization of the debt discount related to the 2020 Notes during the three months ended May 5, 2018 and April 29, 2017, respectively. 2020 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2020 Notes in June 2015 and the exercise in full of the overallotment option in July 2015, the Company entered into convertible note hedge transactions whereby the Company has the option to purchase a total of approximately 2.5 million shares of its common stock at a price of approximately $118.13 per share. The total cost of the convertible note hedge transactions was $68.3 million. In addition, the Company sold warrants whereby the holders of the warrants have the option to purchase a total of approximately 2.5 million shares of the Company’s common stock at a price of $189.00 per share. The warrants contain certain adjustment mechanisms whereby the total number of shares to be purchased under such warrants may be increased up to a cap of 5.1 million shares of common stock (which cap may also be subject to adjustment). The Company received $30.4 million in cash proceeds from the sale of these warrants. Taken together, the purchase of the convertible note hedges and sale of the warrants are intended to offset any actual earnings dilution from the conversion of the 2020 Notes until the Company’s common stock is above approximately $189.00 per share. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the convertible note hedge and warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. The Company recorded a deferred tax liability of $32.8 million in connection with the debt discount associated with the 2020 Notes and recorded a deferred tax asset of $26.6 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets on the condensed consolidated balance sheets. 0.00% Convertible Senior Notes due 2019 In June 2014, the Company issued $350 million principal amount of 0.00% convertible senior notes due 2019 (the “2019 Notes”) in a private offering. The 2019 Notes are governed by the terms of an indenture between the Company and U.S. Bank National Association, as the Trustee. The 2019 Notes will mature on June 15, 2019, unless earlier purchased by the Company or converted. The 2019 Notes will not bear interest, except that the 2019 Notes will be subject to “special interest” in certain limited circumstances in the event of the failure of the Company to perform certain of its obligations under the indenture governing the 2019 Notes. The 2019 Notes are unsecured obligations and do not contain any financial covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. Certain events are also considered “events of default” under the 2019 Notes, which may result in the acceleration of the maturity of the 2019 Notes, as described in the indenture governing the 2019 Notes. The initial conversion rate applicable to the 2019 Notes is 8.6143 shares of common stock per $1,000 principal amount of 2019 Notes, which is equivalent to an initial conversion price of approximately $116.09 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change,” the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2019 Notes in connection with such make-whole fundamental change. Prior to March 15, 2019, the 2019 Notes will be convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2014, 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 fiscal quarter, the last reported sale price of the Company’s 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 2019 Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. As of May 5, 2018, none of these conditions have occurred and, as a result, the 2019 Notes are not convertible as of May 5, 2018. On and after March 15, 2019, 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 2019 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2019 Notes will be settled, at the Company’s election, in cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s 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. The Company may not redeem the 2019 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require the Company to purchase all or a portion of their 2019 Notes for cash at a price equal to 100% of the principal amount of the 2019 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2019 Notes, the Company separated the 2019 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2019 Notes and the fair value of the liability component of the 2019 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 4.51% over the expected life of the 2019 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the debt issuance costs related to the issuance of the 2019 Notes, the Company allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2019 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Debt issuance costs related to the 2019 Notes were comprised of discounts and commissions payable to the initial purchasers of $4.4 million and third party offering costs of $1.0 million. Discounts, commissions payable to the initial purchasers and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2019 balance on the condensed consolidated balance sheets. During both the three months ended May 5, 2018 and April 29, 2017, the Company recorded $0.2 million related to the amortization of debt issuance costs. The carrying values of the 2019 Notes, excluding the discounts and commissions payable to the initial purchasers and third party offering costs, are as follows ( in thousands May 5, February 3, 2018 2018 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (17,268 ) (20,988 ) Net carrying amount $ 332,732 $ 329,012 Equity component (1) $ 70,482 $ 70,482 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. The Company recorded interest expense of $3.7 million and $3.6 million for the amortization of the debt discount related to the 2019 Notes during the three months ended May 5, 2018 and April 29, 2017, respectively. 2019 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2019 Notes, the Company entered into convertible note hedge transactions whereby the Company has the option to purchase a total of approximately 3.0 million shares of its common stock at a price of approximately $116.09 per share. The total cost of the convertible note hedge transactions was $73.3 million. In addition, the Company sold warrants whereby the holders of the warrants have the option to purchase a total of approximately 3.0 million shares of the Company’s common stock at a price of $171.98 per share. The warrants contain certain adjustment mechanisms whereby the total number of shares to be purchased under such warrants may be increased up to a cap of 6.0 million shares of common stock (which cap may also be subject to adjustment). The Company received $40.4 million in cash proceeds from the sale of these warrants. Taken together, the purchase of the convertible note hedges and sale of the warrants are intended to offset any actual dilution from the conversion of the 2019 Notes and to effectively increase the overall conversion price from $116.09 per share to $171.98 per share. As these transactions meet certain accounting criteria, the convertible note hedges and warrants are recorded in stockholders’ equity, are not accounted for as derivatives and are not remeasured each reporting period. The net costs incurred in connection with the convertible note hedge and warrant transactions were recorded as a reduction to additional paid-in capital on the condensed consolidated balance sheets. The Company recorded a deferred tax liability of $27.5 million in connection with the debt discount associated with the 2019 Notes and recorded a deferred tax asset of $28.6 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax assets are included in deferred tax assets on the condensed consolidated balance sheets. |
Credit Facilities
Credit Facilities | 3 Months Ended |
May 05, 2018 | |
Debt Disclosure [Abstract] | |
Credit Facilities | NOTE 8—CREDIT FACILITIES The Company’s outstanding credit facilities were as follows ( in thousands May 5, February 3, 2018 2018 Outstanding Unamortized Debt Net Carrying Outstanding Unamortized Debt Net Carrying Amount Issuance Costs Amount Amount Issuance Costs Amount Asset based credit facility $ 219,000 $ — $ 219,000 $ 199,970 $ — $ 199,970 LILO term loan 80,000 (472 ) 79,528 80,000 (501 ) 79,499 Total credit facilities $ 299,000 $ (472 ) $ 298,528 $ 279,970 $ (501 ) $ 279,469 Asset Based Credit Facility & LILO Term Loan In August 2011, Restoration Hardware, Inc., along with its Canadian subsidiary, Restoration Hardware Canada, Inc., entered into a credit agreement with Bank of America, N.A., as administrative agent, and certain other lenders. On June 28, 2017, Restoration Hardware, Inc. entered into an eleventh amended and restated credit agreement among Restoration Hardware, Inc., Restoration Hardware Canada, Inc., various 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 “credit agreement”). The credit agreement has a revolving line of credit with availability of up to $600.0 million, of which $10.0 million is available to Restoration Hardware Canada, Inc., and includes a $200.0 million accordion feature under which the revolving line of credit may be expanded by agreement of the parties from $600.0 million to up to $800 million if and to the extent the lenders revise their credit commitments to encompass a larger facility. In addition, the credit agreement establishes an $80.0 million LILO term loan facility. The credit agreement has a maturity date of June 28, 2022. On June 12, 2018, Restoration Hardware, Inc. entered into a First Amendment (the “Amendment”) to credit agreement. The Amendment (i) changes the credit agreement’s definition of “Eligible In-Transit Inventory” to clarify the requirements to be fulfilled by the borrowers with respect to such in-transit inventory, and (ii) clarifies that no Default or Event of Default was caused by any prior non-compliance with such requirements with respect to in-transit inventory. Eligible In-Transit Inventory consists of inventory being shipped from vendor locations outside of the United States. Qualifying in-transit inventory is included within the Company’s borrowing base for eligible collateral for purposes of determining the amount of borrowing available to borrowers under the credit agreement. Borrowings under the revolving line of credit and LILO term loan facility are subject to interest, at the borrowers’ option, at either the bank’s reference rate or LIBOR (or, in the case of the revolving line of credit, the Bank of America “BA” Rate or the Canadian Prime Rate, as such terms are defined in the credit agreement, for Canadian borrowings denominated in Canadian dollars or the United States Index Rate or LIBOR for Canadian borrowings denominated in United States dollars) plus an applicable margin rate, in each case. The credit agreement contains various restrictive covenants, including, among others, limitations on the ability to incur liens, make loans or other investments, incur additional debt, issue additional equity, merge or consolidate with or into another person, sell assets, pay dividends or make other distributions, or enter into transactions with affiliates, along with other restrictions and limitations typical to credit agreements of this type and size. As of May 5, 2018, was in compliance with all applicable covenants of the credit agreement. As of May 5, 2018, the Company had $219.0 million in outstanding borrowings and $138.8 million of availability under the revolving line of credit, net of $27.8 million in outstanding letters of credit. As of May 5, 2018, the Company had $80.0 million outstanding borrowings under the LILO term loan facility. As a result of the consolidated fixed-charge coverage ratio (“FCCR”) restriction that limits the last 10% of borrowing availability, actual incremental borrowing available to the Company and the other affiliated parties under the revolving line of credit was approximately $92.2 million as of May 5, 2018. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
May 05, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | NOTE 9—FAIR VALUE OF FINANCIAL INSTRUMENTS 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 and carrying value of the 2019 Notes and 2020 Notes were as follows ( in thousands May 5, February 3, 2018 2018 Fair Value Carrying Value (1) Fair Value Carrying Value (1) Convertible senior notes due 2019 $ 327,352 $ 332,732 $ 324,866 $ 329,012 Convertible senior notes due 2020 $ 261,653 $ 260,026 $ 261,047 $ 255,865 (1) Carrying value represents the principal amount less the equity component of the 2019 Notes and 2020 Notes classified in stockholders’ equity (deficit), and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. The fair value of each of the 2019 Notes and 2020 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 the Company’s convertible notes, when available, the Company’s stock price and interest rates based on similar debt issued by parties with credit ratings similar to the Company (Level 2). The estimated fair values of the asset based credit facility and LILO term loan were $219.0 million and $80.0 million, respectively, each of which approximates cost, as of May 5, 2018. Fair value approximates cost for both the asset based credit facility and LILO term loan as the interest rate associated with each facility is variable and resets frequently. |
Income Taxes
Income Taxes | 3 Months Ended |
May 05, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10—INCOME TAXES The Company recorded income tax expense of $8.5 million and an income tax benefit of $1.9 million in the three months ended May 5, 2018 and April 29, 2017, respectively. The effective tax rate was 23.3% and 36.2% for the three months ended May 5, 2018 and April 29, 2017, respectively. The decrease in the effective tax rate is primarily due to the reduction in the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018 due to the passage of the Tax Cuts and Jobs Act (the “Tax Act”). On December 22, 2017, the Tax Act was enacted in the United States. The Company recognized the income tax effects of the Tax Act in its fiscal 2017 financial statements in accordance with Staff Accounting Bulletin 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period in which the Tax Act was signed into law. As noted in its fiscal 2017 consolidated financial statements, the Company was able to reasonably estimate certain effects and, therefore, recorded provisional amounts associated with the one-time transition tax on indefinitely reinvested foreign earnings and the adjustment to our deferred tax assets and liabilities for the reduction in the corporate income tax rate. The Company has not made any additional measurement period adjustments related to these items during the three months ended May 5, 2018. As the Company continues its analysis of the Tax Act and interprets any additional guidance, it may make adjustments to the provisional amounts that have been recorded that may materially impact the Company's provision for income taxes. As of May 5, 2018 and February 3, 2018, the Company had $8.2 million of unrecognized tax benefits, of which $6.5 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 May 5, 2018, the Company had $0.4 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
May 05, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NOTE 11—NET INCOME (LOSS) PER SHARE The weighted-average shares used for net income (loss) per share is presented in the table below. As the Company was in a net loss position for the three months ended April 29, 2017, the weighted-average shares outstanding for basic and diluted are the same. Three Months Ended May 5, April 29, 2018 2017 Weighted-average shares—basic 21,545,025 37,609,516 Effect of dilutive stock-based awards 3,685,203 — Effect of dilutive convertible senior notes (1) — — Weighted-average shares—diluted 25,230,228 37,609,516 (1) The 2019 Notes and 2020 Notes will have an impact on the Company’s dilutive share count beginning at stock prices of $116.09 per share and $118.13 per share, respectively. The following number of options and restricted stock units were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive: Three Months Ended May 5, April 29, 2018 2017 Options 486,516 8,221,249 Restricted stock units 10,500 1,029,740 Total anti-dilutive stock-based awards 497,016 9,250,989 |
Share Repurchases
Share Repurchases | 3 Months Ended |
May 05, 2018 | |
Equity [Abstract] | |
Share Repurchases | NOTE 12—SHARE REPURCHASES $300 Million Share Repurchase Program On February 21, 2017, the Company’s Board of Directors authorized a stock repurchase program of up to $300 million (the “$300 Million Repurchase Program”). Under the $300 Million Repurchase Program, the Company repurchased approximately 7.8 million shares of its common stock at an average price of $38.24 per share, for an aggregate repurchase amount of approximately $300 million, during the three months ended April 29, 2017. As the $300 Million Repurchase Program was completed during the three months ended April 29, 2017 there will be no repurchases in future periods under this repurchase authorization. Share Repurchases Under Equity Plans As of May 5, 2018 and February 3, 2018, the aggregate unpaid principal amount of the notes payable for share repurchases was $19.6 million and $19.4 million, respectively, which is included in other non-current obligations on the condensed consolidated balance sheets. During both the three months ended May 5, 2018 and April 29, 2017, the Company recorded interest expense on the outstanding notes of $0.2 million. Of the $19.6 million and $19.4 million notes payable for share repurchases outstanding as of May 5, 2018 and February 3, 2018, respectively, $15.5 million was due to a current board member of the Company. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
May 05, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 13—STOCK-BASED COMPENSATION The Company estimates the value of equity grants based upon an option-pricing model and recognizes this estimated value as compensation expense over the vesting periods. The Company recognizes expense associated with performance-based awards when it becomes probable that the performance condition will be met. Once it becomes probable that an award will vest, the Company recognizes compensation expense equal to the number of shares which are probable to vest multiplied by the fair value of the related shares measured at the grant date. Stock-based compensation expense is included in selling, general and administrative expenses on the condensed consolidated statements of operations. The Company recorded stock-based compensation expense of $8.0 million and $5.3 million during the three months ended May 5, 2018 and April 29, 2017, respectively. No stock-based compensation cost has been capitalized in the accompanying condensed consolidated financial statements. 2012 Stock Incentive Plan and 2012 Stock Option Plan As of May 5, 2018, 8,564,739 options were outstanding with a weighted-average exercise price of $50.66 per share and 6,295,895 options were vested with a weighted-average exercise price of $51.95 per share. The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of May 5, 2018 was $429.8 million, $388.2 million, and $307.0 million, respectively. Stock options exercisable as of May 5, 2018 had a weighted-average remaining contractual life of 5.90 years. As of May 5, 2018, the total unrecognized compensation expense related to unvested options was $23.4 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.86 years. As of May 5, 2018, the Company had 768,463 restricted stock units outstanding with a weighted-average grant date fair value of $52.81 per share. During the three months ended May 5, 2018, 30,615 restricted stock units vested with a weighted-average grant date and vest date fair value of $52.36 per share and $97.09 per share, respectively. As of May 5, 2018, there was $18.9 million of total unrecognized compensation expense related to unvested restricted stock and restricted stock units which is expected to be recognized over a weighted-average period of 2.81 years. Rollover Units In connection with the acquisition of Waterworks in May 2016, $1.5 million rollover units in the Waterworks subsidiary (the “Rollover Units”) were recorded as part of the transaction. The Rollover Units are subject to the terms of the Waterworks LLC agreement, including redemption rights at an amount equal to the greater of (i) the $1.5 million remitted as consideration in the business combination or (ii) an amount based on the percentage interest represented in the overall valuation of the Waterworks subsidiary (the “Appreciation Rights”). The Appreciation Rights are measured at fair value and are subject to fair value measurements during the expected life of the Rollover Units, with changes to fair value recorded in the condensed consolidated statements of operations. The fair value of the Appreciation Rights is determined based on an option pricing method (“OPM”). The Company did not record any expense related to the Appreciation Rights during the three months ended May 5, 2018 or April 29, 2017. As of both May 5, 2018 and February 3, 2018, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations on the condensed consolidated balance sheets. Profit Interests In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the condensed consolidated statements of operations. The fair value of the Profit Interests is determined based on an OPM. For both the three months ended May 5, 2018 and April 29, 2017, the Company recorded $0.1 million related to the Profit Interests, which is included in selling, general and administrative expenses on the condensed consolidated statements of operations. As of May 5, 2018 and February 3, 2018, the liability associated with the Profit Interests was $0.8 million and $0.7 million, respectively, which is included in other non-current obligations on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
May 05, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14—COMMITMENTS AND CONTINGENCIES Commitments The Company had no material off balance sheet commitments as of May 5, 2018. Contingencies The Company is involved in lawsuits, claims and proceedings incident to the ordinary course of its business. These disputes are increasing in number as the business expands and the Company grows larger. Litigation is inherently unpredictable. As a result, the outcome of matters in which the Company is involved could result in unexpected expenses and liability that could adversely affect the Company’s operations. In addition, any claims against the Company, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. The Company reviews the need for any loss contingency reserves and establishes reserves when, in the opinion of management, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that the Company does 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 the Company accrues from time to time. The Company believes that the ultimate resolution of its current matters will not have a material adverse effect on its condensed consolidated financial statements. Securities Class Action On February 2, 2017, City of Miami General Employees’ & Sanitation Employees’ Retirement Trust filed a class action complaint in the United States District Court, Northern District of California, against the Company, Gary Friedman, and Karen Boone. On March 16, 2017, Peter J. Errichiello, Jr. filed a similar class action complaint in the same forum and against the same parties. On April 26, 2017, the court consolidated the two actions. The consolidated action is captioned In re RH, Inc. Securities Litigation. An amended consolidated complaint was filed in June 2017 asserting claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The complaint asserts claims purportedly on behalf of a class of purchasers of Company common stock from March 26, 2015 to June 8, 2016. The alleged misstatements relate to statements regarding the roll out of the RH Modern product line and the Company’s inventory levels. The complaint seeks class certification, monetary damages, and other appropriate relief, including an award of costs and attorneys’ fees. On February 26, 2018, the Court filed an order denying the Company’s motion to dismiss the complaint. While the outcome of litigation is inherently uncertain, the Company and its officers intend to vigorously defend the claims and believe the complaint lacks merit . Shareholder Derivative Lawsuit On April 24, 2018, purported Company shareholder David Magnani filed a purported shareholder derivative suit in the United States District Court, Northern District of California, captioned Magnani v. Friedman et al. (No. 18-cv-02452). The suit names the Company as nominal defendant and certain current and former directors and officers as individual defendants. The allegations in the complaint substantially track those in the securities class action described above. The plaintiff brings claims against all individual defendants under Section 14(a) of the Exchange Act, as well as claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets. The complaint also includes insider trading and misappropriation of information claims against two of the individual defendants. The complaint seeks monetary damages, corporate governance changes, restitution, and an award of costs and attorneys’ fees. The Company believes that the plaintiff lacks standing to bring this derivative action. |
Segment Reporting
Segment Reporting | 3 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 15—SEGMENT REPORTING The Company defines reportable and operating segments on the same basis that it uses to evaluate performance internally by the Chief Operating Decision Maker (the “CODM”). The Company has determined that the Chief Executive Officer is its CODM. As of May 5, 2018, the Company had two operating segments: RH Segment and Waterworks. The two operating segments include all sales channels accessed by the Company’s customers, including sales through catalogs, sales through the Company’s websites, sales through stores, and sales through the commercial channel . The Company’s two operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared management team and customer base, the Company has determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. The Company uses operating income to evaluate segment profitability. Operating income is defined as net income (loss) before interest expense—net and income taxes. Segment Information The following table presents the statements of operations metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting (in thousands) Three Months Ended May 5, April 29, 2018 2017 RH Segment Waterworks Total RH Segment Waterworks Total Net revenues $ 526,007 $ 31,399 $ 557,406 $ 533,528 $ 28,552 $ 562,080 Gross profit 199,035 13,000 212,035 159,627 10,629 170,256 Depreciation and amortization 15,935 1,112 17,047 14,901 1,119 16,020 The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting (in thousands) May 5, February 3, 2018 2018 RH Segment Waterworks Total RH Segment Waterworks Total Goodwill (1) $ 124,404 $ 17,445 $ 141,849 $ 124,448 $ 17,445 $ 141,893 Trademarks and domain names 48,563 52,100 100,663 48,563 52,100 100,663 Total assets 1,621,817 127,144 1,748,961 1,608,290 124,576 1,732,866 (1) The Waterworks reporting unit goodwill is presented net of an impairment charge of $33.7 million, which was recorded in fiscal 2017. The Company uses segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) The following table presents segment operating income (loss) and income (loss) before tax ( in thousands Three Months Ended May 5, April 29, 2018 2017 Operating income (loss): RH Segment $ 53,896 $ 10,058 Waterworks (516 ) (1,782 ) Distribution center closures 2,072 — Recall accrual 254 — Post-acquisition related legal costs (1,915 ) — Impact of inventory step-up (190 ) (1,380 ) Operating income 53,601 6,896 Interest expense—net 17,035 12,179 Income (loss) before tax $ 36,566 $ (5,283 ) The Company classifies its sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor. Net revenues in each category were as follows ( in thousands Three Months Ended May 5, April 29, 2018 2017 Furniture $ 352,646 $ 352,956 Non-furniture 204,760 209,124 Total net revenues $ 557,406 $ 562,080 The Company is domiciled in the United States and primarily operates its retail and outlet stores in the United States. As of May 5, 2018, the Company operates 4 retail and 2 outlet stores in Canada and 1 retail store in the U.K. Revenues from Canadian and U.K. operations, and the long-lived assets in Canada and the U.K., are not material to the Company. Canada and U.K. geographic revenues are based upon revenues recognized at the retail store locations in the respective country. No single customer accounted for more than 10% of the Company’s revenues in the three months ended May 5, 2018 or April 29, 2017. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
May 05, 2018 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, the “Company”), is a luxury home furnishings retailer that offers a growing number of categories including furniture, lighting, textiles, bathware, décor, outdoor and garden, tableware, and child and teen furnishings. These products are sold through the Company’s stores, catalogs and websites. As of May 5, 2018, the Company operated a total of 84 retail Galleries and 32 outlet stores in 32 states, the District of Columbia and Canada, and includes 15 Waterworks showrooms in the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from the Company’s records and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state the Company’s financial position as of May 5, 2018, and the results of operations for the three months ended May 5, 2018 and April 29, 2017. The Company’s current fiscal year, which consists of 52 weeks, ends on February 2, 2019 (“fiscal 2018”). 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. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018 (the “2017 Form 10-K”). Certain prior year amounts have been reclassified for consistency with the current period presentation. This reclassification had no effect on the previously reported consolidated financial position or consolidated results of operations, and did not have a material effect on the previously reported consolidated cash flows. The results of operations for the three months ended May 5, 2018 presented herein are not necessarily indicative of the results to be expected for the full fiscal year. |
Recently Issued Accounting Standards | Revenue from Contracts with Customers In May 2014, the FASB and International Accounting Standards Board issued their converged accounting standards update on revenue recognition, Accounting Standards Update 2014-09—Revenue from Contracts with Customers (Topic 606) . This guidance outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the good or service. Under the new guidance, transfer of control is no longer the same as transfer of risks and rewards as indicated in the prior guidance. Adoption and Accounting Policy The Company adopted Topic 606 on February 4, 2018 using the modified retrospective transition method and recorded a decrease to opening retained earnings of $21.0 million, inclusive of the tax impact. Results reported within the Company’s condensed consolidated financial statements for reporting periods beginning February 4, 2018 are presented under Topic 606 while prior periods are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605 —Revenue Recognition (Topic 605) . Under Topic 606, changes were made to the recognition timing or classification of revenues and expenses for the following: Description Policy under Topic 605 Policy under Topic 606 Advertising expenses Costs associated with Source Books were capitalized and amortized over their expected period of future benefit. Expense was amortized based upon the ratio of actual revenues to the total of actual and estimated future revenues on an individual Source Book basis, generally over a twelve-month period after they were mailed. Costs associated with Source Books are expensed upon the delivery of the Source Books to the carrier. In the case of multiple printings of a Source Book, the creative costs will be expensed in full upon the initial delivery of Source Books to the carrier. Gift card breakage Recognized gift card breakage (amounts not expected to be redeemed) within selling, general and administrative expenses. Recognize gift card breakage within net revenues proportional to actual gift card redemptions. Membership revenue Annual fees for new memberships in the RH Members Program and renewals were recorded as deferred revenue when collected from customers and recognized as revenue on a straight-line basis over the twelve month membership period. Annual fees for new memberships in the RH Members Program are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, using historical trends of sales to members. RH Members Program renewal fees are recorded as deferred revenue when collected from customers and will continue to be recognized as revenue on a straight-line basis over the twelve month membership period. Revenue recognition Revenue for merchandise that is not delivered via the home-delivery channel was recognized upon delivery. Revenue for merchandise that is not delivered via the home-delivery channel will be recognized upon shipment. Allowance for sales returns Recognized an allowance for sales returns as a net liability within other current liabilities. Recognize an allowance for sales returns on a gross basis as a liability within other current liabilities and a right of return asset for merchandise within prepaid expense and other current assets. Advertising expenses — The adoption of Topic 606 materially impacts the timing of recognizing advertising expense related to direct response advertising, including costs associated with the Company’s Source Books. Under Topic 606, the Company will recognize expense associated with the Source Books upon the delivery of the Source Books to the carrier. In the case of multiple printings of a Source Book, the creative costs will be expensed in full upon the initial delivery of Source Books to the carrier. Prior to adoption of Topic 606, costs associated with Source Books were capitalized and amortized over their expected period of future benefit. Such amortization was based upon the ratio of actual revenues to the total of actual and estimated future revenues on an individual Source Book basis. Each Source Book was generally fully amortized within a twelve-month period after they were mailed and the majority of the amortization occurred within the first five to nine months, with the exception of the Holiday Source Books, which were generally fully amortized within a three-month period after they were mailed . Upon adoption of Topic 606, capitalized costs associated with Source Books of $37.8 million that had been delivered to the carrier prior to or on February 3, 2018 were reclassified to retained earnings on the consolidated balance sheets, resulting in a decrease to the opening retained earnings balance . Gift card breakage — Under Topic 606, the Company recognizes gift card breakage proportional to actual gift card redemptions and such breakage is recorded within net revenues on the condensed consolidated statements of operations. Gift card breakage was previously recorded as a reduction to selling, general and administrative expenses when the likelihood of redemption was remote. Upon adoption of Topic 606, gift card liabilities of $6.0 million were reclassified to retained earnings on the consolidated balance sheets , resulting in an increase to the opening retained earnings balance . Membership revenue — Under Topic 606, the annual fee for new memberships in the RH Members Program is recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, using historical trends of sales to members. Prior to the adoption of Topic 606, new memberships were recorded as deferred revenue when collected from customers and recognized as revenue on a straight-line basis over the twelve month membership period. This will result in a majority of revenue being recognized during the first six months of the membership period. The adoption of Topic 606 will not have an impact on membership renewal fees, which will continue to be recognized as revenue on a straight-line basis over the twelve month membership period, until the Company has more information regarding membership renewal purchasing trends. Upon adoption of Topic 606, deferred membership revenue of $3.8 million was reclassified to retained earnings on the consolidated balance sheets, resulting in an increase to the opening retained earnings balance. Revenue recognition — Under Topic 606, the Company will continue to recognize revenue for merchandise delivered via the home-delivery channel upon delivery. Under Topic 606, revenue for merchandise delivered via all other delivery channels will be recognized upon shipment , whereas previously such revenue was recognized upon delivery . Upon adoption of Topic 606, deferred revenue (net of cost of goods sold) of $1.3 million was reclassified to retained earnings on the consolidated balance sheets , resulting in an increase to the opening retained earnings balance . The Company adopted the practical expedient related to shipping and handling activities. Under this option, in instances where revenue is recognized for the related merchandise prior to delivery to customers (i.e., revenue recognized upon shipment), the related costs of shipping and handling activities will be accrued for in the same period. Costs of shipping and handling continue to be included in cost of goods sold. Allowance for sales returns — In connection with adoption of Topic 606, the Company is required to recognize its allowance for sales returns on a gross basis rather than as a net liability. Upon adoption, this resulted in an increase to prepaid and other current assets (“right of return asset for merchandise”), with a corresponding increase to other current liabilities on the consolidated balance sheets, and did not impact the consolidated statements of operations. As of May 5, 2018, the right of return asset for merchandise was $5.3 million . Sales tax collection from customers — Under Topic 606, the Company has not changed its policy regarding sales tax collected from customers. Sales tax collected is not recognized as revenue but is included in accounts payable and accrued expenses on the consolidated balance sheets as it is ultimately remitted to governmental authorities. In connection with adoption of Topic 606, the Company recorded a $6.6 million tax adjustment associated with the charges listed above to retained earnings on the consolidated balance sheets, resulting in an increase to the opening retained earnings balance . Contract Liabilities The Company defers revenue associated with merchandise delivered via the home-delivery channel. As the Company recognizes revenue when the merchandise is delivered to our customers, it is included as deferred revenue on the consolidated balance sheets while in-transit. Customer deposits represent payments made by customers on custom orders. At the time of order placement the Company collects deposits for all custom orders equivalent to 50% of the purchase price. Custom order deposits are recognized as revenue when a customer obtains control of the merchandise. In addition, the Company collects annual membership fees related to the RH Members Program. 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, using 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. The Company expects that substantially all of the deferred revenue, customer deposits and deferred membership fees as of May 5, 2018 will be recognized within the next six months as the performance obligations are satisfied. In addition, the Company defers revenue when cash payments are received in advance of performance for unsatisfied obligations related to its gift cards and merchandise credits. Customer liabilities related to gift cards and merchandise credits was $17.7 million and $24.1 million as of May 5, 2018 and February 3, 2018, respectively. As discussed above, $6.0 million of the decrease was due to the reclassification of gift card liabilities to retained earnings upon adoption of Topic 606. During the three months ended May 5, 2018, the Company recognized $4.9 million of revenue related to previous deferrals related to its gift cards and merchandise credits and recorded gift card breakage of $0.4 million. The Company expects that approximately 70% of the remaining gift card and merchandise credit liabilities will be recognized when the gift cards are redeemed by customers. Disaggregated Revenue The Company recognizes revenue from its stores and direct sales channels. Stores net revenues represent sales originating in retail stores, including Waterworks showrooms, and outlet stores. Direct net revenues include sales through the Company’s Source Books, websites, and phone orders, including its Contract business and a portion of its Trade business. During the three months ended May 5, 2018, net revenues recognized from the stores and direct sales channels were $314.5 million and $242.9 million, respectively. Adoption Impact on Fiscal 2018 Results The following table summarizes the impact of adopting Topic 606 on the Company’s condensed consolidated statements of operations ( in thousands Three Months Ended May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Net revenues $ 557,406 $ (7,610 ) $ 549,796 Cost of goods sold 345,371 (2,988 ) 342,383 Gross profit 212,035 (4,622 ) 207,413 Selling, general and administrative expenses 158,434 3,803 162,237 Income from operations 53,601 (8,425 ) 45,176 Interest expense—net 17,035 — 17,035 Income before income taxes 36,566 (8,425 ) 28,141 Income tax expense 8,507 (1,950 ) 6,557 Net income $ 28,059 $ (6,475 ) $ 21,584 The following table summarizes the impact of adopting Topic 606 on certain line items of the Company’s condensed consolidated balance sheets ( in thousands As of May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Prepaid expense and other current assets $ 60,064 $ 27,652 $ 87,716 Deferred tax assets 30,014 (6,561 ) 23,453 Accounts payable and accrued expenses 264,173 (638 ) 263,535 Deferred revenue and customer deposits 172,379 9,463 181,842 Other current liabilities 59,944 (2,295 ) 57,649 Retained earnings 159,417 14,561 173,978 Financial Instruments In January 2016, the FASB issued Accounting Standards Update 2016-01—Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, Cash Flow Classification In August 2016, the FASB issued Accounting Standards Update No. 2016-15—Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued Accounting Standards Update No. 2016-18—Statement of Cash Flows (Topic 230): Restricted Cash Income Taxes: Intra-Entity Asset Transfers In October 2016, the FASB issued Accounting Standards Update No. 2016-16—Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory Stock-Based Compensation In May 2017, the FASB issued Accounting Standards Update No. 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . The new guidance clarifies when modification accounting should be applied for changes to terms or conditions of a share-based payment award. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. The standard will be applied prospectively. The Company adopted this new accounting standard in the first quarter of fiscal 2018 and such adoption did not have an impact on its consolidated financial statements . Accounting for Leases In February 2016, the FASB issued Accounting Standards Update 2016-02—Leases, |
Commitments and Contingencies | The Company reviews the need for any loss contingency reserves and establishes reserves when, in the opinion of management, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that the Company does 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 the Company accrues from time to time. The Company believes that the ultimate resolution of its current matters will not have a material adverse effect on its condensed consolidated financial statements. |
Recently Issued Accounting St23
Recently Issued Accounting Standards (Tables) | 3 Months Ended |
May 05, 2018 | |
Accounting Standards Update 2014-09 [Member] | |
Summary of Impact of Adopting Topic 606 Condensed Consolidated Statements of Operations and Balance Sheets | The following table summarizes the impact of adopting Topic 606 on the Company’s condensed consolidated statements of operations ( in thousands Three Months Ended May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Net revenues $ 557,406 $ (7,610 ) $ 549,796 Cost of goods sold 345,371 (2,988 ) 342,383 Gross profit 212,035 (4,622 ) 207,413 Selling, general and administrative expenses 158,434 3,803 162,237 Income from operations 53,601 (8,425 ) 45,176 Interest expense—net 17,035 — 17,035 Income before income taxes 36,566 (8,425 ) 28,141 Income tax expense 8,507 (1,950 ) 6,557 Net income $ 28,059 $ (6,475 ) $ 21,584 The following table summarizes the impact of adopting Topic 606 on certain line items of the Company’s condensed consolidated balance sheets ( in thousands As of May 5, 2018 As Reported Adjustments Balances without Adoption of Topic 606 Prepaid expense and other current assets $ 60,064 $ 27,652 $ 87,716 Deferred tax assets 30,014 (6,561 ) 23,453 Accounts payable and accrued expenses 264,173 (638 ) 263,535 Deferred revenue and customer deposits 172,379 9,463 181,842 Other current liabilities 59,944 (2,295 ) 57,649 Retained earnings 159,417 14,561 173,978 |
Prepaid Expense and Other Ass24
Prepaid Expense and Other Assets (Tables) | 3 Months Ended |
May 05, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following ( in thousands May 5, February 3, 2018 2018 Vendor deposits $ 20,896 $ 9,701 Capitalized catalog costs 15,965 44,122 Right of return asset for merchandise 5,296 — Prepaid expense and other current assets 17,907 14,762 Total prepaid expense and other current assets $ 60,064 $ 68,585 |
Schedule of Other Non-Current Assets | Other non-current assets consist of the following ( in thousands May 5, February 3, 2018 2018 Deferred financing fees $ 4,194 $ 4,446 Construction related deposits 1,883 7,407 Other deposits 5,006 4,997 Other non-current assets 3,837 4,482 Total other non-current assets $ 14,920 $ 21,332 |
Goodwill and Trademarks and D25
Goodwill and Trademarks and Domain Names (Tables) | 3 Months Ended |
May 05, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Trademarks and Domain Names Activity | The following sets forth the goodwill and trademarks and domain names activity for the RH Segment and Waterworks for the three months ended May 5, 2018 ( in thousands Foreign February 3, Currency May 5, 2018 Translation 2018 RH Segment Goodwill $ 124,448 $ (44 ) $ 124,404 Trademarks and domain names 48,563 — 48,563 Waterworks Goodwill (1) 17,445 — 17,445 Trademarks 52,100 — 52,100 (1) T he Waterworks reporting unit goodwill is presented net of an impairment charge of $33.7 million, which was recorded in fiscal 2017 |
Accounts Payable, Accrued Exp26
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
May 05, 2018 | |
Payables And Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following ( in thousands May 5, February 3, 2018 2018 Accounts payable $ 166,044 $ 195,313 Accrued compensation 31,250 47,534 Accrued freight and duty 18,219 23,757 Accrued sales taxes 17,674 19,525 Accrued occupancy 9,909 8,612 Accrued catalog costs 7,037 9,000 Accrued professional fees 2,960 3,555 Other accrued expenses 11,080 11,469 Total accounts payable and accrued expenses $ 264,173 $ 318,765 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following ( in thousands May 5, February 3, 2018 2018 Allowance for sales returns $ 17,887 $ 10,565 Unredeemed gift card and merchandise credit liability 17,673 24,138 Federal and state tax payable 13,478 5,391 Current portion of non-current debt 6,080 6,033 Product recall reserves 1,029 1,201 Other current liabilities 3,797 3,838 Total other current liabilities $ 59,944 $ 51,166 |
Other Non-Current Obligations (
Other Non-Current Obligations (Tables) | 3 Months Ended |
May 05, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Non-Current Obligations | Other non-current obligations consist of the following ( in thousands May 5, February 3, 2018 2018 Notes payable for share repurchases $ 19,633 $ 19,390 Equipment security notes (1) 12,676 13,864 Promissory note (2) 11,285 11,627 Lease loss liabilities 8,344 9,684 Capital lease obligations—non-current 7,389 7,509 Deferred contract incentive (3) 4,762 5,358 Unrecognized tax benefits 3,764 3,728 Rollover units and profit interests (4) 2,317 2,211 Other non-current obligations 3,078 2,996 Total other non-current obligations $ 73,248 $ 76,367 (1) Represents the non-current portion of equipment security notes secured by certain of the Company’s distribution center property and equipment. (2) Represents the non-current portion of a promissory note secured by the Company’s aircraft. (3) Represents the non-current portion of an incentive payment received in relation to a 5-year service agreement. The amount will be amortized over the term of the agreement. (4) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 13 — Stock-Based Compensation |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
May 05, 2018 | |
Convertible Senior Notes Due 2020 [Member] | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying values of the 2020 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands May 5, February 3, 2018 2018 Liability component Principal $ 300,000 $ 300,000 Less: Debt discount (39,974 ) (44,135 ) Net carrying amount $ 260,026 $ 255,865 Equity component (1) $ 84,003 $ 84,003 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. |
Convertible Senior Notes Due 2019 [Member] | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying values of the 2019 Notes, excluding the discounts and commissions payable to the initial purchasers and third party offering costs, are as follows ( in thousands May 5, February 3, 2018 2018 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (17,268 ) (20,988 ) Net carrying amount $ 332,732 $ 329,012 Equity component (1) $ 70,482 $ 70,482 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 3 Months Ended |
May 05, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities | The Company’s outstanding credit facilities were as follows ( in thousands May 5, February 3, 2018 2018 Outstanding Unamortized Debt Net Carrying Outstanding Unamortized Debt Net Carrying Amount Issuance Costs Amount Amount Issuance Costs Amount Asset based credit facility $ 219,000 $ — $ 219,000 $ 199,970 $ — $ 199,970 LILO term loan 80,000 (472 ) 79,528 80,000 (501 ) 79,499 Total credit facilities $ 299,000 $ (472 ) $ 298,528 $ 279,970 $ (501 ) $ 279,469 |
Fair Value of Financial Instr30
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
May 05, 2018 | |
Fair Value Disclosures [Abstract] | |
Estimated Fair Value and Carrying Value of Notes | The estimated fair value and carrying value of the 2019 Notes and 2020 Notes were as follows ( in thousands May 5, February 3, 2018 2018 Fair Value Carrying Value (1) Fair Value Carrying Value (1) Convertible senior notes due 2019 $ 327,352 $ 332,732 $ 324,866 $ 329,012 Convertible senior notes due 2020 $ 261,653 $ 260,026 $ 261,047 $ 255,865 (1) Carrying value represents the principal amount less the equity component of the 2019 Notes and 2020 Notes classified in stockholders’ equity (deficit), and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
May 05, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Shares Used for Net Income (Loss) per Share | The weighted-average shares used for net income (loss) per share is presented in the table below. As the Company was in a net loss position for the three months ended April 29, 2017, the weighted-average shares outstanding for basic and diluted are the same. Three Months Ended May 5, April 29, 2018 2017 Weighted-average shares—basic 21,545,025 37,609,516 Effect of dilutive stock-based awards 3,685,203 — Effect of dilutive convertible senior notes (1) — — Weighted-average shares—diluted 25,230,228 37,609,516 (1) The 2019 Notes and 2020 Notes will have an impact on the Company’s dilutive share count beginning at stock prices of $116.09 per share and $118.13 per share, respectively. |
Anti-Dilutive Securities Excluded from Diluted Net Income (Loss) per Share | The following number of options and restricted stock units were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive: Three Months Ended May 5, April 29, 2018 2017 Options 486,516 8,221,249 Restricted stock units 10,500 1,029,740 Total anti-dilutive stock-based awards 497,016 9,250,989 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
May 05, 2018 | |
Segment Reporting [Abstract] | |
Summary of Statements of Operations Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting | The following table presents the statements of operations metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting (in thousands) Three Months Ended May 5, April 29, 2018 2017 RH Segment Waterworks Total RH Segment Waterworks Total Net revenues $ 526,007 $ 31,399 $ 557,406 $ 533,528 $ 28,552 $ 562,080 Gross profit 199,035 13,000 212,035 159,627 10,629 170,256 Depreciation and amortization 15,935 1,112 17,047 14,901 1,119 16,020 |
Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting | The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting (in thousands) May 5, February 3, 2018 2018 RH Segment Waterworks Total RH Segment Waterworks Total Goodwill (1) $ 124,404 $ 17,445 $ 141,849 $ 124,448 $ 17,445 $ 141,893 Trademarks and domain names 48,563 52,100 100,663 48,563 52,100 100,663 Total assets 1,621,817 127,144 1,748,961 1,608,290 124,576 1,732,866 (1) The Waterworks reporting unit goodwill is presented net of an impairment charge of $33.7 million, which was recorded in fiscal 2017. |
Schedule of Segment Operating Income (Loss) and Income (Loss) Before Tax | The following table presents segment operating income (loss) and income (loss) before tax ( in thousands Three Months Ended May 5, April 29, 2018 2017 Operating income (loss): RH Segment $ 53,896 $ 10,058 Waterworks (516 ) (1,782 ) Distribution center closures 2,072 — Recall accrual 254 — Post-acquisition related legal costs (1,915 ) — Impact of inventory step-up (190 ) (1,380 ) Operating income 53,601 6,896 Interest expense—net 17,035 12,179 Income (loss) before tax $ 36,566 $ (5,283 ) |
Net Revenues | Net revenues in each category were as follows ( in thousands Three Months Ended May 5, April 29, 2018 2017 Furniture $ 352,646 $ 352,956 Non-furniture 204,760 209,124 Total net revenues $ 557,406 $ 562,080 |
The Company - Additional Inform
The Company - Additional Information (Detail) | May 05, 2018GalleryStoreStateShowroom |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of retail Galleries | Gallery | 84 |
Number of outlet stores | Store | 32 |
Number of states | State | 32 |
Number of waterworks showrooms | Showroom | 15 |
Recently Issued Accounting St34
Recently Issued Accounting Standards - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 04, 2018 | May 05, 2018 | Apr. 29, 2017 | Feb. 03, 2018 | Jan. 28, 2017 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Gift card liabilities | $ 17,673 | $ 24,138 | |||
Right of return for asset merchandise | $ 5,296 | ||||
Customer deposits | 50.00% | ||||
Revenue recognized on membership period | 1 year | ||||
Deferred revenue, revenue recognized | $ 4,900 | ||||
Gift card breakage | 400 | ||||
Net revenue recognized | 557,406 | ||||
Cash and cash equivalents and restricted cash equivalents | 22,679 | $ 99,370 | 25,314 | $ 115,067 | |
Stores [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Net revenue recognized | 314,500 | ||||
Direct Sales [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Net revenue recognized | $ 242,900 | ||||
Deferred Revenue, Customer Deposits and Deferred Membership Fees [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Expected satisfied period for recognized of performance obligation | 6 months | ||||
Gift Card and Merchandise Credit [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Percentage of remaining revenue recognized on gift card and merchandise credit | 70.00% | ||||
Accounting Standards Update 2014-09 [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Right of return for asset merchandise | $ 5,300 | ||||
Tax adjustment to retained earnings | 6,600 | ||||
Accounting Standards Update 2014-09 [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Decrease to cumulative effect adjustment of retained earnings | $ (21,000) | ||||
Capitalized catalog cost | $ 37,800 | ||||
Gift card liabilities | 6,000 | ||||
Deferred membership revenue | 3,800 | ||||
Deferred revenue | $ 1,300 | ||||
Net revenue recognized | $ (7,610) | ||||
Accounting Standards Update 2016-18 [Member] | |||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||||
Cash and cash equivalents and restricted cash equivalents | 19,200 | $ 28,000 | |||
Increase in capital expenditures | $ 7,700 |
Recently Issued Accounting St35
Recently Issued Accounting Standards - Summary of Impact of Adopting Topic 606 Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Net revenue recognized | $ 557,406 | |
Cost of goods sold | 345,371 | $ 391,824 |
Gross profit | 212,035 | 170,256 |
Selling, general and administrative expenses | 158,434 | 163,360 |
Income from operations | 53,601 | 6,896 |
Interest expense—net | 17,035 | 12,179 |
Income before income taxes | 36,566 | (5,283) |
Income tax expense (benefit) | 8,507 | (1,913) |
Net income (loss) | 28,059 | $ (3,370) |
Adjustments [Member] | Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Net revenue recognized | (7,610) | |
Cost of goods sold | (2,988) | |
Gross profit | (4,622) | |
Selling, general and administrative expenses | 3,803 | |
Income from operations | (8,425) | |
Income before income taxes | (8,425) | |
Income tax expense (benefit) | (1,950) | |
Net income (loss) | (6,475) | |
Balances without Adoption of Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Net revenue recognized | 549,796 | |
Cost of goods sold | 342,383 | |
Gross profit | 207,413 | |
Selling, general and administrative expenses | 162,237 | |
Income from operations | 45,176 | |
Interest expense—net | 17,035 | |
Income before income taxes | 28,141 | |
Income tax expense (benefit) | 6,557 | |
Net income (loss) | $ 21,584 |
Recently Issued Accounting St36
Recently Issued Accounting Standards - Summary of Impact of Adopting Topic 606 Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Prepaid expense and other current assets | $ 60,064 | $ 68,585 |
Deferred tax assets | 30,014 | 23,311 |
Accounts payable and accrued expenses | 264,173 | 318,765 |
Deferred revenue and customer deposits | 172,379 | 149,404 |
Other current liabilities | 59,944 | 51,166 |
Retained earnings | 159,417 | $ 152,394 |
Adjustments [Member] | Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Prepaid expense and other current assets | 27,652 | |
Deferred tax assets | (6,561) | |
Accounts payable and accrued expenses | (638) | |
Deferred revenue and customer deposits | 9,463 | |
Other current liabilities | (2,295) | |
Retained earnings | 14,561 | |
Balances without Adoption of Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||
Prepaid expense and other current assets | 87,716 | |
Deferred tax assets | 23,453 | |
Accounts payable and accrued expenses | 263,535 | |
Deferred revenue and customer deposits | 181,842 | |
Other current liabilities | 57,649 | |
Retained earnings | $ 173,978 |
Prepaid Expense and Other Ass37
Prepaid Expense and Other Assets - Prepaid Expense and Other Current Assets (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Vendor deposits | $ 20,896 | $ 9,701 |
Capitalized catalog costs | 15,965 | 44,122 |
Right of return asset for merchandise | 5,296 | |
Prepaid expense and other current assets | 17,907 | 14,762 |
Total prepaid expense and other current assets | $ 60,064 | $ 68,585 |
Prepaid Expense And Other Ass38
Prepaid Expense And Other Assets - Schedule of Other Non-Current Assets (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Other Assets Noncurrent [Abstract] | ||
Deferred financing fees | $ 4,194 | $ 4,446 |
Construction related deposits | 1,883 | 7,407 |
Other deposits | 5,006 | 4,997 |
Other non-current assets | 3,837 | 4,482 |
Total other non-current assets | $ 14,920 | $ 21,332 |
Goodwill and Trademarks and D39
Goodwill and Trademarks and Domain Names - Goodwill and Trademarks and Domain Names Activity (Detail) $ in Thousands | 3 Months Ended |
May 05, 2018USD ($) | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |
Beginning Balance | $ 141,893 |
Ending Balance | 141,849 |
Beginning Balance | 100,663 |
Ending Balance | 100,663 |
RH Segment [Member] | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |
Beginning Balance | 124,448 |
Foreign Currency Translation | (44) |
Ending Balance | 124,404 |
Beginning Balance | 48,563 |
Ending Balance | 48,563 |
Waterworks [Member] | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | |
Beginning Balance | 17,445 |
Ending Balance | 17,445 |
Beginning Balance | 52,100 |
Ending Balance | $ 52,100 |
Goodwill and Trademarks and D40
Goodwill and Trademarks and Domain Names - Goodwill and Trademarks and Domain Names Activity (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Waterworks [Member] | |
Finite Lived Intangible Assets [Line Items] | |
Goodwill impairment charge | $ 33.7 |
Accounts Payable, Accrued Exp41
Accounts Payable, Accrued Expenses and Other Current Liabilities - Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Payables And Accruals [Abstract] | ||
Accounts payable | $ 166,044 | $ 195,313 |
Accrued compensation | 31,250 | 47,534 |
Accrued freight and duty | 18,219 | 23,757 |
Accrued sales taxes | 17,674 | 19,525 |
Accrued occupancy | 9,909 | 8,612 |
Accrued catalog costs | 7,037 | 9,000 |
Accrued professional fees | 2,960 | 3,555 |
Other accrued expenses | 11,080 | 11,469 |
Total accounts payable and accrued expenses | $ 264,173 | $ 318,765 |
Accounts Payable, Accrued Exp42
Accounts Payable, Accrued Expenses and Other Current Liabilities - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Payables And Accruals [Abstract] | ||
Allowance for sales returns | $ 17,887 | $ 10,565 |
Unredeemed gift card and merchandise credit liability | 17,673 | 24,138 |
Federal and state tax payable | 13,478 | 5,391 |
Current portion of non-current debt | 6,080 | 6,033 |
Product recall reserves | 1,029 | 1,201 |
Other current liabilities | 3,797 | 3,838 |
Total other current liabilities | $ 59,944 | $ 51,166 |
Other Non-Current Obligations -
Other Non-Current Obligations - Schedule of Other Non-Current Obligations (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 | |
Other Liabilities Noncurrent [Abstract] | |||
Notes payable for share repurchases | $ 19,633 | $ 19,390 | |
Equipment security notes | [1] | 12,676 | 13,864 |
Promissory note | [2] | 11,285 | 11,627 |
Lease loss liabilities | 8,344 | 9,684 | |
Capital lease obligations—non-current | 7,389 | 7,509 | |
Deferred contract incentive | [3] | 4,762 | 5,358 |
Unrecognized tax benefits | 3,764 | 3,728 | |
Rollover units and profit interests | [4] | 2,317 | 2,211 |
Other non-current obligations | 3,078 | 2,996 | |
Total other non-current obligations | $ 73,248 | $ 76,367 | |
[1] | Represents the non-current portion of equipment security notes secured by certain of the Company’s distribution center property and equipment. | ||
[2] | Represents the non-current portion of a promissory note secured by the Company’s aircraft. | ||
[3] | Represents the non-current portion of an incentive payment received in relation to a 5-year service agreement. The amount will be amortized over the term of the agreement. | ||
[4] | Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 13—Stock-Based Compensation. |
Other Non-Current Obligations44
Other Non-Current Obligations - Schedule of Other Non-Current Obligations (Parenthetical) (Detail) | 3 Months Ended |
May 05, 2018 | |
Other Liabilities Noncurrent [Abstract] | |
Incentive payment service agreement period | 5 years |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | ||||
Jun. 30, 2015USD ($)dDerivative$ / shares$ / Derivativeshares | Jun. 30, 2014USD ($)dDerivative$ / shares$ / Derivativeshares | May 05, 2018USD ($)$ / shares | Apr. 29, 2017USD ($) | Feb. 03, 2018USD ($) | Jul. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||||
Amortization of debt discount | $ 7,881,000 | $ 7,458,000 | ||||
Convertible Senior Notes Due 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | 300,000,000 | $ 300,000,000 | ||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | |||||
Debt instrument, effective interest rate | 6.47% | |||||
Discounts and commissions payable | $ 3,800,000 | 39,974,000 | 44,135,000 | |||
Third party offering costs | $ 2,300,000 | |||||
Amortization of debt issuance costs | 300,000 | 300,000 | ||||
Amortization of debt discount | $ 4,200,000 | 3,900,000 | ||||
Warrants sold to purchase common stock | shares | 2,500,000 | |||||
Cash proceeds from sale of warrants | $ 30,400,000 | |||||
Warrants price per share | $ / shares | $ 189 | |||||
Convertible Senior Notes Due 2020 [Member] | Convertible Bond Hedge and Warrant Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Conversion price per share | $ / shares | $ 189 | |||||
Convertible note hedge, number of shares | Derivative | 2,500,000 | |||||
Convertible note hedge, price per share | $ / Derivative | 118.13 | |||||
Convertible note hedge, description | The Company entered into convertible note hedge transactions whereby the Company has the option to purchase a total of approximately 2.5 million shares of its common stock at a price of approximately $118.13 per share | |||||
Convertible note hedge, inception Date | Jun. 30, 2015 | |||||
Total cost of convertible note hedge transactions | $ 68,300,000 | |||||
Deferred tax liability | $ 32,800,000 | |||||
Deferred tax asset | $ 26,600,000 | |||||
Convertible Senior Notes Due 2020 [Member] | Convertible Bond Hedge and Warrant Transactions [Member] | Warrants Subject to Certain Adjustment Mechanisms [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Warrants sold to purchase common stock | shares | 5,100,000 | |||||
Convertible Senior Notes Due 2020 [Member] | Convertible Debt Instrument Conversion Period One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible trading days | d | 20 | |||||
Debt instrument, convertible consecutive trading days | d | 30 | |||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||
Convertible Senior Notes Due 2020 [Member] | Convertible Debt Instrument Conversion Period Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible trading days | d | 5 | |||||
Debt instrument, convertible consecutive trading days | d | 10 | |||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||
Convertible Senior Notes Due 2020 [Member] | Convertible Debt Instrument Conversion Period Three [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible earliest date | Mar. 15, 2020 | |||||
Convertible Senior Notes Due 2020 [Member] | Common Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, initial conversion rate | 8.4656 | |||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
Conversion price per share | $ / shares | $ 118.13 | $ 118.13 | ||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2020 Notes is 8.4656 shares of common stock per $1,000 principal amount of 2020 Notes, which is equivalent to an initial conversion price of approximately $118.13 per share. | |||||
Convertible Senior Notes Due 2019 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | $ 350,000,000 | 350,000,000 | ||||
Debt instrument, convertible earliest date | Mar. 15, 2019 | |||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | |||||
Debt instrument, effective interest rate | 4.51% | |||||
Discounts and commissions payable | $ 4,400,000 | $ 17,268,000 | $ 20,988,000 | |||
Third party offering costs | $ 1,000,000 | |||||
Amortization of debt issuance costs | 200,000 | 200,000 | ||||
Amortization of debt discount | $ 3,700,000 | $ 3,600,000 | ||||
Warrants sold to purchase common stock | shares | 3,000,000 | |||||
Cash proceeds from sale of warrants | $ 40,400,000 | |||||
Warrants price per share | $ / shares | $ 171.98 | |||||
Convertible Senior Notes Due 2019 [Member] | Convertible Bond Hedge and Warrant Transactions [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Convertible note hedge, number of shares | Derivative | 3,000,000 | |||||
Convertible note hedge, price per share | $ / Derivative | 116.09 | |||||
Convertible note hedge, description | the Company entered into convertible note hedge transactions whereby the Company has the option to purchase a total of approximately 3.0 million shares of its common stock at a price of approximately $116.09 per share. | |||||
Total cost of convertible note hedge transactions | $ 73,300,000 | |||||
Deferred tax liability | $ 27,500,000 | |||||
Deferred tax asset | $ 28,600,000 | |||||
Conversion price per share, two | $ / shares | $ 171.98 | |||||
Convertible Senior Notes Due 2019 [Member] | Convertible Bond Hedge and Warrant Transactions [Member] | Warrants Subject to Certain Adjustment Mechanisms [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Warrants sold to purchase common stock | shares | 6,000,000 | |||||
Convertible Senior Notes Due 2019 [Member] | Convertible Debt Instrument Conversion Period One [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible trading days | d | 20 | |||||
Debt instrument, convertible consecutive trading days | d | 30 | |||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||
Convertible Senior Notes Due 2019 [Member] | Convertible Debt Instrument Conversion Period Two [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible trading days | d | 5 | |||||
Debt instrument, convertible consecutive trading days | d | 10 | |||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||
Convertible Senior Notes Due 2019 [Member] | Convertible Debt Instrument Conversion Period Three [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible earliest date | Mar. 15, 2019 | |||||
Convertible Senior Notes Due 2019 [Member] | Common Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, initial conversion rate | 8.6143 | |||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
Conversion price per share | $ / shares | $ 116.09 | $ 116.09 | ||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2019 Notes is 8.6143 shares of common stock per $1,000 principal amount of 2019 Notes, which is equivalent to an initial conversion price of approximately $116.09 per share | |||||
Private Placement [Member] | Convertible Senior Notes Due 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | $ 250,000,000 | |||||
Debt instrument, interest rate | 0.00% | |||||
Debt instrument, maturity date | Jul. 15, 2020 | |||||
Private Placement [Member] | Convertible Senior Notes Due 2019 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | $ 350,000,000 | |||||
Debt instrument, interest rate | 0.00% | |||||
Debt instrument, maturity date | Jun. 15, 2019 | |||||
Exercise of Over Allotment Option in Private Placement [Member] | Convertible Senior Notes Due 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, principal amount | $ 50,000,000 |
Convertible Senior Notes - Carr
Convertible Senior Notes - Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs (Detail) - Convertible Senior Notes Due 2020 [Member] - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 | Jun. 30, 2015 |
Liability component | |||
Principal | $ 300,000 | $ 300,000 | |
Less: Debt discount | (39,974) | (44,135) | $ (3,800) |
Net carrying amount | 260,026 | 255,865 | |
Equity component | $ 84,003 | $ 84,003 |
Convertible Senior Notes - Ca47
Convertible Senior Notes - Carrying Value of Notes Excluding the Discounts and Commissions Payable to the Initial Purchasers and Third Party Offering Costs (Detail) - Convertible Senior Notes Due 2019 [Member] - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 | Jun. 30, 2014 |
Liability component | |||
Principal | $ 350,000 | $ 350,000 | |
Less: Debt discount | (17,268) | (20,988) | $ (4,400) |
Net carrying amount | 332,732 | 329,012 | |
Equity component | $ 70,482 | $ 70,482 |
Credit Facilities - Schedule of
Credit Facilities - Schedule of Credit Facilities (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Line Of Credit Facility [Line Items] | ||
Credit facilities, Outstanding Amount | $ 299,000 | $ 279,970 |
Credit facilities, Unamortized Debt Issuance Costs | (472) | (501) |
Credit facilities, Net Carrying Amount | 298,528 | 279,469 |
Asset Based Credit Facility [Member] | ||
Line Of Credit Facility [Line Items] | ||
Credit facilities, Outstanding Amount | 219,000 | 199,970 |
Credit facilities, Net Carrying Amount | 219,000 | 199,970 |
LILO Term Loan [Member] | ||
Line Of Credit Facility [Line Items] | ||
Credit facilities, Outstanding Amount | 80,000 | 80,000 |
Credit facilities, Unamortized Debt Issuance Costs | (472) | (501) |
Credit facilities, Net Carrying Amount | $ 79,528 | $ 79,499 |
Credit Facilities - Additional
Credit Facilities - Additional Information (Detail) - USD ($) | Jun. 28, 2017 | May 05, 2018 | Feb. 03, 2018 |
Line Of Credit Facility [Line Items] | |||
Revolving line of credit, interest rate description | Borrowings under the revolving line of credit and LILO term loan facility are subject to interest, at the borrowers’ option, at either the bank’s reference rate or LIBOR (or, in the case of the revolving line of credit, the Bank of America “BA” Rate or the Canadian Prime Rate, as such terms are defined in the credit agreement, for Canadian borrowings denominated in Canadian dollars or the United States Index Rate or LIBOR for Canadian borrowings denominated in United States dollars) plus an applicable margin rate, in each case. | ||
Outstanding revolving line of credit | $ 298,528,000 | $ 279,469,000 | |
Amounts outstanding under credit facilities | $ 299,000,000 | 279,970,000 | |
Fixed charge coverage ratio covenant, percentage of borrowing base | 10.00% | ||
Incremental borrowing available after maintaining fixed charge coverage ratio | $ 92,200,000 | ||
Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Agreement, date | Jun. 28, 2017 | ||
Revolving Credit Facility [Member] | |||
Line Of Credit Facility [Line Items] | |||
Availability under the revolving line of credit | $ 138,800,000 | ||
Outstanding revolving line of credit | 219,000,000 | ||
Outstanding letters of credit | 27,800,000 | ||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Maximum [Member] | |||
Line Of Credit Facility [Line Items] | |||
Availability under the revolving line of credit | $ 600,000,000 | ||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Minimum [Member] | |||
Line Of Credit Facility [Line Items] | |||
Line of credit | 600,000,000 | ||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Scenario, Plan Subject to Satisfaction of Conditions [Member] | |||
Line Of Credit Facility [Line Items] | |||
Increase in revolving line of credit | 200,000,000 | ||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Scenario, Plan Subject to Satisfaction of Conditions [Member] | Maximum [Member] | |||
Line Of Credit Facility [Line Items] | |||
Line of credit | 800,000,000 | ||
Revolving Credit Facility [Member] | Credit Agreement [Member] | Restoration Hardware Canada, Inc. [Member] | |||
Line Of Credit Facility [Line Items] | |||
Availability under the revolving line of credit | 10,000,000 | ||
LILO Term Loan Facility [Member] | |||
Line Of Credit Facility [Line Items] | |||
Outstanding revolving line of credit | 79,528,000 | 79,499,000 | |
Amounts outstanding under credit facilities | $ 80,000,000 | $ 80,000,000 | |
LILO Term Loan Facility [Member] | Credit Agreement [Member] | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 80,000,000 |
Fair Value of Financial Instr50
Fair Value of Financial Instruments - Estimated Fair Value and Carrying Value of 2019 and 2020 Notes (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Convertible Senior Notes Due 2019 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Convertible senior notes, Fair Value | $ 327,352 | $ 324,866 |
Convertible senior notes, Carrying Value | 332,732 | 329,012 |
Convertible Senior Notes Due 2020 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Convertible senior notes, Fair Value | 261,653 | 261,047 |
Convertible senior notes, Carrying Value | $ 260,026 | $ 255,865 |
Fair Value of Financial Instr51
Fair Value of Financial Instruments - Additional Information (Detail) - Estimated Fair Value [Member] $ in Millions | May 05, 2018USD ($) |
Asset Based Credit Facility [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Estimated fair values of term loan | $ 219 |
LILO Term Loan [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Estimated fair values of term loan | $ 80 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense (benefit) | $ 8,507 | $ (1,913) | |
Effective income tax rate | 23.30% | 36.20% | |
U.S. corporate income tax rate | 21.00% | 35.00% | |
Unrecognized tax benefits | $ 8,200 | $ 8,200 | |
Tax expense and the effective tax rate, if recognized | 6,500 | $ 6,500 | |
Exposures related to unrecognized tax benefits | $ 400 | ||
Period of unrecognized tax benefits change | 12 months |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Weighted-Average Shares Used for Net Income (Loss) per Share (Detail) - shares | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Earnings Per Share [Abstract] | ||
Weighted-average shares—basic | 21,545,025 | 37,609,516 |
Effect of dilutive stock-based awards | 3,685,203 | |
Weighted-average shares—diluted | 25,230,228 | 37,609,516 |
Net Income (Loss) Per Share -54
Net Income (Loss) Per Share - Schedule of Weighted-Average Shares Used for Net Income (Loss) per Share (Parenthetical) (Detail) - Common Stock [Member] - $ / shares | May 05, 2018 | Jun. 30, 2015 | Jun. 30, 2014 |
Convertible Senior Notes Due 2019 [Member] | |||
Earnings Per Share Diluted [Line Items] | |||
Conversion price per share | $ 116.09 | $ 116.09 | |
Convertible Senior Notes Due 2020 [Member] | |||
Earnings Per Share Diluted [Line Items] | |||
Conversion price per share | $ 118.13 | $ 118.13 |
Net Income (Loss) Per Share - A
Net Income (Loss) Per Share - Anti-Dilutive Securities Excluded from Diluted Net Income (Loss) per Share (Detail) - shares | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options and restricted stock units were excluded from calculation of diluted net earnings share | 497,016 | 9,250,989 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options and restricted stock units were excluded from calculation of diluted net earnings share | 486,516 | 8,221,249 |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options and restricted stock units were excluded from calculation of diluted net earnings share | 10,500 | 1,029,740 |
Share Repurchases - Additional
Share Repurchases - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | |||
May 05, 2018 | Apr. 29, 2017 | Feb. 03, 2018 | Feb. 21, 2017 | |
Equity Class Of Treasury Stock [Line Items] | ||||
Unpaid principal amount of notes payable for share repurchases | $ 19,633,000 | $ 19,390,000 | ||
$300 Million Repurchase Program [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Shares of common stock purchased under repurchase program, shares | 7.8 | |||
Shares of common stock purchased at an average price per share under repurchase program | $ 38.24 | |||
Shares of common stock purchased under repurchase program | $ 300,000,000 | |||
Share Repurchases Under Equity Plans [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Unpaid principal amount of notes payable for share repurchases | 19,600,000 | 19,400,000 | ||
Interest expense related to notes payable for share repurchases | 200,000 | $ 200,000 | ||
Board of Directors [Member] | Maximum [Member] | $300 Million Repurchase Program [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Stock repurchase program authorized amount | $ 300,000,000 | |||
Director [Member] | Share Repurchases Under Equity Plans [Member] | ||||
Equity Class Of Treasury Stock [Line Items] | ||||
Unpaid principal amount of notes payable for share repurchases | $ 15,500,000 | $ 15,500,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
May 05, 2018 | Apr. 29, 2017 | Feb. 03, 2018 | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 7,997,000 | $ 5,289,000 | ||
Stock-based compensation cost capitalized | 0 | 0 | ||
Rollover units and profit interests | [1] | 2,317,000 | $ 2,211,000 | |
Selling, general and administrative expenses | $ 158,434,000 | 163,360,000 | ||
Design Investors WW Acquisition Company, LLC [Member] | Profit Interests [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Profit interest expected life | 5 years | |||
Selling, general and administrative expenses | $ 100,000 | 100,000 | ||
Design Investors WW Acquisition Company, LLC [Member] | Profit Interests [Member] | Other Non-Current Obligations [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Liability associated with the profit interests | 800,000 | $ 700,000 | ||
Appreciation Rights [Member] | Design Investors WW Acquisition Company, LLC [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Rollover units and profit interests | 1,500,000 | 1,500,000 | ||
Appreciation Rights [Member] | Design Investors WW Acquisition Company, LLC [Member] | Rollover Units [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 0 | ||
2012 Stock Incentive Plan and 2012 Stock Option Plan [Member] | Stock Options [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Outstanding shares | 8,564,739 | |||
Options outstanding, weighted-average exercise price per share | $ 50.66 | |||
Numbers of options vested | 6,295,895 | |||
Vested weighted-average exercise price per share | $ 51.95 | |||
Aggregate intrinsic value of options outstanding | $ 429,800,000 | |||
Aggregate intrinsic value of options vested or expected to vest | 388,200,000 | |||
Aggregate intrinsic value of options exercisable | $ 307,000,000 | |||
Weighted-average remaining contractual life of options exercisable | 5 years 10 months 24 days | |||
Unrecognized compensation expense related to unvested options | $ 23,400,000 | |||
Unrecognized compensation expense with weighted-average period | 2 years 10 months 9 days | |||
2012 Stock Incentive Plan and 2012 Stock Option Plan [Member] | Restricted Stock And Restricted Stock Unit [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation expense with weighted-average period | 2 years 9 months 21 days | |||
Outstanding shares | 768,463 | |||
Restricted stock awards outstanding with weighted-average grant date fair value per share | $ 52.81 | |||
Vested restricted stock unit | 30,615 | |||
Vested weighted-average grant date fair value | $ 52.36 | |||
Vested weighted-average vest date fair value | $ 97.09 | |||
Unrecognized compensation expense related to unvested options | $ 18,900,000 | |||
[1] | Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 13—Stock-Based Compensation. |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | May 05, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Material off balance sheet commitments | $ 0 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) | 3 Months Ended | |
May 05, 2018StoreSegmentCustomer | Apr. 29, 2017Customer | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | Segment | 2 | |
Number of outlet stores | 32 | |
Number of customers accounted for more than 10% of Company's revenues | Customer | 0 | 0 |
Sales [Member] | Customer Concentration Risk [Member] | ||
Segment Reporting Information [Line Items] | ||
Portion of specified customers portion in total revenues | 10.00% | 10.00% |
Canada [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of retail stores | 4 | |
Number of outlet stores | 2 | |
U.K [Member] | ||
Segment Reporting Information [Line Items] | ||
Number of retail stores | 1 |
Segment Reporting - Summary of
Segment Reporting - Summary of Statements of Operations Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Segment Reporting Information [Line Items] | ||
Net revenues | $ 557,406 | $ 562,080 |
Gross profit | 212,035 | 170,256 |
Depreciation and amortization | 17,047 | 16,020 |
RH Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 526,007 | 533,528 |
Gross profit | 199,035 | 159,627 |
Depreciation and amortization | 15,935 | 14,901 |
Waterworks [Member] | ||
Segment Reporting Information [Line Items] | ||
Net revenues | 31,399 | 28,552 |
Gross profit | 13,000 | 10,629 |
Depreciation and amortization | $ 1,112 | $ 1,119 |
Segment Reporting - Summary o61
Segment Reporting - Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting (Detail) - USD ($) $ in Thousands | May 05, 2018 | Feb. 03, 2018 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 141,849 | $ 141,893 |
Trademarks and domain names | 100,663 | 100,663 |
Total assets | 1,748,961 | 1,732,866 |
RH Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 124,404 | 124,448 |
Trademarks and domain names | 48,563 | 48,563 |
Total assets | 1,621,817 | 1,608,290 |
Waterworks [Member] | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 17,445 | 17,445 |
Trademarks and domain names | 52,100 | 52,100 |
Total assets | $ 127,144 | $ 124,576 |
Segment Reporting - Summary o62
Segment Reporting - Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Feb. 03, 2018USD ($) | |
Waterworks [Member] | |
Segment Reporting Information [Line Items] | |
Impairment charge to goodwill | $ 33.7 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Operating Income (Loss) and Income (Loss) Before Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Segment Reporting Information [Line Items] | ||
Operating income (loss) | $ 53,601 | $ 6,896 |
Distribution center closures | 2,072 | |
Recall accrual | 254 | |
Post-acquisition related legal costs | (1,915) | |
Impact of inventory step-up | (190) | (1,380) |
Interest expense—net | 17,035 | 12,179 |
Income (loss) before income taxes | 36,566 | (5,283) |
Operating Segments [Member] | RH Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | 53,896 | 10,058 |
Operating Segments [Member] | Waterworks [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | $ (516) | $ (1,782) |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 05, 2018 | Apr. 29, 2017 | |
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 557,406 | $ 562,080 |
Furniture [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | 352,646 | 352,956 |
Non-furniture [Member] | ||
Segment Reporting Information [Line Items] | ||
Total net revenues | $ 204,760 | $ 209,124 |