Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Mar. 24, 2021 | Jul. 31, 2020 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jan. 30, 2021 | ||
Entity File Number | 001-35720 | ||
Entity Registrant Name | RH | ||
Entity Tax Identification Number | 45-3052669 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 15 Koch Road | ||
Entity Address, City or Town | Corte Madera | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94925 | ||
City Area Code | 415 | ||
Local Phone Number | 924-1005 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | RH | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 20,996,817 | ||
Entity Public Float | $ 4,983,473,412 | ||
Entity Central Index Key | 0001528849 | ||
Current Fiscal Year End Date | --01-30 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 100,446 | $ 47,658 |
Accounts receivable-net | 59,474 | 48,979 |
Merchandise inventories | 544,227 | 438,696 |
Prepaid expense and other current assets | 97,337 | 61,619 |
Total current assets | 801,484 | 596,952 |
Property and equipment-net | 1,077,198 | 967,599 |
Operating lease right-of-use assets | 456,164 | 410,904 |
Goodwill | 141,100 | 124,367 |
Tradenames, trademarks and other intangible assets | 71,663 | 86,022 |
Deferred tax assets | 49,924 | 45,005 |
Equity method investments | 100,603 | |
Other non-current assets | 200,177 | 214,845 |
Total assets | 2,898,313 | 2,445,694 |
Current liabilities: | ||
Accounts payable and accrued expenses | 424,422 | 330,309 |
Deferred revenue and customer deposits | 280,641 | 162,433 |
Operating lease liabilities | 71,524 | 58,924 |
Other current liabilities | 145,045 | 140,714 |
Total current liabilities | 921,632 | 982,912 |
Equipment promissory notes-net | 14,614 | 31,053 |
Non-current operating lease liabilities | 448,169 | 409,930 |
Non-current finance lease liabilities | 485,481 | 442,988 |
Other non-current obligations | 16,981 | 28,520 |
Total liabilities | 2,451,287 | 2,427,043 |
Commitments and contingencies (Note 20) | ||
Stockholders' equity: | ||
Preferred stock-$0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of January 30, 2021 and February 1, 2020 | ||
Common stock-$0.0001 par value per share, 180,000,000 shares authorized, 20,995,387 shares issued and outstanding as of January 30, 2021; 19,236,681 shares issued and outstanding as of February 1, 2020 | 2 | 2 |
Additional paid-in capital | 581,897 | 430,662 |
Accumulated other comprehensive income (loss) | 2,565 | (2,760) |
Accumulated deficit | (137,438) | (409,253) |
Total stockholders' equity | 447,026 | 18,651 |
Total liabilities and stockholders' equity | 2,898,313 | 2,445,694 |
Asset based credit facility | ||
Current liabilities: | ||
Asset based credit facility | 0 | 0 |
Convertible senior notes due 2020 | ||
Current liabilities: | ||
Convertible senior notes due 2020-net | 290,532 | |
Convertible senior notes due 2023 | ||
Current liabilities: | ||
Convertible senior notes due-net | 282,956 | 266,658 |
Convertible senior notes due 2024 | ||
Current liabilities: | ||
Convertible senior notes due-net | $ 281,454 | $ 264,982 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 30, 2021 | Feb. 01, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 20,995,387 | 19,236,681 |
Common stock, shares outstanding | 20,995,387 | 19,236,681 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
Net revenues | $ 2,848,626 | $ 2,647,437 | $ 2,505,653 |
Cost of goods sold | 1,523,095 | 1,552,426 | 1,520,076 |
Gross profit | 1,325,531 | 1,095,011 | 985,577 |
Selling, general and administrative expenses | 858,673 | 732,180 | 723,841 |
Income from operations | 466,858 | 362,831 | 261,736 |
Other expenses | |||
Interest expense-net | 69,250 | 87,177 | 67,769 |
Goodwill and tradename impairment | 20,459 | 32,086 | |
(Gain) loss on extinguishment of debt-net | (152) | 6,472 | 917 |
Total other expenses | 89,557 | 93,649 | 100,772 |
Income before equity method investments | 377,301 | 269,182 | 160,964 |
Income tax expense | 104,598 | 48,807 | 25,233 |
Income before equity method investments | 272,703 | 220,375 | 135,731 |
Share of equity method investments losses | (888) | ||
Net income | $ 271,815 | $ 220,375 | $ 135,731 |
Weighted-average shares used in computing basic net income per share | 19,668,976 | 19,082,303 | 21,613,678 |
Basic net income per share | $ 13.82 | $ 11.55 | $ 6.28 |
Weighted-average shares used in computing diluted net income per share | 27,302,268 | 24,299,034 | 26,533,225 |
Diluted net income per share | $ 9.96 | $ 9.07 | $ 5.12 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 271,815 | $ 220,375 | $ 135,731 |
Net gains (losses) from foreign currency translation | 5,325 | (426) | (2,163) |
Total comprehensive income | $ 277,140 | $ 219,949 | $ 133,568 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit)Impact of Topic 606 adoption | Retained Earnings (Accumulated Deficit) | Treasury Stock | Impact of Topic 606 adoption | Total |
Balances at Feb. 03, 2018 | $ 2 | $ 840,765 | $ (171) | $ (21,036) | $ 151,575 | $ (1,000,326) | $ (21,036) | $ (8,155) |
Balances, shares at Feb. 03, 2018 | 21,517,338 | 20,220,132 | ||||||
Stock-based compensation | 23,557 | 23,557 | ||||||
Issuance of restricted stock, Shares | 6,405 | |||||||
Vested and delivered restricted stock units | (9,502) | (9,502) | ||||||
Vested and delivered restricted stock units, Shares | 122,177 | |||||||
Exercise of stock options | 44,024 | 44,024 | ||||||
Exercise of stock options, Shares | 882,272 | |||||||
Repurchases of common stock | $ (250,243) | (250,243) | ||||||
Repurchases of common stock, Shares | (2,050,379) | 2,050,379 | ||||||
Retirement of treasury stock | (591,519) | (658,807) | $ 1,250,326 | (1,250,300) | ||||
Retirement of treasury stock, Shares | (22,267,711) | |||||||
Equity component value of convertible note issuance-net | 89,933 | 89,933 | ||||||
Sale of common stock warrant | 51,021 | 51,021 | ||||||
Purchase of convertible note hedge | (91,857) | (91,857) | ||||||
Net income | 135,731 | 135,731 | ||||||
Net gains (losses) from foreign currency translation | (2,163) | (2,163) | ||||||
Balances at Feb. 02, 2019 | $ 2 | 356,422 | (2,334) | (392,537) | $ (243) | (38,690) | ||
Balances, shares at Feb. 02, 2019 | 20,477,813 | 2,800 | ||||||
Stock-based compensation | 21,406 | 21,406 | ||||||
Issuance of restricted stock, Shares | 7,014 | |||||||
Vested and delivered restricted stock units | (7,069) | (7,069) | ||||||
Vested and delivered restricted stock units, Shares | 109,062 | |||||||
Exercise of stock options | 27,138 | 27,138 | ||||||
Exercise of stock options, Shares | 643,090 | |||||||
Repurchases of common stock | $ (250,032) | (250,032) | ||||||
Repurchases of common stock, Shares | (2,167,396) | 2,167,396 | ||||||
Retirement of treasury stock | (13,180) | (237,091) | $ 250,271 | (250,300) | ||||
Retirement of treasury stock, Shares | (2,170,154) | |||||||
Equity component value of convertible note issuance-net | 87,070 | 87,070 | ||||||
Sale of common stock warrant | 50,225 | 50,225 | ||||||
Shares issued in connection with warrant agreements | 167,056 | |||||||
Purchase of convertible note hedge | (91,350) | (91,350) | ||||||
Conversion of convertible senior notes | $ 4 | 4 | ||||||
Conversion of convertible senior notes, Shares | 42 | (42) | ||||||
Net income | 220,375 | 220,375 | ||||||
Net gains (losses) from foreign currency translation | (426) | (426) | ||||||
Balances at Feb. 01, 2020 | $ 2 | 430,662 | (2,760) | (409,253) | 18,651 | |||
Balances, shares at Feb. 01, 2020 | 19,236,681 | |||||||
Stock-based compensation | 145,278 | 145,278 | ||||||
Issuance of restricted stock, Shares | 3,192 | |||||||
Vested and delivered restricted stock units | (8,348) | (8,348) | ||||||
Vested and delivered restricted stock units, Shares | 76,602 | |||||||
Exercise of stock options | 14,377 | 14,377 | ||||||
Exercise of stock options, Shares | 292,949 | |||||||
Repurchases of common stock | $ (72) | (72) | ||||||
Repurchases of common stock, Shares | (600) | 600 | ||||||
Retirement of treasury stock | (77) | $ 77 | $ (100) | |||||
Retirement of treasury stock, Shares | (617) | (600) | ||||||
Shares issued in connection with warrant agreements | 1,386,580 | |||||||
Settlement of convertible senior notes | (315,708) | $ 315,708 | ||||||
Settlement of convertible senior notes, Shares | 1,131,645 | (1,131,645) | ||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 315,713 | $ (315,713) | ||||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (1,131,662) | 1,131,662 | ||||||
Net income | 271,815 | $ 271,815 | ||||||
Net gains (losses) from foreign currency translation | 5,325 | 5,325 | ||||||
Balances at Jan. 30, 2021 | $ 2 | $ 581,897 | $ 2,565 | $ (137,438) | $ 447,026 | |||
Balances, shares at Jan. 30, 2021 | 20,995,387 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 271,815 | $ 220,375 | $ 135,731 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 100,040 | 100,739 | 91,372 |
Non-cash operating lease cost | 64,132 | 65,195 | 68,612 |
Goodwill and tradename impairment | 20,459 | 32,086 | |
Asset impairments | 6,484 | 15,168 | 6,533 |
Asset held for sale (gain) loss | 9,352 | (1,529) | 8,497 |
Amortization of debt discount | 42,372 | 46,245 | 41,868 |
Accretion of debt discount upon settlement of debt | (84,003) | (70,482) | |
Stock-based compensation expense | 145,704 | 21,832 | 23,983 |
Non-cash finance lease interest expense | 24,011 | 22,608 | 16,785 |
Product recalls | 7,370 | (3,517) | 6,874 |
Deferred income taxes | (4,920) | (7,709) | (5,018) |
(Gain) loss on extinguishment of debt-net | (152) | 6,472 | 917 |
Share of equity method investments losses | 888 | ||
Other non-cash items | 3,998 | 4,334 | 4,019 |
Change in assets and liabilities: | |||
Accounts receivable | (10,485) | (7,309) | (8,583) |
Merchandise inventories | (104,621) | 93,266 | (7,399) |
Prepaid expense and other assets | (67,349) | 28,404 | (88,434) |
Landlord assets under construction-net of tenant allowances | (69,508) | (64,300) | (59,001) |
Accounts payable and accrued expenses | 63,583 | 7,445 | 10,148 |
Deferred revenue and customer deposits | 116,205 | 9,799 | 8,413 |
Other current liabilities | 43,856 | (45,767) | 51,214 |
Current and non-current operating lease liabilities | (58,920) | (77,004) | (70,875) |
Other non-current obligations | (19,541) | (25,077) | (18,139) |
Net cash provided by operating activities | 500,770 | 339,188 | 249,603 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (111,126) | (93,623) | (79,992) |
Equity method investments | (80,723) | ||
Acquisition of business and assets | (17,900) | ||
Deposits on asset under construction | (12,857) | (53,000) | |
Proceeds from sale of assets | 25,006 | 24,078 | |
Net cash used in investing activities | (197,600) | (122,545) | (79,992) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings under promissory and equipment security notes | 12,857 | 122,000 | |
Repayments under promissory and equipment security notes | (34,456) | (16,520) | (31,974) |
Debt issuance costs | (4,636) | ||
Proceeds from issuance of convertible senior notes | 350,000 | 335,000 | |
Proceeds from issuance of warrants | 50,225 | 51,021 | |
Purchase of convertible note hedges | (91,350) | (91,857) | |
Principal payments under finance leases | (12,498) | (9,682) | (6,885) |
Repurchases of common stock-including commissions | (250,032) | (250,000) | |
Proceeds from exercise of stock options | 14,377 | 27,138 | 44,024 |
Tax withholdings related to issuance of stock-based awards | (8,348) | (7,069) | (9,502) |
Net cash used in financing activities | (243,914) | (174,804) | (188,992) |
Effects of foreign currency exchange rate translation | 157 | 16 | (130) |
Net increase (decrease) in cash and cash equivalents and restricted cash equivalents | 59,413 | 41,855 | (19,511) |
Cash and cash equivalents and restricted cash equivalents | |||
Beginning of period-cash and cash equivalents | 47,658 | 5,803 | 17,907 |
Beginning of period-restricted cash equivalents (construction related deposits) | 7,407 | ||
Beginning of period-cash and cash equivalents | 47,658 | 5,803 | 25,314 |
End of period-cash and cash equivalents | 100,446 | 47,658 | 5,803 |
End of period-restricted cash equivalents (acquisition related escrow deposits) | 6,625 | ||
End of period-cash and cash equivalents and restricted cash equivalents | 107,071 | 47,658 | 5,803 |
Cash paid for interest | 27,249 | 43,278 | 31,154 |
Cash paid for taxes | 74,219 | 40,126 | 41,289 |
Non-cash transactions: | |||
Property and equipment additions in accounts payable and accrued expenses at period-end | 28,377 | 5,161 | 7,837 |
Landlord asset additions in accounts payable and accrued expenses at period-end | 19,943 | 19,640 | 12,142 |
Landlord asset additions from unpaid construction related deposits | 195 | 195 | 2,807 |
Reclassification of assets from landlord assets under construction to finance lease right-of-use assets | 68,459 | 19,503 | 79,685 |
Promissory notes forgiven in exchange for assets | 65,857 | ||
Conversion of loan receivables into equity method investments | 20,219 | ||
Shares issued on settlement of convertible senior notes | (315,708) | ||
Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes | 315,713 | ||
Convertible senior notes | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Debt issuance costs | (4,818) | (6,349) | |
Repayments of convertible senior notes | (215,846) | (278,560) | |
Asset based credit facility | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings | 359,401 | 322,500 | 866,500 |
Repayments | $ (359,401) | (380,000) | (1,008,970) |
Term Loan | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings | 320,000 | ||
Repayments | $ (324,000) | $ (80,000) |
Nature of Business
Nature of Business | 12 Months Ended |
Jan. 30, 2021 | |
Significant Accounting Policies | |
Nature of Business | NOTE 1—NATURE OF BUSINESS RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” or the “Company”), is a leading luxury retailer in the home furnishings market that offers a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of January 30, 2021, we operated a total of 68 RH Galleries and 38 RH outlet stores in 31 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. |
Organization
Organization | 12 Months Ended |
Jan. 30, 2021 | |
Significant Accounting Policies | |
Organization | NOTE 2—ORGANIZATION The Company was formed on August 18, 2011 and capitalized on September 2, 2011 as a holding company for the purposes of facilitating an initial public offering of common equity and was at such time a direct subsidiary of Home Holdings, LLC, a Delaware limited liability company (“Home Holdings”). On November 1, 2012, we acquired all of the outstanding shares of capital stock of Restoration Hardware, Inc., a Delaware corporation, and Restoration Hardware, Inc. became our direct, wholly owned subsidiary. Restoration Hardware, Inc. was a direct, wholly owned subsidiary of Home Holdings prior to our initial public offering. Outstanding units issued by Home Holdings under its equity compensation plan, referred to as the Team Resto Ownership Plan, were replaced with our common stock at the time of our initial public offering. These transactions are referred to as the “Reorganization.” On November 7, 2012, we completed our initial public offering. On December 15, 2016, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to change our name to “RH,” effective January 1, 2017. Recent Developments—COVID-19 The COVID-19 outbreak in the fiscal quarter of fiscal 2020 caused disruption to our business operations. In our initial response to the health crisis we undertook immediate adjustments to our business operations including temporarily closing all of our retail locations and Restaurants, curtailing expenses and delaying investments including scaling back some inventory orders while we assessed the status of our business. Our approach to the crisis evolved quickly as our business trends substantially improved during the second through fourth fiscal quarters of fiscal 2020 as a result of both the reopening of most of our retail locations and also strong consumer demand for our products. Operational restrictions related to COVID-19 affecting our Galleries and hospitality locations have fluctuated during the fourth quarter of fiscal 2020 and continuing into the first quarter of 2021 based upon changes in local conditions and regulations. As of March 24, 2021 we had reopened all of our Galleries and Outlets, and nine out of ten of our Restaurants although many of our Restaurants were continuing to conduct business under occupancy limitations and other operational restrictions. Our overall customer demand in specific markets during fiscal 2020 has generally correlated favorably with our customers’ ability to access our Galleries and Outlets. Although our business has strengthened during the period from the second quarter of fiscal 2020 and continuing into the first quarter of fiscal 2021, various constraints in our merchandise supply chain have resulted in some delays in our ability to convert business demand into revenues at normal historical rates. We anticipate that the business conditions related to COVID-19 will continue to adversely affect the capacity of our vendors and supply chain to meet our merchandise demand levels during fiscal 2021. We expect that our supply chain may catch up to demand in the second half of fiscal 2021, but business circumstances and operational conditions in numerous international locations where our vendors operate cannot be predicted with certainty. As a result, the pandemic may continue to adversely affect business operations in these jurisdictions which could in turn have a negative impact on our business and our ability to source products. In light of the COVID-19 pandemic, we will continue to closely manage our investments while considering both the overall economic environment as well as the needs of our business operations. In addition, our near-term decisions regarding the sources and uses of capital in our business will continue to reflect and adapt to changes in market conditions and our business including further developments with respect to the pandemic. For example, real estate development counterparties with respect to some of our Gallery developments have withdrawn from these projects as a result of capital or liquidity constraints due to COVID-19 related difficulties, and these and other similar factors may impact the timing or scope of some of our new Galleries including delays in our previous plans to open a number of our international locations. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jan. 30, 2021 | |
Significant Accounting Policies | |
Significant Accounting Policies | NOTE 3—SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. Fiscal Years Our fiscal year ends on the Saturday closest to January 31. As a result, our fiscal year may include 53 weeks. The fiscal years ended January 30, 2021 (“fiscal 2020”), February 1, 2020 (“fiscal 2019”) and February 2, 2019 (“fiscal 2018”) each consisted of 52 weeks. Use of Accounting Estimates The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements. Cash and Cash Equivalents We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Concentration of Credit Risk We maintain our cash and cash equivalent accounts in financial institutions in both U.S. dollar and Canadian dollar denominations. Accounts at the U.S. institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 and accounts at the Canadian institutions are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to $100,000 Canadian dollars. As of January 30, 2021 and February 1, 2020, and at various times throughout these fiscal years, we had cash in financial institutions in excess of the amount insured by the FDIC and CDIC. We perform ongoing evaluations of these institutions to limit our concentration of credit risk. Accounts Receivable Accounts receivable consist primarily of receivables from our credit card processors for sales transactions, receivables related to our contract business and other miscellaneous receivables. Accounts receivable is presented net of allowance for doubtful accounts, which is recorded on a specific identification basis. The allowance for doubtful accounts was $3.3 million and $2.2 million as of January 30, 2021 and February 1, 2020, respectively. Merchandise Inventories Our merchandise inventories consist primarily of finished goods and are carried at the lower of cost or net realizable value, with cost determined on a weighted-average cost method. To determine if the value of inventory should be marked down below original cost, we use estimates to determine the lower of cost or net realizable value, which considers current and anticipated demand, customer preference and the merchandise age. The inventory value is adjusted periodically to reflect current market conditions, which requires judgments that may significantly affect the ending inventory valuation, as well as gross margin. The estimates used in inventory valuation are lower of cost or net realizable value reserves and obsolescence (including excess and slow-moving inventory). In addition, we estimate and accrue for inventory shrinkage. Our inventory reserves contain uncertainties that require us to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. We adjust inventory reserves for net realizable value and obsolescence based on trends, aging reports, specific identification and estimates of future retail sales prices. Reserves for shrinkage are estimated and recorded throughout the year as a percentage of shipped sales for the direct channels, and as a percentage of cost of goods sold for the outlet business, based on historical shrinkage results, current inventory levels and results of statistical sampling, where applicable. Actual shrinkage is recorded throughout the year based upon periodic physical inventory counts. Actual inventory shrinkage and obsolescence can vary from estimates due to factors including the volume of inventory movement and execution against loss prevention initiatives in our distribution centers, home delivery center locations, off-site storage locations and with our third-party transportation providers. Our inventory reserve balances were $23.8 million and $25.6 million as of January 30, 2021 and February 1, 2020, respectively. Product Recalls During fiscal 2020, fiscal 2019 and fiscal 2018, we initiated product recalls for certain of our products, as well as adjusted accruals related to certain product recalls previously initiated due to changes in estimates based on customer response and vendor and insurance recoveries. Product recalls had the following effect on our income before income taxes (in thousands) YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 (Increase) decrease to net revenues $ 1,373 $ (391) $ 4,733 Increase (decrease) to cost of goods sold 4,554 (3,372) (4,139) (Increase) decrease to gross profit 5,927 (3,763) 594 Increase (decrease) to selling, general and administrative expenses 1,443 (225) 1,025 (Increase) decrease to income before income taxes $ 7,370 $ (3,988) $ 1,619 The product recall accrual as of January 30, 2021 and February 1, 2020 was $8.2 million and $2.1 million, respectively, and is included in other current liabilities Advertising Expenses Advertising expenses primarily represent the costs associated with our catalog mailings, as well as print and website marketing. Total advertising expense, which is recorded in selling, general and administrative expenses Capitalized Catalog Costs Capitalized catalog costs consist primarily of third-party incremental direct costs to prepare, print and distribute our Source Books. Such costs are capitalized and recognized as expense 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. We had $19.1 million and $13.7 million of capitalized catalog costs as of January 30, 2021 and February 1, 2020, respectively, which are included in prepaid expense and other current assets Website and Print Advertising Website and print advertising expenses, which include e-commerce advertising, web creative content and direct marketing activities such as print media, radio and other media advertising, are expensed as incurred or upon the release of the content or the initial advertisement. Property and Equipment Property and equipment is recorded at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method, generally using the following useful lives: CATEGORY OF PROPERTY AND EQUIPMENT USEFUL LIFE Building and building improvements 40 years Machinery, equipment and aircraft 3 to 10 years Furniture, fixtures and equipment 3 to 7 years Computer software 3 to 10 years The cost of leasehold improvements is amortized over the lesser of the useful life of the asset or the applicable lease term, which could include option periods reasonably certain to be exercised. We expense all internal-use software costs incurred in the preliminary project stage and capitalize certain direct costs associated with the development and purchase of internal-use software, including external costs of materials and services and internal payroll costs related to the software project, within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally between three Interest is capitalized on construction in progress and software projects during the period in which expenditures have been made and activities are in progress to prepare the asset for its intended use. We capitalized interest of $5.6 million, $4.9 million and $3.1 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. During fiscal 2020, fiscal 2019 and fiscal 2018, $5.3 million, $3.7 million and $2.7 million, respectively, of the $5.6 million, $4.9 million and $3.1 million capitalized interest relates to the capitalization of non-cash interest associated with the amortization of the convertible senior notes debt discount. Land purchases are recorded at cost and are non-depreciable assets. Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. For further discussion regarding the impairment accounting policy refer to “Impairment—Long-Lived Assets” below. Asset Held for Sale Upon designation as an asset held for sale, the carrying value of the asset is recorded at the lower of its carrying value or its estimated fair value less estimated costs to sell, and we cease depreciating the asset. Lease Accounting We lease nearly all of our retail and outlet store locations, corporate headquarters, distribution centers and home delivery center locations, as well as other storage and office space. The initial lease terms of our real estate leases generally range from ten three We account for lease and non-lease components as a single lease component for real estate leases, and for all other asset classes we account for the components separately. We determine the lease classification and begin to recognize lease and any related financing expenses upon the lease’s commencement, which for real estate leases is generally upon store opening or, to a lesser extent, when we take possession or control of the asset. We sublease certain real estate locations to third parties under operating leases and recognize rental income received on a straight-line basis over the lease term, which is recorded as an offset to selling, general and administrative expenses Lease arrangements may require the landlord to provide tenant allowances directly to us. Standard tenant allowances received from landlords, typically those received under operating lease agreements, are recorded as cash and cash equivalents lease right-of-use assets lease liabilities right-of-use assets In the case of leases with associated construction, tenant allowances are provided for us to design and build the leased asset. Tenant allowances received from landlords during the construction phase of a leased asset and prior to lease commencement are recorded as cash and cash equivalents other non-current assets other current liabilities other non-current assets other current liabilities lease right-of-use assets Lease Classification Certain of our real estate and equipment leases are classified as finance leases. Lease characteristics that we evaluate to determine lease classification include, but are not limited to, the reasonably certain lease term, the economic life and fair value of the leased asset. Lease related assets under such classification are included in “finance lease right-of-use assets” within property and equipment—net Leases that do not meet the definition of a finance lease are considered operating leases. Lease related assets classified as operating leases are included in operating lease right-of-use assets Reasonably Certain Lease Term In recognizing the lease right-of-use assets and lease liabilities, we utilize the lease term for which we are reasonably certain to use the underlying asset, including consideration of options to extend or terminate the lease. At lease commencement, we evaluate whether it is reasonably certain to exercise available options based on consideration of a variety of economic factors and the circumstances related to the leased asset. Factors considered include, but are not limited to, (i) the contractual terms compared to estimated market rates, (ii) the uniqueness or importance of the asset or its location, (iii) the potential costs of obtaining an alternative asset, (iv) the potential costs of relocating or ceasing use of the asset, including the consideration of leasehold improvements and other invested capital, and (v) any potential tax consequences. The determination of the reasonably certain lease term affects the inclusion of rental payments utilized in the incremental borrowing rate calculations, the results of the lease classification test, and consideration of certain assets held for sale or planned for sale-leaseback. The reasonably certain lease term may materially impact our financial position related to certain Design Galleries or distribution center facilities which typically have greater lease payments. Although the above factors are considered in our analysis, the assessment involves subjectivity considering our strategy, expected future events and market conditions. While we believe our estimates and judgments in determining the lease term are reasonable, future events may occur which may require us to reassess this determination. Leases, or lease extensions, with a term of twelve months or less are not recorded on the consolidated balance sheets, and we recognize lease expense for these leases on a straight-line basis over the lease term. Lease Payments The majority of our real estate lease agreements include minimum rent payments which are subject to stated lease escalations over the lease term and eligible renewal periods. These stated fixed payments, through the reasonably certain lease term, are included in our measurement of the lease right-of-use assets and lease liabilities upon lease commencement. Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels. Additionally, certain lease agreements include rental payments based solely on a percentage of retail sales. Due to the variable and unpredictable nature of such payments, we do not recognize a lease right-of-use asset and lease liability related to such payments. Estimated variable rental payments are included in accounts payable and accrued expenses cost of goods sold We have a small group of real estate leases that include rental payments periodically adjusted for inflation (e.g., based on the consumer price index). We include these variable payments in the initial measurement of the lease right-of-use asset and lease liability according to the index or rate at the commencement date and incorporates adjustments to rental payments in future periods if such increases have a minimum rent escalation (e.g., floor). Changes due to differences between the variable lease payments estimated at least commencement and actual amounts incurred are recognized in the consolidated statements of income in the period such costs are incurred. Lease concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee are accounted for as if no change to the lease contract were made. Under this approach, we recognize a separate non-interest bearing payable for any deferred payments in the concession period, which is recorded in accounts payable and accrued expenses accounts payable and accrued expenses Incremental Borrowing Rate As our real estate leases and most of our equipment leases do not include an implicit interest rate, we determine the discount rate for each lease based upon the incremental borrowing rate (“IBR”) in order to calculate the present value of lease payments at the commencement date. The IBR is computed as the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the total lease payments in a similar economic environment. We utilize our asset based credit facility as the basis for determining the applicable IBR for each lease. We estimate the incremental borrowing rate for each lease primarily by reference to yield rates on debt issuances by companies of a similar credit rating, the weighted-average lease term and adjustments for differences between the yield rates and the actual term of the credit facility. In determining the yield rates, for Design Galleries we utilize market information on the lease commencement date and for leases other than new Design Galleries, we utilize market information as of the beginning of the quarter in which the lease commenced. Fair Value We determine the fair value of the underlying asset, considering lease components such as land and building, for purposes of determining the lease classification and allocating our contractual rental payments to the lease components. The fair value of the underlying asset and lease components also impact the evaluation and accounting for assets held for sale and sale-leaseback transactions. The fair value assessments may materially impact our financial position related to certain Design Galleries or distribution center facilities. The determination of fair value requires subjectivity and estimates, including the use of multiple valuation techniques and uncertain inputs, such as market price per square foot and assumed capitalization rates or the replacement cost of the assets, where applicable. Where real estate valuation expertise is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset and lease components. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. Construction Related Activities We are often involved in the construction of leased stores for our new Design Galleries. Upon construction commencement, we evaluate whether or not we, as lessee, control the asset being constructed and, depending on the extent to which we are involved, we may be the “deemed owner” of the leased asset for accounting purposes during the construction period under a build-to-suit arrangement. If we are the “deemed owner” for accounting purposes, upon commencement of the construction project we are required to capitalize (i) costs incurred by us and (ii) the cash and non-cash assets contributed by the landlord for construction as property and equipment on our consolidated balance sheets as build-to-suit assets, with an offsetting financing obligation under build-to-suit lease transactions. The contributions by the landlord toward construction, including the building, existing site improvements at construction commencement and any amounts paid by the landlord to those responsible for construction, are included as property and equipment additions due to build-to-suit lease transactions within the non-cash section of the consolidated statements of cash flows. Over the lease term, these non-cash additions to property and equipment do not impact our cash outflows, nor do they impact net income on the consolidated statements of income. Upon completion of the construction project where we are the deemed owner, we perform a sale-leaseback analysis to determine if we can derecognize the build-to-suit asset and corresponding financing obligation. If the asset and liability cannot be derecognized, we account for the agreement as a debt-like arrangement. If we are involved in a debt-like arrangement for a non-real estate asset under construction for which we plan to lease such asset upon construction completion and make deposits during the construction period, we recognize the related deposits as “Deposits on asset under construction” within other non-current assets Prepaid Expense and Other Assets other current liabilities Accounts Payable, Accrued Expenses and Other Current Liabilities If we are not the “deemed owner” for accounting purposes during the construction period, such lease is classified as either an operating or finance lease upon lease commencement. During the construction period and prior to lease commencement, any capital amounts contributed by us toward the construction of the leased asset (excluding normal leasehold improvements, which are recorded within property and equipment—net) other non-current assets Prepaid Expense and Other Assets lease right-of-use assets property and equipment—net Sale-Leaseback Activities We occasionally enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell the property to a third party and agrees to lease the property back for a certain period of time. To determine whether the transfer of the property should be accounted for as a sale, we evaluate whether it has transferred control to the third party in accordance with the guidance set forth in Topic 606. If the transfer of the asset is a sale at market terms, we recognize the transaction price for the sale based on the cash proceeds received, derecognize the carrying amount of the underlying asset and recognize a gain or loss in the consolidated statements of income for any difference between the carrying value of the asset and the transaction price. We then account for the leaseback in accordance with our lease accounting policy. If the transfer of the asset is determined not to be a sale, we account for the transaction as a financing arrangement. We continue to present the asset within property and equipment—net Intangible Assets Intangible assets reflect the value assigned to tradenames, trademarks, domain names and other intangible assets. The cost of purchasing transferable liquor licenses in jurisdictions with a limited number of authorized liquor licenses are capitalized as an intangible asset. We do not amortize our intangible assets as we define the life of these assets as indefinite. Impairment Goodwill We evaluate goodwill annually to determine whether it is impaired or whenever events occur or circumstances change that would indicate that the fair value of a reporting unit is less than its carrying amount. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset; general economic conditions, such as increasing Treasury rates or unexpected changes in gross domestic product growth; a change in our market share; budget-to-actual performance and consistency of operating margins and capital expenditures; a product recall or an adverse action or assessment by a regulator; or changes in management or key personnel. We perform our annual goodwill impairment testing in the fourth fiscal quarter by comparing the fair value of a reporting unit with its carrying amount, limited to the total amount of goodwill of the reporting unit. We will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. We determine fair values using the discounted cash flow approach (“income approach”) or the market multiple valuation approach (“market approach”), when available and appropriate, or a combination of both. We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation. If multiple valuation methodologies are used, the results are weighted appropriately. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each respective reporting unit. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Valuations using the market approach are derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for which there are publicly traded companies that have the characteristics similar to our businesses. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. A reporting unit is an operating segment, or a business unit one level below that operating segment for which discrete financial information is prepared and regularly reviewed by the Chief Operating Decision Maker (“CODM”), which is our Chief Executive Officer. We have deemed RH Segment and Waterworks to be the reporting units for which goodwill is independently tested, as these operating segments are the lowest level for which discrete financial information is prepared and regularly reviewed by the CODM. RH Segment Reporting Unit During fiscal 2020, fiscal 2019 and fiscal 2018, we reviewed the RH Segment reporting unit goodwill for impairment by assessing qualitative factors to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying amount. Based on the qualitative tests performed in each fiscal year, we determined that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount for fiscal 2020, fiscal 2019 and fiscal 2018, and therefore we did not recognize goodwill impairment with respect to the RH Segment in any such fiscal year. Waterworks Reporting Unit During the fourth fiscal quarter of 2018, we conducted our annual strategic planning process. Based upon the outcome of this process, we identified indicators that there could be an impairment of the Waterworks reporting unit. These indicators included (i) an updated long-range financial plan provided by the Waterworks segment leadership team that indicated a reduction of revenues and EBITDA as compared to prior long-range financial plans, (ii) a review of the strategic initiatives of the Waterworks segment and (iii) the Waterworks segment not achieving revenue and operating income objectives compared to plans. In determining the Waterworks reporting unit estimated fair value using the income approach in fiscal 2018, we projected future cash flows based on our estimates and long-term plans and applied a discount rate based on a weighted-average cost of capital. This analysis required us to make judgments about revenues, expenses, fixed asset and working capital requirements, the impact of updated tax legislation and other subjective inputs. In determining the Waterworks reporting unit estimated fair value using the market approach, we considered assumptions that we believe market participants would use in valuing the Waterworks reporting unit, based on EBITDA multiples and including the application of a control premium. For purposes of this analysis, we weighted the results 80% towards the income approach and 20% towards the market approach. Based on the estimated fair value of the Waterworks reporting unit as of the assessment date in fiscal 2018, the Waterworks reporting unit goodwill was fully impaired in the fourth quarter of fiscal 2018. The impairment is recorded in goodwill and tradename impairment Tradenames, Trademarks and Other Intangible Assets We annually evaluate whether tradenames, trademarks and other intangible assets continue to have an indefinite life. Intangible assets are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. We qualitatively assess indefinite-lived intangible assets to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount. If tradenames, trademarks and other intangible assets are not qualitatively assessed or if such intangible assets are qualitatively assessed and it is determined it is not more likely than not that the asset’s fair value is greater than its carrying amount, an impairment review is performed by comparing the carrying value to the estimated fair value, determined using a discounted cash flow methodology, which requires judgments that may significantly affect the ending asset valuation. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, our plans for future operations, brand initiatives, recent results of operations and projected future cash flows. In the event we quantitatively assess a reporting unit’s indefinite-lived intangible asset for impairment, we perform an impairment test which utilizes the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. RH Segment Reporting Unit During fourth quarters of fiscal 2020, 2019 and 2018, we qualitatively assessed the indefinite-lived intangible assets of the RH Segment reporting unit for impairment and determined it was more likely than not that the fair value of the assets were greater than their carrying amounts. Based on the qualitative tests performed in each fiscal year, we did not perform quantitative impairment tests in any year. We did not recognize any impairment with respect to intangible assets for the RH Segment reporting unit in fiscal 2020, fiscal 2019 and fiscal 2018. Waterworks Reporting Unit During the fourth quarter of fiscal 2018, we updated the fiscal 2019 budget and financial projections beyond fiscal 2019 for the Waterworks reporting unit. There were certain factors that caused the key financial inputs for the tradename valuation model to significantly decrease from the previous inputs, the most significant of which was a reduction of future forecasted net revenues resulting from an expected shift in product mix, challenges in continuing to grow the showrooms business and supply chain constraints. These factors arising during the fourth quarter of fiscal 2018 had a significant and negative impact on the estimated future cash flows of the Waterworks reporting unit. In connection with the goodwill impairment test performed for the Waterworks reporting unit in fiscal 2018, described above, we performed an impairment test on the tradename allocated to the reporting unit which utilized the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, our significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. Based on the quantitative impairment test performed and the result of changes in forecasted revenues and the valuation assumption around future royalty rates, we concluded that the Waterworks reporting unit tradename was impaired as of February 2, 2019. As a result, we recognized a $14.6 million non-cash impairment with respect to the tradename for the Waterworks reporting unit in fiscal 2018, which was recorded in goodwill and tradename impairment During the fourth quarter of fiscal 2019, we performed our annual impairment procedures on the Waterworks tradename utilizing the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, our significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. Based on the quantitative impairment test performed, we did not recognize any impairment with respect to the Waterworks reporting unit tradename. During the first quarter of fiscal 2020, as a result of the COVID-19 health crisis and related showroom closures, we updated the long-term financial projections for the Waterworks reporting unit which resulted in a significant decrease in forecasted revenues and profitability. We performed an interim impairme |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 12 Months Ended |
Jan. 30, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Assets | NOTE 4—PREPAID EXPENSE AND OTHER ASSETS Prepaid expense and other current assets consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Prepaid expense and other current assets $ 42,079 $ 30,875 Capitalized catalog costs 19,067 13,740 Promissory note receivable, including interest (1) 13,569 — Vendor deposits 12,519 11,258 Right of return asset for merchandise 7,453 5,746 Acquisition related escrow deposits 2,650 — Total prepaid expense and other current assets $ 97,337 $ 61,619 (1) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 8— Equity Method Investments . Other non-current assets consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Landlord assets under construction—net of tenant allowances $ 135,531 $ 122,679 Initial direct costs prior to lease commencement 36,770 15,636 Capitalized cloud computing costs—net (1) 7,254 — Other deposits 5,287 5,157 Acquisition related escrow deposits 3,975 — Deferred financing fees 1,525 2,602 Deposits on asset under construction — 60,000 Promissory note receivable, including interest — 5,354 Other non-current assets 9,835 3,417 Total other non-current assets $ 200,177 $ 214,845 (1) Presented net of accumulated amortization of $0.5 million as of January 30, 2021 . |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 30, 2021 | |
Property and Equipment | |
Property and Equipment | NOTE 5—PROPERTY AND EQUIPMENT Property and equipment consists of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Finance lease right-of-use assets (1) $ 844,832 $ 734,425 Leasehold improvements (2) 340,546 318,313 Computer software 143,571 138,328 Furniture, fixtures and equipment 92,736 79,575 Machinery, equipment and aircraft 67,080 66,228 Building and building improvements (3) 43,193 33,370 Built-to-suit property 24,881 2,882 Land 9,059 6,061 Total property and equipment 1,565,898 1,379,182 Less—accumulated depreciation and amortization (4) (488,700) (411,583) Total property and equipment—net $ 1,077,198 $ 967,599 (1) Refer to “Lease Accounting” within Note 3— Significant Accounting Policies and Note 11— Leases . (2) Leasehold improvements include construction in progress of $31.7 million and $16.0 million as of January 30, 2021 and February 1, 2020, respectively. (3) Building and building improvements as of January 30, 2021 includes $40.2 million of owned buildings under construction related to future Design Galleries. (4) Includes accumulated amortization related to finance lease right-of-use assets of $133.0 million and $92.3 million as of January 30, 2021 and February 1, 2020, respectively. Refer to Note 11— Leases. We recorded depreciation and amortization of property and equipment, excluding amortization for finance lease right-of-use assets, of $58.7 million, $63.7 million and $62.6 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. |
Business Combinations
Business Combinations | 12 Months Ended |
Jan. 30, 2021 | |
Business Combinations | |
Business Combinations | NOTE 6—BUSINESS COMBINATIONS On August 28, 2020, we acquired a business for total consideration of $15.0 million funded through available cash, of which $1.9 million was deposited into an escrow account for any potential post-closing adjustments. We have deposited into escrow an additional $5.0 million, which represents a deferred acquisition related payment subject to mutually agreed to conditions and expected to be paid over two years. On December 7, 2020, we acquired the net assets of a business for $4.7 million funded through available cash, of which $0.5 million was deposited into an escrow account for any potential post-closing adjustments. Additional consideration of $4.6 million is expected to be paid over five years. We believe that these additions to the RH platform further position us as a leader in the luxury design market as we continue to enhance the RH product assortment. During fiscal 2020, we incurred acquisition-related costs associated with these transactions such as financial, legal and accounting advisors, as well as employment related costs, which are included in selling, general and administrative expenses The following table summarizes the purchase price allocation based on the fair value of the assets acquired and liabilities assumed ( in thousands Goodwill $ 16,689 Tradename 4,800 Tangible assets acquired and liabilities assumed—net (1,839) Total $ 19,650 The tradename has been assigned an indefinite life and therefore is not subject to amortization. The goodwill, included in the RH Segment, is representative of the benefits and expected synergies from the integration of the acquired companies’ products, leadership team and employees, which do not qualify for separate recognition as an intangible asset. The tradename and goodwill are expected to be deductible for tax purposes. Results of operations of the acquired companies have been included in our consolidated statements of income since their respective acquisition dates. Pro forma results of the acquired businesses have not been presented as the results were not considered material to our consolidated financial statements for all periods presented and would not have been material had the acquisitions occurred at the beginning of fiscal 2020. |
Goodwill, Tradenames, Trademark
Goodwill, Tradenames, Trademarks and Other Intangible Assets | 12 Months Ended |
Jan. 30, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | NOTE 7—GOODWILL, TRADENAMES, TRADEMARKS AND OTHER INTANGIBLE ASSETS The following sets forth the fiscal 2020 goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks ( in thousands FOREIGN FEBRUARY 1, CURRENCY JANUARY 30, 2020 ACQUISITION IMPAIRMENT TRANSLATION 2021 RH Segment Goodwill $ 124,367 $ 16,689 $ — $ 44 $ 141,100 Tradenames, trademarks and other intangible assets 48,563 6,100 — — 54,663 Waterworks Tradename (1) 37,459 — (20,459) — 17,000 (1) Presented net of an impairment charge of $35.1 million, with $20.5 million recorded in the first quarter of fiscal 2020 and $14.6 million recorded in fiscal 2018 . The following sets forth the fiscal 2019 goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks ( in thousands FOREIGN FEBRUARY 2, CURRENCY FEBRUARY 1, 2019 TRANSLATION 2020 RH Segment Goodwill $ 124,379 $ (12) $ 124,367 Tradenames, trademarks and other intangible assets 48,563 — 48,563 Waterworks (1) Tradename (2) 37,459 — 37,459 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $14.6 million recorded in fiscal 2018 . |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Jan. 30, 2021 | |
Equity Method Investments. | |
Equity Method Investments | NOTE 8—EQUITY METHOD INVESTMENTS Equity method investments represent our investments in three Aspen privately-held limited liability companies (each, an “Aspen LLC” and collectively, the “Aspen LLCs” or the “equity method investments”) which were formed during fiscal 2020, and have the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado. We hold 50 percent of the membership interests in each Aspen LLC. As we do not have a controlling financial interest in the Aspen LLCs but have the ability to exercise significant influence over the Aspen LLCs, we account for these investments using the equity method of accounting. Refer to Note 3— Significant Accounting Policies We contributed capital of $99.2 million for our membership interest in the Aspen LLCs and our investment includes $2.1 million of direct transaction costs incurred to acquire the investments. Capital contributions comprised $79.0 million in cash and $20.2 million of promissory notes receivable from the managing member that were converted into equity upon investment in the Aspen LLCs. As of January 30, 2021, an additional $13.6 million of promissory notes receivable are outstanding with the managing member, which are included in prepaid expense and other current assets The carrying amount of our investments in the Aspen LLCs differs from our underlying equity in the net assets of the Aspen LLCs, resulting in equity method basis differences upon our investment. We account for these basis differences as if the Aspen LLCs were consolidated subsidiaries, thereby affecting the determination of the amount of our share of earnings or losses of the equity method investments. During fiscal 2020, we recorded our proportionate share of equity method investments losses of $0.9 million, which is included in the consolidated statements of income and a corresponding decrease to the carrying value of e quity method investments |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Jan. 30, 2021 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 9 — Accounts payable and accrued expenses consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Accounts payable $ 224,906 $ 180,714 Accrued compensation 84,860 64,659 Accrued freight and duty 29,754 25,170 Accrued sales taxes 23,706 19,618 Accrued occupancy 17,671 12,067 Deferred consideration for asset purchase 14,387 — Accrued professional fees 5,383 4,381 Accrued catalog costs 4,354 8,267 Other accrued expenses 19,401 15,433 Total accounts payable and accrued expenses $ 424,422 $ 330,309 Other current liabilities consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Federal and state taxes payable $ 49,539 $ 13,591 Allowance for sales returns 25,559 19,206 Current portion of equipment promissory notes 22,747 22,009 Unredeemed gift card and merchandise credit liability 19,173 16,625 Finance lease liabilities 14,671 9,188 Product recall reserve 8,181 2,055 Promissory notes on asset under construction — 53,000 Other current liabilities 5,175 5,040 Total other current liabilities $ 145,045 $ 140,714 |
Other Non-Current Obligations
Other Non-Current Obligations | 12 Months Ended |
Jan. 30, 2021 | |
Other Non-Current Obligations. | |
Other Non-Current Obligations | NOTE 10—OTHER NON-CURRENT OBLIGATIONS Other non-current obligations consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Deferred payroll taxes $ 4,461 $ — Rollover units and profit interests (1) 3,490 3,064 Unrecognized tax benefits 3,114 3,020 Notes payable for share repurchases 553 18,741 Other non-current obligations 5,363 3,695 Total other non-current obligations $ 16,981 $ 28,520 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 18 — Stock-Based Compensation . |
Leases
Leases | 12 Months Ended |
Jan. 30, 2021 | |
Leases | |
Leases | NOTE 11—LEASES Lease costs—net consist of the following ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Operating lease cost (1) $ 84,852 $ 86,448 $ 87,742 Finance lease costs Amortization of leased assets (1) 41,292 36,991 28,848 Interest on lease liabilities (2) 24,011 22,608 16,785 Variable lease costs (3) 20,485 23,471 21,889 Sublease income (4) (7,723) (9,609) (7,794) Total lease costs—net $ 162,917 $ 159,909 $ 147,470 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or s elling, general and administrative expenses on the consolidated statements of income based on our accounting policy. Refer to Note 3— Significant Accounting Policies . (2) Included in interest expense—net on the consolidated statements of income. (3) Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $13.4 million, $14.6 million and $13.0 million, respectively, and charges associated with common area maintenance of $7.1 million, $8.9 million and $8.9 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. Other variable costs include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset were not material in fiscal 2020, fiscal 2019 and fiscal 2018. (4) Included as an offset to selling, general and administrative expenses on the consolidated statements of income. Lease right-of-use assets and lease liabilities consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 456,164 $ 410,904 Finance leases (1)(2) Property and equipment—net 711,804 642,117 Total lease right-of-use assets $ 1,167,968 $ 1,053,021 Liabilities Current (3) Operating leases Operating lease liabilities $ 71,524 $ 58,924 Finance leases Other current liabilities 14,671 9,188 Total lease liabilities—current 86,195 68,112 Non-current Operating leases Non-current operating lease liabilities 448,169 409,930 Finance leases Non-current finance lease liabilities 485,481 442,988 Total lease liabilities—non-current 933,650 852,918 Total lease liabilities $ 1,019,845 $ 921,030 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $133.0 million and $92.3 million as of January 30, 2021 and February 1, 2020, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. The maturities of lease liabilities are as follows as of January 30, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL 2021 $ 90,361 $ 38,786 $ 129,147 2022 79,294 39,203 118,497 2023 71,580 39,613 111,193 2024 65,332 39,984 105,316 2025 64,984 41,173 106,157 Thereafter 251,637 594,460 846,097 Total lease payments (1)(2) 623,188 793,219 1,416,407 Less—imputed interest (3) (103,495) (293,067) (396,562) Present value of lease liabilities $ 519,693 $ 500,152 $ 1,019,845 (1) Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $793.5 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of January 30, 2021, of which $28.3 million, $38.9 million, $43.9 million, $45.6 million and $47.1 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024 and fiscal 2025, respectively, and $589.7 million will be paid subsequent to fiscal 2025. (2) Excludes future commitments under short-term lease agreements of $0.7 million as of January 30, 2021. (3) Calculated using the discount rate for each lease at lease commencement. Supplemental information related to leases consists of the following: JANUARY 30, FEBRUARY 1, 2021 2020 Weighted-average remaining lease term (years) Operating leases 8.7 8.9 Finance leases 18.4 18.6 Weighted-average discount rate Operating leases 3.97% 3.82% Finance leases 5.04% 5.25% Other information related to leases consists of the following ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (75,794) $ (95,329) $ (91,965) Operating cash flows from finance leases (20,839) (25,260) (16,785) Financing cash flows from finance leases (12,498) (9,682) (6,885) Total cash outflows from leases $ (109,131) $ (130,271) $ (115,635) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 113,828 $ 34,063 $ 174,977 Finance leases 57,873 42,122 33,790 Asset Held for Sale and Sale-Leaseback Transaction During fiscal 2020, we executed a sale-leaseback transaction for the Minneapolis Design Gallery for sales proceeds of $25.5 million, which qualified for sale-leaseback accounting in accordance with ASC 842. Concurrently with the sale, we entered into an operating leaseback arrangement with an initial lease term of 20 years and a renewal option for an additional 10 years. We recognized a loss related to the execution of the sale transaction of $9.4 million in fiscal 2020, which was recorded in selling, general and administrative expenses During fiscal 2018, we committed to a plan to sell the Yountville Design Gallery, which resulted in a reclassification of such Gallery from property and equipment—net asset held for sale selling, general and administrative expenses |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Jan. 30, 2021 | |
Debt Disclosure | |
Convertible Senior Notes | NOTE 12—CONVERTIBLE SENIOR NOTES $350 million 0.00% Convertible Senior Notes due 2024 In September 2019 The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2024 Notes, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2024 Notes in connection with such make-whole fundamental change. Prior to June 15, 2024, the 2024 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after December 31, 2019, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2024 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied during both the calendar quarters ended September 30, 2020 and December 31, 2020 and, accordingly, holders were eligible to convert their 2024 Notes during the calendar quarter ended December 31, 2020 and are eligible to convert their 2024 Notes during the calendar quarter ending March 31, 2021. On and after June 15, 2024, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2024 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2024 Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. If the Company has not delivered a notice of its election of settlement method prior to the final conversion period it will be deemed to have elected combination settlement with a dollar amount per note to be received upon conversion of $1,000. We may not redeem the 2024 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require us to purchase all or a portion of their 2024 Notes for cash at a price equal to 100% of the principal amount of the 2024 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2024 Notes, we separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2024 Notes and the fair value of the liability component of the 2024 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 5.74% over the expected life of the 2024 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2024 Notes were comprised of discounts upon original issuance of $3.5 million and third party offering costs of $1.3 million. In accounting for the debt issuance costs related to the issuance of the 2024 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2024 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity (deficit). Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2024 The carrying value of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, is as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (65,818) (81,634) Net carrying amount $ 284,182 $ 268,366 Equity component (1) $ 87,252 $ 87,252 (1) Included in additional paid-in capital on the consolidated balance sheets. We recorded interest expense of $15.8 million and $5.6 million for the amortization of the debt discount related to the 2024 Notes during fiscal 2020 and fiscal 2019, respectively. 2024 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2024 Notes and exercise of the overallotment option in September 2019 additional paid-in capital We recorded a deferred tax liability of $21.7 million in connection with the debt discount associated with the 2024 Notes and recorded a deferred tax asset of $22.7 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets $335 million 0.00% Convertible Senior Notes due 2023 In June 2018 The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2023 Notes, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2023 Notes in connection with such make-whole fundamental change. Prior to March 15, 2023, the 2023 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2023 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied during both the calendar quarters ended September 30, 2020 and December 31, 2020 and, accordingly, holders were eligible to convert their 2023 Notes during the calendar quarter ended December 31, 2020 and are eligible to convert their 2023 Notes during the calendar quarter ending March 31, 2021. On and after March 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2023 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the 2023 Notes will be settled, at our election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. If the Company has not delivered a notice of its election of settlement method prior to the final conversion period it will be deemed to have elected combination settlement with a dollar amount per note to be received upon conversion of $1,000. We may not redeem the 2023 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the 2023 Notes), holders may require us to purchase all or a portion of their 2023 Notes for cash at a price equal to 100% of the principal amount of the 2023 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2023 Notes, we separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2023 Notes and the fair value of the liability component of the 2023 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 6.35% over the expected life of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2023 Notes were comprised of discounts upon original issuance of $1.7 million and third party offering costs of $4.6 million. In accounting for the debt issuance costs related to the issuance of the 2023 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2023 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity (deficit). Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2023 In December 2020, $2.4 million in aggregate principal amount of the 2023 Notes were converted at the option of the noteholders. During the first quarter of fiscal 2021 and through the date of this filing, we paid $2.4 million in cash and delivered 7,307 shares of common stock to settle the converted 2023 Notes. As a result, we recognized a loss on extinguishment of the liability component of $0.1 million in the first quarter of fiscal 2021. We also received 7,305 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below, and therefore, on a net basis issued 2 shares of our common stock in respect to such settlement of the converted 2023 Notes. The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Liability component Principal $ 335,000 $ 335,000 Less: Debt discount (47,064) (64,729) Net carrying amount $ 287,936 $ 270,271 Equity component (1) $ 90,990 $ 90,990 (1) Included in additional paid-in capital on the consolidated balance sheets. We recorded interest expense of $17.7 million, $16.5 million and $9.7 million for the amortization of the debt discount related to the 2023 Notes during fiscal 2020, fiscal 2019 and fiscal 2018, respectively. 2023 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2023 Notes and exercise of the overallotment option in June 2018 additional paid-in capital We recorded a deferred tax liability of $22.3 million in connection with the debt discount associated with the 2023 Notes and recorded a deferred tax asset of $22.5 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets $300 million 0.00% Convertible Senior Notes due 2020 In June 2015 July 2015 The initial conversion rate applicable to the 2020 Notes was 8.4656 shares of common stock per $1,000 principal amount of 2020 Notes, which was equivalent to an initial conversion price of approximately $118.13 per share. The conversion rate was subject to adjustment upon the occurrence of certain specified events, but was not adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2020 Notes, we would, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elected to convert its 2020 Notes in connection with such make-whole fundamental change. Prior to March 15, 2020, the 2020 Notes were 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 calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2020 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied during the calendar quarter ended December 31, 2019 and, accordingly, holders were eligible to convert their 2020 Notes during the calendar quarter ending March 31, 2020. In addition, on and after March 15, 2020, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders could convert all or a portion of their 2020 Notes at any time. 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, we 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 debt discount was amortized to interest expense using an effective interest rate of 6.47% over the expected life of the 2020 Notes. The equity component was not remeasured as it continued to meet the conditions for equity classification. 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. In accounting for the debt issuance costs related to the issuance of the 2020 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component were 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 were netted with the equity component in stockholders’ equity (deficit). Discounts and third party offering costs attributable to the liability component were recorded as a contra-liability and were presented net against the convertible senior notes due 2020 In May 2020, $9.4 million in aggregate principal amount of 2020 Notes were converted at the option of the noteholders. We paid $9.2 million in cash and delivered 14,927 shares of common stock to settle the converted 2020 Notes. As a result, we recognized a gain on extinguishment of the liability component of $0.2 million in the second quarter of fiscal 2020. We also received 14,927 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2020 Notes as described below, and therefore, on a net basis did not issue any shares of our common stock in respect to such settlement of the 2020 Notes. In July 2020, upon the maturity of the 2020 Notes, the remaining $290.6 million in aggregate principal amount of the 2020 Notes settled for $290.6 million in cash and 1,116,718 shares of common stock. No gain or loss arose on extinguishment of the liability component. We also received 1,116,735 shares of common stock from the exercise of the remainder of the convertible bond hedge we purchased concurrently with the issuance of the 2020 Notes as described below, and therefore, on a net basis received 17 shares of our common stock (which were recorded as treasury stock As of January 30, 2021, the 2020 Notes are no longer outstanding. As of February 1, 2020, the carrying values of the 2020 Notes, excluding the discounts upon original issuance and third party offering costs, were as follows ( in thousands FEBRUARY 1, 2020 Liability component Principal $ 300,000 Less: Debt discount (8,890) Net carrying amount $ 291,110 Equity component (1) $ 84,003 (1) Included in additional paid-in capital on the consolidated balance sheets. We recorded interest expense of $8.9 million, $18.2 million and $17.1 million for the amortization of the debt discount related to the 2020 Notes during fiscal 2020, fiscal 2019 and fiscal 2018, respectively. 2020 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2020 Notes in June 2015 additional paid-in capital As a result of the operation of the bond hedge in connection with the maturity of the 2020 Notes, we were not required to issue any new shares to settle the notes as these shares were delivered to us under the terms of the bond hedge. The bond hedge was exercised in connection with the maturity date of the 2020 Notes. During fiscal 2020, we delivered 1,386,580 shares upon exercise of the warrants under the terms of the warrant agreements. The warrants expired on January 7, 2021. We 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 liability $350 million 0.00% Convertible Senior Notes due 2019 In June 2014 The initial conversion rate applicable to the 2019 Notes was 8.6143 shares of common stock per $1,000 principal amount of 2019 Notes, which was equivalent to an initial conversion price of approximately $116.09 per share. The conversion rate was subject to adjustment upon the occurrence of certain specified events, but was not adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2019 Notes, we would, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elected to convert its 2019 Notes in connection with such make-whole fundamental change. 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, we 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 debt discount was amortized to interest expense using an effective interest rate of 4.51% over the expected life of the 2019 Notes. The equity component was not remeasured as long as it continued to meet the conditions for equity classification. 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. In accounting for the debt issuance costs related to the issuance of the 2019 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component were 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 were netted with the equity component in stockholders’ equity (deficit). Discounts, commissions payable to the initial purchasers and third party offering costs attributable to the liability component were recorded as a contra-liability and were presented net against the convertible senior notes due 2019 In June 2019, upon the maturity of the 2019 Notes, $350.0 million in aggregate principal amount of the 2019 Notes were settled for $349.0 million in cash and 42 shares of common stock. As a result, we recognized a gain on extinguishment of debt of $1.0 million during fiscal 2019. We recorded interest expense of $5.9 million and $15.1 million for the amortization of the debt discount related to the 2019 Notes in fiscal 2019 and fiscal 2018, respectively. 2019 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2019 Notes, we entered into convertible note hedge transactions whereby we had the option to purchase a total of approximately 3.015 million shares of our common stock at a price of approximately $116.09 per share. The total cost of the convertible note hedge transactions was approximately $73.3 million. The convertible note hedge terminated upon the maturity date of the 2019 Notes. In addition, we sold warrants whereby the holders of the warrants had the option to purchase a total of approximately 3.015 million shares of our common stock at a price of $171.98 per share. We 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 were 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 met certain accounting criteria, the convertible note hedges and warrants were recorded in stockholders’ equity (deficit), were not accounted for as derivatives and were 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 During fiscal 2019, we delivered approximately 167,100 shares upon exercise of the warrants under the terms of the warrant agreements. The warrants expired on December 6, 2019. We 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 were included in deferred tax assets liability |
Credit Facilities
Credit Facilities | 12 Months Ended |
Jan. 30, 2021 | |
Debt Disclosure | |
Credit Facilities | NOTE 13—CREDIT FACILITIES The outstanding balances under our credit facilities were as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 37,532 (171) 37,361 53,372 (310) 53,062 Total credit facilities $ 37,532 $ (171) $ 37,361 $ 53,372 $ (310) $ 53,062 (1) Deferred financing fees associated with the asset based credit facility as of January 30, 2021 and February 1, 2020 were $1.5 million and $2.6 million, respectively, and are included in other non-current assets on the consolidated balance sheets. The deferred financing fees are amortized on a straight line basis over the life of the revolving line of credit, which has a maturity date of June 28, 2022. (2) Represents total equipment security notes secured by certain of our property and equipment, of which $22.7 million outstanding was included in other current liabilities on the consolidated balance sheets. The remaining $14.8 million outstanding, included in o ther non-current obligations on the consolidated balance sheets, has principal payments due of $13.6 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. Asset Based Credit Facility & Term Loan Facilities 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 (the “Original Credit Agreement”). On June 28, 2017, Restoration Hardware, Inc. entered into an eleventh amended and restated credit agreement (as amended, the “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 (“First Lien Administrative Agent”), which amended and restated the Original Credit Agreement. The Credit Agreement has a revolving line of credit with initial availability of up to $600.0 million, of which $10.0 million is available to Restoration Hardware Canada, Inc., and includes a $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 $800.0 million if and to the extent the lenders, whether existing lenders or new lenders, agree to increase their credit commitments. In addition, the Credit Agreement established an $80.0 million last in, last out (“LILO”) term loan facility. The maturity date of the Credit Agreement is June 28, 2022. In June 2018, we repaid the LILO term loan in full. As a result of the repayment, we incurred a $0.5 million loss on extinguishment of debt in fiscal 2018, which represents the acceleration of amortization of debt issuance costs. We did not incur any prepayment penalties upon the early extinguishment of the LILO term loan. On June 12, 2018, Restoration Hardware, Inc. entered into a First Amendment (the “First Amendment”) to the Credit Agreement. The First Amendment (a) changed 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 (b) clarified 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 our borrowing base for eligible collateral for purposes of determining the amount of borrowing available to borrowers under the Credit Agreement. On November 23, 2018, Restoration Hardware, Inc. entered into a Consent and Second Amendment (the “Second Amendment”) to the Credit Agreement. The Second Amendment included certain clarifying changes to among other things: (a) address the processing of payments from insurance proceeds in connection with casualty or other insured losses with respect to property or assets of a Loan Party, and (b) add an additional category of permitted restricted payment to allow the lead borrower to make annual restricted payments of up to $3 million per fiscal year to cover payments of certain administrative and other obligations of RH in the ordinary course of business. On April 4, 2019, Restoration Hardware, Inc., entered into a third amendment to the Credit Agreement (the “Third Amendment”). The Third Amendment, among other things, (a) established a $120.0 million first in, last out (“FILO”) term loan facility, which amount was fully borrowed as of April 4, 2019 and which incurs interest at a rate that is 1.25% greater than the interest rate applicable to the revolving loans provided for under the Credit Agreement at any time, (b) provided for additional permitted indebtedness, as defined in the Credit Agreement, that the loan parties can incur, and (c) modified the borrowing availability under the Credit Agreement in certain circumstances. We repaid the full amount of the FILO term loan as of February 1, 2020. As a result of the repayment, we incurred a $0.8 million loss on extinguishment of debt in fiscal 2019, which represents the acceleration of amortization of debt issuance costs. We did not incur any prepayment penalties upon the early extinguishment of the FILO term loan. On May 31, 2019, Restoration Hardware, Inc. entered into a fourth amendment to the Credit Agreement (the “Fourth Amendment”). The Fourth Amendment, among other things, amended the Credit Agreement to (a) extend the time to deliver monthly financial statements to the lenders for the fiscal months ending February 2019 and March 2019 until June 19, 2019, (b) remove the requirement to deliver monthly financial statements to the lenders for the last fiscal month of any fiscal quarter, and (c) waive any default or event of default under the Credit Agreement relating to the delivery of monthly financial statements or other information to lenders for the fiscal months ending February 2019 and March 2019. The availability of credit at any given time under the Credit Agreement is limited by reference to a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable. As a result of the borrowing base formula, actual borrowing availability under the revolving line of credit could be less than the stated amount of the revolving line of credit (as reduced by the actual borrowings and outstanding letters of credit under the revolving line of credit). All obligations under the Credit Agreement are secured by substantially all of the assets, including accounts receivable, inventory, intangible assets, property, equipment, goods and fixtures of Restoration Hardware, Inc., Restoration Hardware Canada, Inc., RH US, LLC, Waterworks Operating Co., LLC and Waterworks IP Co., LLC. Borrowings under the revolving line of credit are subject to interest, at the borrowers’ option, at either the bank’s reference rate or London Inter-bank Offered Rate (“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. The Credit Agreement also contains various affirmative covenants, including the obligation to deliver notice to the First Lien Administrative Agent following our obtaining knowledge of any matter that has resulted or could reasonably be expected to result in a “Material Adverse Effect” (as defined in the Credit Agreement). In addition, under the Credit Agreement, we are required to meet specified financial ratios in order to undertake certain actions, and we may be required to maintain certain levels of excess availability or meet a specified consolidated fixed-charge coverage ratio (“FCCR”). Subject to certain exceptions, the trigger for the FCCR occurs if the domestic availability under the revolving line of credit is less than the greater of (i) $40.0 million and (ii) 10% of the lesser of (x) the domestic revolving commitments under the Credit Agreement and (y) the domestic revolving borrowing base. If the availability under the Credit Agreement is less than the foregoing amount, then Restoration Hardware, Inc. is required subject to certain exceptions to maintain an FCCR of at least one to one. As of January 30, 2021, Restoration Hardware, Inc. was in compliance with all applicable financial covenants of the Credit Agreement. The Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) the availability under the revolving line of credit for extensions of credit is less than the greater of (A) $40.0 million and (B) 10% of the sum of (a) the lesser of (x) the aggregate revolving commitments under the Credit Agreement and (y) the aggregate revolving borrowing base, plus (b) the lesser of (x) the then outstanding amount of the LILO term loan or (y) the LILO term loan borrowing base. The Credit Agreement includes customary events of default, in certain cases subject to customary periods to cure. The occurrence of an event of default, following the applicable cure period, would permit the lenders to, among other things, terminate any existing commitments under the Credit Agreement and declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the Credit Agreement to be immediately due and payable. As of January 30, 2021, we had no outstanding borrowings under the revolving credit facility portion of the Credit Agreement. The availability of credit at any given time under the Credit Agreement is limited by reference to a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable. As a result of the borrowing base formula, actual borrowing availability under the revolving line of credit could be less than the stated amount of the revolving line of credit (as reduced by the actual borrowings and outstanding letters of credit under the revolving line of credit). Under the terms of such provisions, the amount under the revolving line of credit borrowing base that could be available pursuant to the Credit Agreement as of January 30, 2021 was $271.9 million, net of $15.4 million in outstanding letters of credit. Second Lien Credit Agreement On April 10, 2019, Restoration Hardware, Inc., entered into a credit agreement, dated as of April 9, 2019 and effective as of April 10, 2019 (the “Second Lien Credit Agreement”), among (i) Restoration Hardware, Inc., as lead borrower, (ii) the guarantors party thereto, (iii) the lenders party thereto, each of whom were managed or advised by either Benefit Street Partners L.L.C. and its affiliated investment managers or Apollo Capital Management, L.P. and its affiliated investment managers, and (iv) BSP Agency, LLC, as administrative agent and collateral agent (the “Second Lien Administrative Agent”) with respect to a second lien term loan in an aggregate principal amount equal to $200.0 million with a maturity date of April 9, 2024 (the “Second Lien Term Loan”). The second lien term loan of $200.0 million in principal was repaid in full on September 20, 2019. As a result of the repayment, we incurred a $6.7 million loss on extinguishment of debt, which includes a prepayment penalty of $4.0 million and acceleration of amortization of debt issuance costs of $2.7 million. The Second Lien Term Loan bore interest at an annual rate generally based on LIBOR plus 6.50%. This rate was a floating rate that reset periodically based upon changes in LIBOR rates during the life of the Second Lien Term Loan. At the date of the initial borrowing, the rate was set at one-month LIBOR plus 6.50%. Intercreditor Agreement On April 10, 2019, in connection with the Second Lien Credit Agreement, Restoration Hardware, Inc. entered into an Intercreditor Agreement (the “Intercreditor Agreement”), dated as of April 9, 2019 and effective as of April 10, 2019, with the First Lien Administrative Agent and the Second Lien Administrative Agent. The Intercreditor Agreement established various customary inter-lender terms, including, without limitation, with respect to priority of liens, permitted actions by each party, application of proceeds, exercise of remedies in case of default, releases of liens and certain limitations on the amendment of the Credit Agreement and the Second Lien Credit Agreement without the consent of the other party. The Intercreditor Agreement is no longer in effect after repayment of the Second Lien Term Loan on September 20, 2019. Equipment Loan Facility On September 5, 2017, Restoration Hardware, Inc. entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC (“BAL”) pursuant to which BAL and we agreed that BAL would finance certain equipment of ours from time to time, with each such equipment financing to be evidenced by an equipment security note setting forth the terms for each particular equipment loan. Each equipment loan is secured by a purchase money security interest in the financed equipment. As of January 30, 2021, the equipment security notes bore interest at a weighted-average rate of 4.56%. The maturity dates of the equipment security notes vary, but generally have a maturity of three |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jan. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 14—FAIR VALUE MEASUREMENTS Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining the fair value, we utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs of the valuation technique. The degree of judgment used in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. Financial instruments with readily available active quoted prices for which fair value can be measured generally will have a higher degree of pricing observability and a lesser degree of judgment used in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment used in measuring fair value. Our financial assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1—Quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Level 3—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs used in the determination of fair value require significant judgment or estimation. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair Value Measurements—Recurring Amounts reported as cash and equivalents, receivables, and accounts payable and accrued expenses approximate fair value due to the short-term nature of activity within these accounts. The estimated fair value of the asset based credit facility approximates cost as the interest rate associated with the facility is variable and resets frequently. The estimated fair value and carrying value of the 2020 Notes, 2023 Notes and 2024 Notes were as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2020 (2) $ — $ — $ 295,573 $ 291,110 Convertible senior notes due 2023 301,794 287,936 272,623 270,271 Convertible senior notes due 2024 286,161 284,182 255,849 268,366 (1) Carrying value represents the principal amount less the equity component of the 2020 Notes, 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. (2) The 2020 Notes matured on July 15, 2020. The fair value of each of the 2020 Notes, 2023 Notes and 2024 Notes was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the trading price of our convertible notes, when available, our stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2). Fair Value Measurements—Non-Recurring The fair value of the Waterworks tradename was determined based on unobservable (Level 3) inputs and valuation techniques, as discussed in “Impairment” within Note 3— Significant Accounting Policies The fair value of the acquired goodwill and tradename associated with the acquisitions in fiscal 2020, as discussed in Note 6— Business Combinations The fair value of the real estate assets associated with our investment in the Aspen LLCs in fiscal 2020, as discussed in discussed in “Equity Method Investments” within Note 3— Significant Accounting Policies Equity Method Investments |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Income Taxes | NOTE 15—INCOME TAXES The following is a summary of our income before income taxes, inclusive of our share of equity method investments losses ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Domestic $ 378,267 $ 267,538 $ 157,827 Foreign (1,854) 1,644 3,137 Total $ 376,413 $ 269,182 $ 160,964 The following is a summary of our income tax expense ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Current Federal $ 85,708 $ 45,985 $ 24,012 State 23,684 10,806 6,275 Foreign 126 403 1,270 Total current tax expense 109,518 57,194 31,557 Deferred Federal (2,251) (7,173) (4,428) State (2,536) (1,477) (2,049) Foreign (133) 263 153 Total deferred tax benefit (4,920) (8,387) (6,324) Total income tax expense $ 104,598 $ 48,807 $ 25,233 A reconciliation of the federal statutory tax rate to our effective tax rate is as follows: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Provision at federal statutory tax rate 21.0 % 21.0 % 21.0 % Non-deductible stock-based compensation 6.5 — — State income taxes—net of federal tax impact 4.2 2.5 1.7 Tax rate adjustments and other 0.3 0.2 0.1 Stock compensation—excess benefits (4.9) (6.6) (9.9) Goodwill impairment — — 1.8 Valuation allowance 0.1 — 0.3 Other permanent items 0.6 1.0 0.7 Effective tax rate 27.8 % 18.1 % 15.7 % We have recorded deferred tax assets and liabilities based upon estimates of their realizable value, such estimates are based upon likely future tax consequences. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, we record a valuation allowance. Significant components of our deferred tax assets and liabilities are as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Non-current deferred tax assets (liabilities) Lease liabilities $ 275,517 $ 249,243 Stock-based compensation 24,922 22,400 Accrued expenses 21,308 21,362 Merchandise inventories 9,097 8,028 Deferred lease credits 4,917 6,395 Net operating loss carryforwards 1,988 1,763 Convertible senior notes 914 717 Deferred revenue 635 2,235 Other 2,269 1,846 Non-current deferred tax assets—net 341,567 313,989 Valuation allowance (2,049) (1,007) Non-current deferred tax assets $ 339,518 $ 312,982 Property and equipment $ (147,143) $ (137,448) Lease right-of-use assets (122,306) (110,075) Tradename, trademarks and intangibles (10,349) (13,026) Prepaid expense and other (8,010) (4,882) State benefit (1,786) (2,546) Non-current deferred tax liabilities (289,594) (267,977) Total net non-current deferred tax assets $ 49,924 $ 45,005 A reconciliation of our valuation allowance against deferred tax assets in certain state and foreign jurisdictions due to historical losses is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, 2021 2020 Balance at beginning of fiscal year $ 1,007 $ 1,623 Net changes in deferred tax assets and liabilities 1,042 (616) Balance at end of fiscal year $ 2,049 $ 1,007 As of January 30, 2021, we had state net operating loss carryovers of $5.0 million and foreign net operating loss carryovers of $12.3 million. The state net operating loss carryovers will begin to expire in 2022, and the foreign net operating loss carryovers will begin to expire in 2023. Internal Revenue Code Section 382 and similar state rules place a limitation on the amount of taxable income which can be offset by net operating loss carryforwards after a change in ownership (generally greater than 50% change in ownership). We cannot give any assurances that it will not undergo an ownership change in the future resulting in further limitations on utilization of net operating losses. A reconciliation of the exposures related to unrecognized tax benefits is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Balance at beginning of fiscal year $ 8,514 $ 8,459 $ 8,152 Gross increases (decreases)—prior period tax positions (129) (2) 239 Gross increases—current period tax positions 690 438 375 Reductions based on the lapse of the applicable statutes of limitations (619) (381) (307) Balance at end of fiscal year $ 8,456 $ 8,514 $ 8,459 As of January 30, 2021, $7.7 million of our unrecognized tax benefits 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. In October 2017, we filed an amended federal tax return claiming a $5.4 million refund, however, no income tax benefit has been recorded in any fiscal year given the technical nature and amount of the refund claim. An income tax benefit related to this refund claim could be recorded in a future period upon settlement with the respective taxing authority. As of January 30, 2021, we have $6.2 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months. We account for interest and penalties related to exposures as a component of income tax expense. We had interest accruals of $0.5 million associated with exposures as of both January 30, 2021 and February 1, 2020. We are subject to taxation in the United States and various states and foreign jurisdictions. As of January 30, 2021, we are subject to examination by the tax authorities for fiscal 2016 through fiscal 2019. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Jan. 30, 2021 | |
Net Income Per Share | |
Net Income Per Share | NOTE 16—NET INCOME PER SHARE The weighted-average shares used for net income per share are as follows: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average shares—basic 19,668,976 19,082,303 21,613,678 Effect of dilutive stock-based awards 5,470,980 4,554,682 4,567,303 Effect of dilutive convertible senior notes (1) 2,162,312 662,049 352,244 Weighted-average shares—diluted 27,302,268 24,299,034 26,533,225 (1) The 2019 Notes, 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices of $116.09 per share, $118.13 per share, $193.65 per share and $ 211.40 per share, respectively. The 2019 Notes matured on June 15, 2019 and did not have an impact of our dilutive share count post-maturity. The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2019 Notes, 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices of $171.98 per share, $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2019 Notes and 2020 Notes expired through December 2019 and January 2021, respectively. While the share price for our common stock trades above the applicable conversion price of each series of notes or the applicable exercise price of each series of warrants for the notes, these instruments will have a dilutive effect with respect to our common stock to the extent that the price per share of our common stock continues to exceeds the applicable conversion or exercise price of the notes and warrants. Refer to Note 12— Convertible Senior Notes . The following number of options and restricted stock units were excluded from the calculation of diluted net income per share because their inclusion would have been anti-dilutive: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Options 389,830 360,496 351,145 Restricted stock units 316 — 2,625 Total anti-dilutive stock-based awards 390,146 360,496 353,770 |
Share Repurchases and Share Ret
Share Repurchases and Share Retirements | 12 Months Ended |
Jan. 30, 2021 | |
Share Repurchases and Share Retirements | |
Share Repurchases and Share Retirements | NOTE 17—SHARE REPURCHASES AND SHARE RETIREMENTS Share Repurchase Program In 2018, our Board of Directors authorized a share repurchase program. In fiscal 2018, we repurchased approximately 2.0 million shares of our common stock under this share repurchase program at an average price of $122.10 per share, for an aggregate repurchase amount of approximately $250.0 million. In fiscal 2019, we repurchased approximately 2.2 million shares of our common stock under this program at an average price of $115.36 per share, for an aggregate repurchase amount of approximately $250.0 million. We did not make any repurchases under this program during fiscal 2020. The total current authorized size of the share purchase program is up to $950 million (the “950 Million Repurchase Program”) of which $450.0 million remained available as of January 30, 2021 for future share investments under this share repurchase program. Share Repurchases Under Equity Plans As of January 30, 2021 and February 1, 2020, the aggregate unpaid principal amount of notes payable for share repurchases was $0.6 million and $18.7 million, respectively, which was recorded in other non-current obligations Share Retirements In fiscal 2020, we retired 600 shares of our common stock related to shares we had repurchased under equity plans and we retired 17 shares of our common stock related to shares we received upon the maturity of the 2020 Notes (refer to Note 12— Convertible Senior Notes treasury stock additional paid-in capital In fiscal 2019, we retired 2,170,154 shares of our common stock related to shares we had repurchased under the $950 Million Repurchase Program. As a result of this retirement, we reclassified a total of $250.3 million from treasury stock additional paid-in capital retained earnings (accumulated deficit) In fiscal 2018, we retired 22,267,711 shares of our common stock related to shares we had repurchased under the $300 Million Repurchase Program, $700 Million Repurchase Program and $950 Million Repurchase Program. As a result of this retirement, we reclassified a total of $1,250.3 million from treasury stock additional paid-in capital retained earnings (accumulated deficit) There was no impact on the consolidated statements of income or cash flows related to these share retirement activities. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jan. 30, 2021 | |
Stock-Based Compensation. | |
Stock-Based Compensation | NOTE 18—STOCK-BASED COMPENSATION We recorded stock-based compensation expense of $145.7 million, $21.8 million and $24.0 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. No stock-based compensation cost has been capitalized in the accompanying consolidated financial statements. Chairman and Chief Executive Officer Option Grant On October 18, 2020, our Board of Directors granted Mr. Friedman an option to purchase 700,000 shares of our common stock with an exercise price equal to $385.30 per share under the 2012 Stock Incentive Plan. The option contains selling restrictions on the underlying shares that lapse upon the achievement of both time-based service requirements and stock price performance-based metrics as described further below. The option is fully vested on the date of grant but the shares underlying the option remain subject to transfer restrictions to the extent the performance-based and time-based requirements have not been met. The option will result in aggregate non-cash stock compensation expense of $173.6 million, of which $117.1 million was recognized in fiscal 2020 (which is included in the stock-based compensation expense recorded in fiscal 2020 noted above). As of January 30, 2021, the total unrecognized compensation expense was $56.5 million, which will be recognized on an accelerated basis through May 2025. Time-Based Restrictions The time-based restrictions are measured over a four-year performance year period which will begin in May 2021, on the anniversary of the option granted to Mr. Friedman in 2017. The time-based restrictions will lapse at the end of each of the successive anniversary dates from May 2022 through May 2025 at a rate of 175,000 shares per year if (i) Mr. Friedman remains in service with us at the end of such year with the authority, duties, or responsibilities of a chief executive officer at such date and (ii) the stock price performance-based metrics have been achieved in such year as described further below. Performance-Based Restrictions The stock price performance-based restrictions of the option are measured annually over the performance year period and may lapse as to only one-quarter of the option in each of the first four Any selling restrictions that have not lapsed in any performance year during the first four performance years may be achieved in a successive performance year through the end of the eighth performance year which ends in May 2029, provided Mr. Friedman continues to satisfy the service requirement through the date the performance target is achieved. Any selling restrictions that have not lapsed by the end of the eighth performance year will thereafter only lapse in May 2041, the 20th anniversary of the beginning of the first performance year. 2012 Stock Incentive Plan and 2012 Stock Option Plan The Restoration Hardware 2012 Stock Incentive Plan (the “Stock Incentive Plan”) was adopted on November 1, 2012. The Stock Incentive Plan provides for the grant of incentive stock options to our employees, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants. The Restoration Hardware 2012 Stock Option Plan (the “Option Plan”) was adopted on November 1, 2012 and on such date 6,829,041 fully vested options were granted under this plan to certain of our employees and advisors. Aside from these options granted on November 1, 2012, no other awards will be granted under the Option Plan. As of February 1, 2020, there were a total of 1,630,107 shares issuable under the Stock Incentive Plan. On February 3, 2020, an additional 384,734 shares became issuable under the Stock Incentive Plan in accordance with the Stock Incentive Plan evergreen provision, increasing the total number of shares issuable under the Stock Incentive Plan to 2,014,841. Awards under the plans reduce the number of shares available for future issuance. Cancellations and forfeitures of awards previously granted under the Stock Incentive Plan increase the number of shares available for future issuance. Cancellations and forfeitures of awards previously granted under the Option Plan are immediately retired and are no longer available for future issuance. The number of shares available for future issuance under the Stock Incentive Plan as of January 30, 2021 was 427,062. Shares issued as a result of award exercises under the Stock Incentive Plan and Option Plan will be funded with the issuance of new shares. On February 1, 2021 an additional 419,908 shares became issuable under the Stock Incentive Plan in accordance with the Stock Incentive Plan evergreen provision. 2012 Stock Incentive Plan and 2012 Stock Option Plan—Stock Options A summary of stock option activity under the Stock Incentive Plan and the Option Plan is as follows: WEIGHTED-AVERAGE OPTIONS EXERCISE PRICE Outstanding—February 1, 2020 7,134,735 $ 58.34 Granted 1,769,200 273.61 Exercised (292,949) 49.08 Cancelled (133,480) 130.36 Outstanding—January 30, 2021 8,477,506 $ 102.44 The fair value of stock options issued was estimated on the date of grant using the following assumptions: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Expected volatility 58.9 % 55.7 % 54.7 % Expected life (years) 8.3 7.1 6.7 Risk-free interest rate 0.6 % 2.3 % 2.9 % Dividend yield — — — A summary of additional information about stock options is as follows: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average fair value per share of stock options granted $ 168.90 $ 63.35 $ 69.60 Aggregate intrinsic value of stock options exercised (in thousands) 75,011 82,718 77,311 Fair value of stock options vested (in thousands) 12,429 11,816 13,915 Information about stock options outstanding, vested or expected to vest, and exercisable as of January 30, 2021 is as follows: OPTIONS OUTSTANDING OPTIONS EXERCISABLE WEIGHTED- AVERAGE WEIGHTED- WEIGHTED- REMAINING AVERAGE AVERAGE NUMBER OF CONTRACTUAL EXERCISE NUMBER OF EXERCISE RANGE OF EXERCISE PRICES OPTIONS LIFE (IN YEARS) PRICE OPTIONS PRICE $25.39 — 751,494 4.99 $ 36.12 480,864 $ 35.84 $46.50 — 2,876,826 1.75 46.50 2,876,826 46.50 $50.00 — $75.43 2,283,990 4.23 62.51 2,271,830 62.54 $79.32 — $154.82 1,479,721 8.11 127.00 234,466 97.03 $156.40 — $442.26 1,073,475 9.62 345.49 702,975 384.43 $500.99 — $500.99 12,000 9.97 500.99 — — Total 8,477,506 $ 102.49 6,566,961 $ 89.25 Vested or expected to vest 7,977,838 $ 98.59 The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of January 30, 2021 was $3,161.7 million, $3,006.0 million, and $2,535.6 million, respectively. Stock options exercisable as of January 30, 2021 had a weighted-average remaining contractual life of 3.92 years. We recorded stock-based compensation expense related to stock options of $140.4 million, $14.0 million and $13.6 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. The fiscal 2020 expense includes $117.1 million associated with the option grant to Mr. Friedman in October 2020 (refer to Chairman and Chief Executive Officer Option Grant Chairman and Chief Executive Officer Option Grant 2012 Stock Incentive Plan—Restricted Stock Awards We grant restricted stock awards, which include restricted stock and restricted stock units, to our employees and members of our Board of Directors. A summary of restricted stock award activity is as follows: WEIGHTED- AVERAGE GRANT DATE FAIR INTRINSIC AWARDS VALUE VALUE Outstanding—February 1, 2020 219,985 $ 49.00 Granted 6,642 371.36 Released (113,797) 58.96 Cancelled (20,580) 43.92 Outstanding—January 30, 2021 92,250 $ 61.04 $ 43,851,960 A summary of additional information about restricted stock awards is as follows: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average fair value per share of awards granted $ 371.36 $ 129.21 $ 111.38 Grant date fair value of awards released (in thousands) 6,710 10,522 11,477 We recorded stock-based compensation expense related to restricted stock awards of $4.9 million, $7.3 million and $10.0 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. As of January 30, 2021, the total unrecognized compensation expense related to unvested restricted stock awards was $2.9 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 0.83 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 consolidated statements of income. The fair value of the Appreciation Rights is determined based on an option-pricing model (“OPM”). We did not record any expense related to the Appreciation Rights during fiscal 2020, fiscal 2019 or fiscal 2018. As of both January 30, 2021 and February 1, 2020, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations Profit Interests In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the consolidated statements of income. The fair value of the Profit Interests is determined based on an OPM. We recorded $0.4 million, $0.5 million and $0.4 million of stock-based compensation expense related to the Profit Interests in fiscal 2020, fiscal 2019 and fiscal 2018, respectively, which is included in selling, general and administrative expenses other non-current obligations |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Jan. 30, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | NOTE 19—EMPLOYEE BENEFIT PLANS We have a 401(k) plan for our employees who meet certain service and age requirements. Participants may contribute up to 50% of their salaries limited to the maximum allowed by the Internal Revenue Service regulations. We, at our discretion, may contribute funds to the 401(k) plan. We made no contributions to the 401(k) plan during fiscal 2020, fiscal 2019 or fiscal 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 30, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 20—COMMITMENTS AND CONTINGENCIES Commitments We had no material off balance sheet commitments as of January 30, 2021. Contingencies We are involved in lawsuits, claims, investigations and other legal proceedings incident to the ordinary course of our business. These disputes are increasing in number as the business expands and we grow larger. Litigation is inherently unpredictable. As a result, the outcome of matters in which we are involved could result in unexpected expenses and liability that could adversely affect our operations. In addition, any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of our senior leadership team’s time and result in the diversion of significant operational resources. We review the need for any loss contingency reserves and establishes reserves when, in the opinion of our senior leadership team, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that we do establish a reserve, there can be no assurance that any such recorded liability for estimated losses will be for the appropriate amount, and actual losses could be higher or lower than what we accrue from time to time. Although we believe that the ultimate resolution of our current legal proceedings will not have a material adverse effect on our consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty. 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, Case No. 17-cv-00554. 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 asserted claims purportedly on behalf of a class of purchasers of our 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 our inventory levels. The complaint sought class certification, monetary damages, and other appropriate relief, including an award of costs and attorneys’ fees. On March 21, 2019, we and the individual defendants in the case entered into a binding memorandum of understanding to settle the case. The settlement amount was $50 million, which was funded entirely by our insurance carriers. On May 6, 2019, the plaintiffs filed a motion for preliminary approval of the proposed settlement together with a settlement agreement executed by both parties. On June 21, 2019, the court issued an order preliminarily approving the settlement. On October 25, 2019, the court granted final approval of the settlement and entered a final judgment dismissing the action. As a result of the court approval and adjudication of the claims in 2019, as well as our insurance carriers funding the settlement amount, we have derecognized the provision for legal settlement and unpaid legal fees within other current liabilities and the associated litigation insurance recovery receivable on the consolidated balance sheets as of January 30, 2021, which settlement resolved all of the claims that were or could have been brought in the action. 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., Case No. 18-cv-02452. On June 29, 2018, Hosrof Izmirliyan filed a similar purported shareholder derivative complaint in the same forum, captioned Izmirliyan v. Friedman et al., Case No. 18-cv-03930. On July 29, 2018, the court consolidated both derivative actions, and the consolidated action is captioned In re RH Shareholder Derivative Litigation, Case No. 18-cv-02452. On August 24, 2018, plaintiffs filed an amended complaint that named the Company as a nominal defendant and Gary Friedman, Karen Boone, Carlos Alberini, Keith Belling, Eri Chaya, Mark Demilio, Katie Mitic, Ali Rowghani and Leonard Schlesinger as defendants. The allegations substantially tracked those in the securities class action described above. Plaintiffs brought 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 plaintiffs also alleged insider trading and misappropriation of information claims against two of the individual defendants. The amended complaint sought monetary damages, corporate governance changes, restitution, and an award of costs and attorneys’ fees. On September 28, 2018, we filed a motion to stay proceedings and a motion to dismiss the consolidated complaint. On January 23, 2019, the court granted the motion to stay the case pending resolution of the securities class action discussed above. On March 19, 2020, the parties reached an agreement in principle to settle the litigation and subsequently entered into a stipulation of settlement that was preliminarily approved by the Court on August 3, 2020. The settlement involved certain non-monetary terms as well as payment of the plaintiffs’ attorneys’ legal fees, which payment was funded entirely by our insurance carriers. On October 6, 2020, the Court held a final settlement hearing. On December 18, 2020, the court granted final approval of the settlement and entered a final judgment dismissing the action. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jan. 30, 2021 | |
Segment Reporting | |
Segment Reporting | NOTE 21—SEGMENT REPORTING We define reportable and operating segments on the same basis that we use to evaluate our performance internally by the Chief Operating Decision Maker (the “CODM”), which we have determined is our Chief Executive Officer. We have three operating segments: RH Segment, Waterworks and Real Estate Development. The RH Segment and Waterworks operating segments (the “retail operating segments”) include all sales channels accessed by our customers, including sales through retail locations and outlets, websites, source books, and the commercial channel. The Real Estate Development segment represents operations associated with our equity method investments entered into in fiscal 2020, as described in Note 8— Equity Method Investments. The retail operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared senior leadership team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. We use operating income to evaluate segment profitability for the retail operating segments. Operating income is defined as net income before interest expense—net, goodwill and tradename impairment, (gain) loss on extinguishment of debt—net, income tax expense and our share of equity method investment losses. Segment Information The following table presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting (in thousands) YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 2,729,422 $ 119,204 $ 2,848,626 $ 2,514,296 $ 133,141 $ 2,647,437 $ 2,375,472 $ 130,181 $ 2,505,653 Gross profit 1,274,148 51,383 1,325,531 1,038,722 56,289 1,095,011 933,805 51,772 985,577 Depreciation and amortization 95,071 4,969 100,040 96,148 4,591 100,739 86,719 4,653 91,372 In fiscal 2020, the Real Estate Development segment share of equity method investments losses was $0.9 million. The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting (in thousands) JANUARY 30, FEBRUARY 1, 2021 2020 REAL ESTATE RH SEGMENT WATERWORKS INVESTMENTS TOTAL RH SEGMENT WATERWORKS TOTAL Goodwill (1) $ 141,100 $ — $ — $ 141,100 $ 124,367 $ — $ 124,367 Tradenames, trademarks and other intangible assets (2) 54,663 17,000 — 71,663 48,563 37,459 86,022 Equity method investments — — 100,603 100,603 — — — Total assets 2,659,944 137,766 100,603 2,898,313 2,301,823 143,871 2,445,694 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of February 2, 2019, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) The Waterworks reporting unit tradename is presented net of an impairment charge of $35.1 million, of which $20.5 million was recorded in the first quarter of fiscal 2020 and $14.6 million was recorded in fiscal 2018. We use segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) a non-cash compensation charge related to a fully vested option grant made to Mr. Friedman in October 2020, (ii) asset impairments and changes in useful lives, (iii) gain (loss) on sale leaseback transactions, (iv) product recall accruals and adjustments—net, (v) severance costs associated with reorganizations, (vi) legal settlements, net of legal expenses, (vii) asset held for sale gain, (viii) disposals of inventory and property and equipment, lease related charges, inventory transfer costs and other costs and adjustments associated with distribution center closures, and (ix) non-cash amortization of the inventory fair value adjustment recorded in connection with the Waterworks acquisition. These items are excluded from segment operating income in order to provide better transparency of segment operating results. Accordingly, these items are not presented by segment because they are excluded from the segment profitability measure that the CODM and our senior leadership team reviews. The following table presents, for our retail operating segments, the segment operating income (loss) and income before income taxes ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Operating income (loss): RH Segment $ 616,523 $ 375,315 $ 288,106 Waterworks 4,019 3,780 (922) Non-cash compensation (117,084) — — Asset impairments and change in useful lives (12,851) (21,899) (7,218) Gain (loss) on sale leaseback transaction (9,352) 1,196 (8,497) Recall accrual (7,370) 3,988 (1,619) Reorganization related costs (7,027) (1,075) (9,977) Legal settlements — 1,193 5,289 Asset held for sale gain — 333 — Distribution center closures — — (3,046) Impact of inventory step-up — — (380) Income from operations 466,858 362,831 261,736 Interest expense—net 69,250 87,177 67,769 Goodwill and tradename impairment 20,459 — 32,086 (Gain) loss on extinguishment of debt—net (152) 6,472 917 Income before income taxes $ 377,301 $ 269,182 $ 160,964 We classify our sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor. Net revenues in each category were as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Furniture $ 1,940,658 $ 1,762,034 $ 1,635,631 Non-furniture 907,968 885,403 870,022 Total net revenues $ 2,848,626 $ 2,647,437 $ 2,505,653 During fiscal 2020, we reviewed our segments and product lines and updated certain products and categories in our reporting of furniture and non-furniture product lines. While this reporting change did not impact our consolidated results, prior period segment data has been recast for consistency in reporting. We are domiciled in the United States and primarily operate our retail locations and outlets in the United States. As of January 30, 2021, we operated 4 retail locations and 2 outlets in Canada, and 1 retail location in the U.K. Geographic revenues in Canada and the U.K. are based upon revenues recognized at the retail locations in the respective country and were not material in any fiscal period presented. Long-lived assets held internationally were not material in any fiscal period presented. No single customer accounted for more than 10% of our revenues in fiscal 2020, fiscal 2019 or fiscal 2018. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Jan. 30, 2021 | |
Selected Quarterly Financial Data (Unaudited) | |
Selected Quarterly Financial Data (Unaudited) | NOTE 22—SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly financial data for fiscal 2020 and fiscal 2019 are set forth below ( in thousands, except share and per share amounts THREE MONTHS ENDED MAY 2, AUGUST 1, OCTOBER 31, JANUARY 30, FISCAL 2020 2020 2020 2020 2021 Net revenues $ 482,895 $ 709,282 $ 844,013 $ 812,436 Gross profit 199,654 332,419 408,330 385,128 Net income (loss) (3,212) 98,423 46,411 130,193 Weighted-average shares used in computing basic net income (loss) per share 19,242,641 19,386,115 19,552,836 20,518,130 Basic net income (loss) per share $ (0.17) $ 5.08 $ 2.37 $ 6.35 Weighted-average shares used in computing diluted net income (loss) per share 19,242,641 26,564,705 28,286,124 30,179,506 Diluted net income (loss) per share $ (0.17) $ 3.71 $ 1.64 $ 4.31 THREE MONTHS ENDED MAY 4, AUGUST 3, NOVEMBER 2, FEBRUARY 1, FISCAL 2019 2019 2019 2019 2020 Net revenues $ 598,421 $ 706,514 $ 677,526 $ 664,976 Gross profit 232,814 294,958 284,166 283,073 Net income 35,722 63,757 52,463 68,433 Weighted-average shares used in computing basic net income per share 19,976,858 18,465,876 18,765,769 19,120,709 Basic net income per share $ 1.79 $ 3.45 $ 2.80 $ 3.58 Weighted-average shares used in computing diluted net income per share 24,933,987 22,324,112 24,170,172 25,767,864 Diluted net income per share $ 1.43 $ 2.86 $ 2.17 $ 2.66 |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 30, 2021 | |
Significant Accounting Policies | |
Nature of Business | RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” or the “Company”), is a leading luxury retailer in the home furnishings market that offers a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of January 30, 2021, we operated a total of 68 RH Galleries and 38 RH outlet stores in 31 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. |
Basis of Presentation | Basis of Presentation These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. |
Fiscal Years | Fiscal Years Our fiscal year ends on the Saturday closest to January 31. As a result, our fiscal year may include 53 weeks. The fiscal years ended January 30, 2021 (“fiscal 2020”), February 1, 2020 (“fiscal 2019”) and February 2, 2019 (“fiscal 2018”) each consisted of 52 weeks. |
Use of Accounting Estimates | Use of Accounting Estimates The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk We maintain our cash and cash equivalent accounts in financial institutions in both U.S. dollar and Canadian dollar denominations. Accounts at the U.S. institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 and accounts at the Canadian institutions are insured by the Canada Deposit Insurance Corporation (“CDIC”) up to $100,000 Canadian dollars. As of January 30, 2021 and February 1, 2020, and at various times throughout these fiscal years, we had cash in financial institutions in excess of the amount insured by the FDIC and CDIC. We perform ongoing evaluations of these institutions to limit our concentration of credit risk. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables from our credit card processors for sales transactions, receivables related to our contract business and other miscellaneous receivables. Accounts receivable is presented net of allowance for doubtful accounts, which is recorded on a specific identification basis. The allowance for doubtful accounts was $3.3 million and $2.2 million as of January 30, 2021 and February 1, 2020, respectively. |
Merchandise Inventories | Merchandise Inventories Our merchandise inventories consist primarily of finished goods and are carried at the lower of cost or net realizable value, with cost determined on a weighted-average cost method. To determine if the value of inventory should be marked down below original cost, we use estimates to determine the lower of cost or net realizable value, which considers current and anticipated demand, customer preference and the merchandise age. The inventory value is adjusted periodically to reflect current market conditions, which requires judgments that may significantly affect the ending inventory valuation, as well as gross margin. The estimates used in inventory valuation are lower of cost or net realizable value reserves and obsolescence (including excess and slow-moving inventory). In addition, we estimate and accrue for inventory shrinkage. Our inventory reserves contain uncertainties that require us to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. We adjust inventory reserves for net realizable value and obsolescence based on trends, aging reports, specific identification and estimates of future retail sales prices. Reserves for shrinkage are estimated and recorded throughout the year as a percentage of shipped sales for the direct channels, and as a percentage of cost of goods sold for the outlet business, based on historical shrinkage results, current inventory levels and results of statistical sampling, where applicable. Actual shrinkage is recorded throughout the year based upon periodic physical inventory counts. Actual inventory shrinkage and obsolescence can vary from estimates due to factors including the volume of inventory movement and execution against loss prevention initiatives in our distribution centers, home delivery center locations, off-site storage locations and with our third-party transportation providers. Our inventory reserve balances were $23.8 million and $25.6 million as of January 30, 2021 and February 1, 2020, respectively. |
Product Recalls | Product Recalls During fiscal 2020, fiscal 2019 and fiscal 2018, we initiated product recalls for certain of our products, as well as adjusted accruals related to certain product recalls previously initiated due to changes in estimates based on customer response and vendor and insurance recoveries. Product recalls had the following effect on our income before income taxes (in thousands) YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 (Increase) decrease to net revenues $ 1,373 $ (391) $ 4,733 Increase (decrease) to cost of goods sold 4,554 (3,372) (4,139) (Increase) decrease to gross profit 5,927 (3,763) 594 Increase (decrease) to selling, general and administrative expenses 1,443 (225) 1,025 (Increase) decrease to income before income taxes $ 7,370 $ (3,988) $ 1,619 The product recall accrual as of January 30, 2021 and February 1, 2020 was $8.2 million and $2.1 million, respectively, and is included in other current liabilities |
Advertising Expenses | Advertising Expenses Advertising expenses primarily represent the costs associated with our catalog mailings, as well as print and website marketing. Total advertising expense, which is recorded in selling, general and administrative expenses Capitalized Catalog Costs Capitalized catalog costs consist primarily of third-party incremental direct costs to prepare, print and distribute our Source Books. Such costs are capitalized and recognized as expense 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. We had $19.1 million and $13.7 million of capitalized catalog costs as of January 30, 2021 and February 1, 2020, respectively, which are included in prepaid expense and other current assets Website and Print Advertising Website and print advertising expenses, which include e-commerce advertising, web creative content and direct marketing activities such as print media, radio and other media advertising, are expensed as incurred or upon the release of the content or the initial advertisement. |
Property and Equipment | Property and Equipment Property and equipment is recorded at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method, generally using the following useful lives: CATEGORY OF PROPERTY AND EQUIPMENT USEFUL LIFE Building and building improvements 40 years Machinery, equipment and aircraft 3 to 10 years Furniture, fixtures and equipment 3 to 7 years Computer software 3 to 10 years The cost of leasehold improvements is amortized over the lesser of the useful life of the asset or the applicable lease term, which could include option periods reasonably certain to be exercised. We expense all internal-use software costs incurred in the preliminary project stage and capitalize certain direct costs associated with the development and purchase of internal-use software, including external costs of materials and services and internal payroll costs related to the software project, within property and equipment. Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally between three Interest is capitalized on construction in progress and software projects during the period in which expenditures have been made and activities are in progress to prepare the asset for its intended use. We capitalized interest of $5.6 million, $4.9 million and $3.1 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. During fiscal 2020, fiscal 2019 and fiscal 2018, $5.3 million, $3.7 million and $2.7 million, respectively, of the $5.6 million, $4.9 million and $3.1 million capitalized interest relates to the capitalization of non-cash interest associated with the amortization of the convertible senior notes debt discount. Land purchases are recorded at cost and are non-depreciable assets. Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. For further discussion regarding the impairment accounting policy refer to “Impairment—Long-Lived Assets” below. Asset Held for Sale Upon designation as an asset held for sale, the carrying value of the asset is recorded at the lower of its carrying value or its estimated fair value less estimated costs to sell, and we cease depreciating the asset. |
Lease Accounting | Lease Accounting We lease nearly all of our retail and outlet store locations, corporate headquarters, distribution centers and home delivery center locations, as well as other storage and office space. The initial lease terms of our real estate leases generally range from ten three We account for lease and non-lease components as a single lease component for real estate leases, and for all other asset classes we account for the components separately. We determine the lease classification and begin to recognize lease and any related financing expenses upon the lease’s commencement, which for real estate leases is generally upon store opening or, to a lesser extent, when we take possession or control of the asset. We sublease certain real estate locations to third parties under operating leases and recognize rental income received on a straight-line basis over the lease term, which is recorded as an offset to selling, general and administrative expenses Lease arrangements may require the landlord to provide tenant allowances directly to us. Standard tenant allowances received from landlords, typically those received under operating lease agreements, are recorded as cash and cash equivalents lease right-of-use assets lease liabilities right-of-use assets In the case of leases with associated construction, tenant allowances are provided for us to design and build the leased asset. Tenant allowances received from landlords during the construction phase of a leased asset and prior to lease commencement are recorded as cash and cash equivalents other non-current assets other current liabilities other non-current assets other current liabilities lease right-of-use assets Lease Classification Certain of our real estate and equipment leases are classified as finance leases. Lease characteristics that we evaluate to determine lease classification include, but are not limited to, the reasonably certain lease term, the economic life and fair value of the leased asset. Lease related assets under such classification are included in “finance lease right-of-use assets” within property and equipment—net Leases that do not meet the definition of a finance lease are considered operating leases. Lease related assets classified as operating leases are included in operating lease right-of-use assets Reasonably Certain Lease Term In recognizing the lease right-of-use assets and lease liabilities, we utilize the lease term for which we are reasonably certain to use the underlying asset, including consideration of options to extend or terminate the lease. At lease commencement, we evaluate whether it is reasonably certain to exercise available options based on consideration of a variety of economic factors and the circumstances related to the leased asset. Factors considered include, but are not limited to, (i) the contractual terms compared to estimated market rates, (ii) the uniqueness or importance of the asset or its location, (iii) the potential costs of obtaining an alternative asset, (iv) the potential costs of relocating or ceasing use of the asset, including the consideration of leasehold improvements and other invested capital, and (v) any potential tax consequences. The determination of the reasonably certain lease term affects the inclusion of rental payments utilized in the incremental borrowing rate calculations, the results of the lease classification test, and consideration of certain assets held for sale or planned for sale-leaseback. The reasonably certain lease term may materially impact our financial position related to certain Design Galleries or distribution center facilities which typically have greater lease payments. Although the above factors are considered in our analysis, the assessment involves subjectivity considering our strategy, expected future events and market conditions. While we believe our estimates and judgments in determining the lease term are reasonable, future events may occur which may require us to reassess this determination. Leases, or lease extensions, with a term of twelve months or less are not recorded on the consolidated balance sheets, and we recognize lease expense for these leases on a straight-line basis over the lease term. Lease Payments The majority of our real estate lease agreements include minimum rent payments which are subject to stated lease escalations over the lease term and eligible renewal periods. These stated fixed payments, through the reasonably certain lease term, are included in our measurement of the lease right-of-use assets and lease liabilities upon lease commencement. Certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels. Additionally, certain lease agreements include rental payments based solely on a percentage of retail sales. Due to the variable and unpredictable nature of such payments, we do not recognize a lease right-of-use asset and lease liability related to such payments. Estimated variable rental payments are included in accounts payable and accrued expenses cost of goods sold We have a small group of real estate leases that include rental payments periodically adjusted for inflation (e.g., based on the consumer price index). We include these variable payments in the initial measurement of the lease right-of-use asset and lease liability according to the index or rate at the commencement date and incorporates adjustments to rental payments in future periods if such increases have a minimum rent escalation (e.g., floor). Changes due to differences between the variable lease payments estimated at least commencement and actual amounts incurred are recognized in the consolidated statements of income in the period such costs are incurred. Lease concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or our obligations as the lessee are accounted for as if no change to the lease contract were made. Under this approach, we recognize a separate non-interest bearing payable for any deferred payments in the concession period, which is recorded in accounts payable and accrued expenses accounts payable and accrued expenses Incremental Borrowing Rate As our real estate leases and most of our equipment leases do not include an implicit interest rate, we determine the discount rate for each lease based upon the incremental borrowing rate (“IBR”) in order to calculate the present value of lease payments at the commencement date. The IBR is computed as the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the total lease payments in a similar economic environment. We utilize our asset based credit facility as the basis for determining the applicable IBR for each lease. We estimate the incremental borrowing rate for each lease primarily by reference to yield rates on debt issuances by companies of a similar credit rating, the weighted-average lease term and adjustments for differences between the yield rates and the actual term of the credit facility. In determining the yield rates, for Design Galleries we utilize market information on the lease commencement date and for leases other than new Design Galleries, we utilize market information as of the beginning of the quarter in which the lease commenced. Fair Value We determine the fair value of the underlying asset, considering lease components such as land and building, for purposes of determining the lease classification and allocating our contractual rental payments to the lease components. The fair value of the underlying asset and lease components also impact the evaluation and accounting for assets held for sale and sale-leaseback transactions. The fair value assessments may materially impact our financial position related to certain Design Galleries or distribution center facilities. The determination of fair value requires subjectivity and estimates, including the use of multiple valuation techniques and uncertain inputs, such as market price per square foot and assumed capitalization rates or the replacement cost of the assets, where applicable. Where real estate valuation expertise is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset and lease components. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. Construction Related Activities We are often involved in the construction of leased stores for our new Design Galleries. Upon construction commencement, we evaluate whether or not we, as lessee, control the asset being constructed and, depending on the extent to which we are involved, we may be the “deemed owner” of the leased asset for accounting purposes during the construction period under a build-to-suit arrangement. If we are the “deemed owner” for accounting purposes, upon commencement of the construction project we are required to capitalize (i) costs incurred by us and (ii) the cash and non-cash assets contributed by the landlord for construction as property and equipment on our consolidated balance sheets as build-to-suit assets, with an offsetting financing obligation under build-to-suit lease transactions. The contributions by the landlord toward construction, including the building, existing site improvements at construction commencement and any amounts paid by the landlord to those responsible for construction, are included as property and equipment additions due to build-to-suit lease transactions within the non-cash section of the consolidated statements of cash flows. Over the lease term, these non-cash additions to property and equipment do not impact our cash outflows, nor do they impact net income on the consolidated statements of income. Upon completion of the construction project where we are the deemed owner, we perform a sale-leaseback analysis to determine if we can derecognize the build-to-suit asset and corresponding financing obligation. If the asset and liability cannot be derecognized, we account for the agreement as a debt-like arrangement. If we are involved in a debt-like arrangement for a non-real estate asset under construction for which we plan to lease such asset upon construction completion and make deposits during the construction period, we recognize the related deposits as “Deposits on asset under construction” within other non-current assets Prepaid Expense and Other Assets other current liabilities Accounts Payable, Accrued Expenses and Other Current Liabilities If we are not the “deemed owner” for accounting purposes during the construction period, such lease is classified as either an operating or finance lease upon lease commencement. During the construction period and prior to lease commencement, any capital amounts contributed by us toward the construction of the leased asset (excluding normal leasehold improvements, which are recorded within property and equipment—net) other non-current assets Prepaid Expense and Other Assets lease right-of-use assets property and equipment—net Sale-Leaseback Activities We occasionally enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell the property to a third party and agrees to lease the property back for a certain period of time. To determine whether the transfer of the property should be accounted for as a sale, we evaluate whether it has transferred control to the third party in accordance with the guidance set forth in Topic 606. If the transfer of the asset is a sale at market terms, we recognize the transaction price for the sale based on the cash proceeds received, derecognize the carrying amount of the underlying asset and recognize a gain or loss in the consolidated statements of income for any difference between the carrying value of the asset and the transaction price. We then account for the leaseback in accordance with our lease accounting policy. If the transfer of the asset is determined not to be a sale, we account for the transaction as a financing arrangement. We continue to present the asset within property and equipment—net |
Intangible Assets | Intangible Assets Intangible assets reflect the value assigned to tradenames, trademarks, domain names and other intangible assets. The cost of purchasing transferable liquor licenses in jurisdictions with a limited number of authorized liquor licenses are capitalized as an intangible asset. We do not amortize our intangible assets as we define the life of these assets as indefinite. |
Impairment | Impairment Goodwill We evaluate goodwill annually to determine whether it is impaired or whenever events occur or circumstances change that would indicate that the fair value of a reporting unit is less than its carrying amount. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset; general economic conditions, such as increasing Treasury rates or unexpected changes in gross domestic product growth; a change in our market share; budget-to-actual performance and consistency of operating margins and capital expenditures; a product recall or an adverse action or assessment by a regulator; or changes in management or key personnel. We perform our annual goodwill impairment testing in the fourth fiscal quarter by comparing the fair value of a reporting unit with its carrying amount, limited to the total amount of goodwill of the reporting unit. We will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. We determine fair values using the discounted cash flow approach (“income approach”) or the market multiple valuation approach (“market approach”), when available and appropriate, or a combination of both. We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation. If multiple valuation methodologies are used, the results are weighted appropriately. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for each respective reporting unit. Actual results may differ from those assumed in our forecasts. We derive our discount rates using a capital asset pricing model and analyzing published rates for industries relevant to our reporting units to estimate the cost of equity financing. We use discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Valuations using the market approach are derived from metrics of publicly traded companies or historically completed transactions of comparable businesses. The selection of comparable businesses is based on the markets in which the reporting units operate giving consideration to risk profiles, size, geography, and diversity of products and services. A market approach is limited to reporting units for which there are publicly traded companies that have the characteristics similar to our businesses. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods. A reporting unit is an operating segment, or a business unit one level below that operating segment for which discrete financial information is prepared and regularly reviewed by the Chief Operating Decision Maker (“CODM”), which is our Chief Executive Officer. We have deemed RH Segment and Waterworks to be the reporting units for which goodwill is independently tested, as these operating segments are the lowest level for which discrete financial information is prepared and regularly reviewed by the CODM. RH Segment Reporting Unit During fiscal 2020, fiscal 2019 and fiscal 2018, we reviewed the RH Segment reporting unit goodwill for impairment by assessing qualitative factors to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying amount. Based on the qualitative tests performed in each fiscal year, we determined that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount for fiscal 2020, fiscal 2019 and fiscal 2018, and therefore we did not recognize goodwill impairment with respect to the RH Segment in any such fiscal year. Waterworks Reporting Unit During the fourth fiscal quarter of 2018, we conducted our annual strategic planning process. Based upon the outcome of this process, we identified indicators that there could be an impairment of the Waterworks reporting unit. These indicators included (i) an updated long-range financial plan provided by the Waterworks segment leadership team that indicated a reduction of revenues and EBITDA as compared to prior long-range financial plans, (ii) a review of the strategic initiatives of the Waterworks segment and (iii) the Waterworks segment not achieving revenue and operating income objectives compared to plans. In determining the Waterworks reporting unit estimated fair value using the income approach in fiscal 2018, we projected future cash flows based on our estimates and long-term plans and applied a discount rate based on a weighted-average cost of capital. This analysis required us to make judgments about revenues, expenses, fixed asset and working capital requirements, the impact of updated tax legislation and other subjective inputs. In determining the Waterworks reporting unit estimated fair value using the market approach, we considered assumptions that we believe market participants would use in valuing the Waterworks reporting unit, based on EBITDA multiples and including the application of a control premium. For purposes of this analysis, we weighted the results 80% towards the income approach and 20% towards the market approach. Based on the estimated fair value of the Waterworks reporting unit as of the assessment date in fiscal 2018, the Waterworks reporting unit goodwill was fully impaired in the fourth quarter of fiscal 2018. The impairment is recorded in goodwill and tradename impairment Tradenames, Trademarks and Other Intangible Assets We annually evaluate whether tradenames, trademarks and other intangible assets continue to have an indefinite life. Intangible assets are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. We qualitatively assess indefinite-lived intangible assets to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount. If tradenames, trademarks and other intangible assets are not qualitatively assessed or if such intangible assets are qualitatively assessed and it is determined it is not more likely than not that the asset’s fair value is greater than its carrying amount, an impairment review is performed by comparing the carrying value to the estimated fair value, determined using a discounted cash flow methodology, which requires judgments that may significantly affect the ending asset valuation. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, our plans for future operations, brand initiatives, recent results of operations and projected future cash flows. In the event we quantitatively assess a reporting unit’s indefinite-lived intangible asset for impairment, we perform an impairment test which utilizes the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. RH Segment Reporting Unit During fourth quarters of fiscal 2020, 2019 and 2018, we qualitatively assessed the indefinite-lived intangible assets of the RH Segment reporting unit for impairment and determined it was more likely than not that the fair value of the assets were greater than their carrying amounts. Based on the qualitative tests performed in each fiscal year, we did not perform quantitative impairment tests in any year. We did not recognize any impairment with respect to intangible assets for the RH Segment reporting unit in fiscal 2020, fiscal 2019 and fiscal 2018. Waterworks Reporting Unit During the fourth quarter of fiscal 2018, we updated the fiscal 2019 budget and financial projections beyond fiscal 2019 for the Waterworks reporting unit. There were certain factors that caused the key financial inputs for the tradename valuation model to significantly decrease from the previous inputs, the most significant of which was a reduction of future forecasted net revenues resulting from an expected shift in product mix, challenges in continuing to grow the showrooms business and supply chain constraints. These factors arising during the fourth quarter of fiscal 2018 had a significant and negative impact on the estimated future cash flows of the Waterworks reporting unit. In connection with the goodwill impairment test performed for the Waterworks reporting unit in fiscal 2018, described above, we performed an impairment test on the tradename allocated to the reporting unit which utilized the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, our significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. Based on the quantitative impairment test performed and the result of changes in forecasted revenues and the valuation assumption around future royalty rates, we concluded that the Waterworks reporting unit tradename was impaired as of February 2, 2019. As a result, we recognized a $14.6 million non-cash impairment with respect to the tradename for the Waterworks reporting unit in fiscal 2018, which was recorded in goodwill and tradename impairment During the fourth quarter of fiscal 2019, we performed our annual impairment procedures on the Waterworks tradename utilizing the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, our significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. Based on the quantitative impairment test performed, we did not recognize any impairment with respect to the Waterworks reporting unit tradename. During the first quarter of fiscal 2020, as a result of the COVID-19 health crisis and related showroom closures, we updated the long-term financial projections for the Waterworks reporting unit which resulted in a significant decrease in forecasted revenues and profitability. We performed an interim impairment test on the Waterworks tradename and the estimated future cash flows of the Waterworks reporting unit indicated the fair value of the tradename asset was below its carrying amount. We determined fair value utilizing a discounted cash flow methodology under the relief-from-royalty method. Significant assumptions under this method include forecasted net revenues and the estimated royalty rate, expressed as a percentage of revenues, in addition to the discount rate based on the weighted-average cost of capital. Based on the impairment test performed, we concluded that the Waterworks tradename was impaired as of May 2, 2020. As a result, we recognized a $20.5 million non-cash impairment charge for the Waterworks tradename in the first quarter of fiscal 2020. goodwill and tradename impairment During the fourth quarter of fiscal 2020, we performed our annual impairment procedures on the tradename allocated to the Waterworks reporting unit which utilized the discounted cash flow methodology under the relief-from-royalty method. Under the relief-from-royalty method, our significant assumptions include the forecasted future revenues and the estimated royalty rate, expressed as a percentage of revenues. Based on the quantitative impairment test performed, we did not recognize any further impairment with respect to the Waterworks reporting unit tradename. The carrying value of the Waterworks indefinite-lived tradename asset as of January 30, 2021 was $17.0 million. Long-Lived Assets Long-lived assets, such as property and equipment and lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, change in intended use of an asset, a product recall or an adverse action or assessment by a regulator. If the sum of the estimated undiscounted future cash flows over the remaining life of the primary asset is less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset or asset group. The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for the stores is the individual gallery level. Since there is typically no active market for our long-lived assets, we estimate fair values based on the expected future cash flows of the asset or asset group, using a discount rate commensurate with the related risk. The estimate of fair value requires judgments that may significantly affect the ending asset valuation. Future cash flows are estimated based on gallery-level historical results, current trends, and operating and cash flow projections. Our estimates are subject to uncertainty and may be affected by a number of factors outside of our control, including general economic conditions and the competitive environment. While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates. During the first quarter of fiscal 2020, as a result of the COVID-19 health crisis and related showroom closures, we performed an impairment review of long-lived assets at the individual gallery level. As a result of such analysis, we recognized long-lived asset impairment charges of $3.5 million related to one RH Baby & Child Gallery and one Waterworks showroom, comprising lease right-of-use asset impairment of $2.0 million and property and equipment impairment of $1.5 million. Except as noted above, we did not record impairment for long-lived tangible assets at the individual gallery level in fiscal 2020, fiscal 2019 and fiscal 2018. Due to certain distribution center closures and business line integrations in fiscal 2019 and fiscal 2018, we recorded impairment for certain corporate assets and other long-lived assets as discussed below under “Distribution Center and Home Delivery Location Center Closures” and “RH Contemporary Art Impairment.” No additional impairment has been recorded for corporate assets and other long-lived assets in fiscal 2019 and fiscal 2018. Distribution Center and Home Delivery Location Center Closures In fiscal 2019, we initiated and executed a plan to consolidate certain of our home delivery location centers. We recorded operating lease right-of-use asset impairment associated with this effort of $1.3 million in fiscal 2019. In fiscal 2020, we recorded additional operating lease right-of-use asset impairment associated with this effort of $0.9 million resulting from an update to both the timing and the amount of future estimated lease related cash inflows based on present market conditions, which is included in selling, general and administrative expenses During the third quarter of fiscal 2018, we initiated and executed a plan to close our distribution center located in Essex, MD. As a result of the distribution center closure, we incurred restructuring related costs in the RH Segment in fiscal 2018, including a lease impairment charge of $2.2 million and a loss on disposal of capitalized property and equipment of $0.2 million, as well as costs for employee termination benefits of $0.2 million. The impact to s elling, general and administrative expenses During the first quarter of fiscal 2018, we recognized a $0.8 million reversal of an estimated loss on disposal of assets due to negotiations of the sales price being finalized. We did not incur any charges in fiscal 2020 and fiscal 2019 and do not expect to incur additional charges in the future associated with this asset disposal. RH Contemporary Art Impairment In fiscal 2016, we initiated and executed a plan to integrate the RH Contemporary Art (“RHCA”) product line into the broader RH platform and no longer operates RHCA as a separate division. We recorded additional operating lease right-of-use asset impairment associated with RHCA of $4.6 million and $3.4 million during fiscal 2019 and fiscal 2018, respectively. These impairment charges, which are recorded in the RH Segment, resulted from an update to both the timing and the amount of future estimated lease related cash inflows based on present market conditions, which is included in selling, general and administrative expenses |
Equity Method Investments | Equity Method Investments Our consolidated financial statements present the results of operations and the financial position of RH and subsidiaries in which we have a controlling financial interest as if the consolidated group were a single economic entity. When we have a variable interest in another legal entity, we evaluate whether that legal entity is within the scope of the variable interest entity (“VIE”) model and, if so, whether we are the primary beneficiary of the VIE. We evaluate a legal entity for consolidation under the VIE model if no scope exceptions apply and, by design, the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack any of the characteristics of a controlling financial interest. We consolidate a VIE if our involvement indicates that we are the primary beneficiary. We would be the primary beneficiary of a VIE if we have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The determination of the power to direct the activities that most significantly impact economic performance requires judgement and is impacted by numerous factors including the purpose of the VIE, contractual rights and obligations of the variable interest holders, and mechanisms for the resolution of disputes among the variable interest holders. We account for investments under the equity method of accounting when we are not the primary beneficiary with a controlling financial interest but we have significant influence over the operations of the investee. In evaluating if we exert control or significant influence we consider factors such as the terms and structure of the investment agreement and the legal structure of the investee, including investor voting or other rights, and other agreements with the investee. During fiscal 2020, we were admitted as a non-managing member in three privately-held limited liability companies (each, an “Aspen LLC” and collectively, the “Aspen LLCs” or the “equity method investments”) that have the purpose of acquiring, developing, operating, and selling certain real estate projects in Aspen, Colorado. The Aspen LLCs are financed by capital contributions from the members on an as-needed basis, as well as via third-party debt secured by the underlying real estate projects. Each Aspen LLC is designed to require future additional subordinated financial support to finance its activities and thus is qualitatively determined to be a VIE due to insufficient equity investment at risk. The decisions of each Aspen LLC are made by a managing member not under common control with us, and we hold consent rights with respect to certain major decisions that represent some, but not all, of the most significant activities of each Aspen LLC. As we are not the managing member and do not have the ability to liquidate the Aspen LLCs or otherwise remove the managing member, we do not have the power to direct the most significant activities of each Aspen LLC and therefore are not the primary beneficiary. Each Aspen LLC maintains a specific ownership account for each member, similar to a partnership capital account structure. We account for our investments in the Aspen LLCs using the equity method of accounting because we do not have a controlling financial interest but have the ability to exercise significant influence over the Aspen LLCs. Our investments are presented as equity method investments equity method investments losses As of our initial investment date, we determine the fair value of the underlying assets and liabilities held by the Aspen LLCs for purposes of determining whether or not we have basis differences arising in connection with our investment. The determination of fair value of the underlying real estate assets requires subjectivity and estimates, including the use of various valuation techniques and Level 3 inputs, such as market price per square foot and assumed capitalization rates or the replacement cost of the assets, where applicable. If specialized expertise is required we obtain independent third-party appraisals to determine the fair value of the underlying assets and liabilities. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. The carrying amount of our investments in the Aspen LLCs differs from our underlying equity in the net assets of the Aspen LLCs, resulting in equity method basis differences upon our investment, related to the real estate assets. We account for these basis differences as if the Aspen LLCs were consolidated subsidiaries, thereby affecting the determination of the amount of our share of earnings or losses of the equity method investments. The operating agreements for each Aspen LLC specifies distributions from operations and upon liquidation that may be disproportionate to the members’ relative ownership percentages. Distributions are made to the members in proportion to, and in repayment of, various categories of capital contributions plus certain preferred returns, after which distributions are made to the members in proportion to their membership interests. To reflect the substance of these arrangements, we measure our proportionate share of the earnings or losses of each Aspen LLC using the hypothetical liquidation at book value (“HLBV”) method, which is a balance sheet oriented approach to determining our share of earnings or losses of the equity method investments that reflects changes in our claims to the net assets of each Aspen LLC. Due to the presence of basis differences and liquidation preferences, we use the recast financial statements approach in applying the HLBV method whereby we recast the financial statements of each Aspen LLC to reflect our perspective or basis (thus eliminating the basis differences) when determining our share of the Aspen LLCs earnings or losses. Our proportionate share of earnings or losses of the equity method investments follow the Aspen LLCs’ distribution priorities, which may change upon the achievement of certain investment return thresholds. Our equity method investment balance is subsequently adjusted for our share of the Aspen LLCs’ earnings and losses, cash contributions and distributions. We evaluate our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary. |
Deferred Financing Fees and Debt Issuance cost | Deferred Financing Fees and Debt Issuance Costs Deferred financing fees related to the asset based credit facility are included in other non-current assets interest expense—net |
Revenue Recognition | Revenue Recognition We recognize revenues and the related cost of goods sold when a customer obtains control of the merchandise, which is when the customer has the ability to direct the use of and obtain the benefits from the merchandise. Revenue recognized for merchandise delivered via the home-delivery channel is recognized upon delivery. Revenues recognized for merchandise delivered via all other delivery channels are recognized upon shipment. Revenues from “cash-and-carry” store sales are recognized at the point of sale in the store. Discounts or other accommodations provided to customers are accounted for as a reduction of sales. We recognize shipping and handling fees as activities to fulfill the promise to transfer the merchandise to customers. We apply this policy consistently across all of our distribution channels. In instances where revenue is recognized for the related merchandise upon delivery to customers, the related costs of shipping and handling activities are accrued for in the same period. 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 are accrued for in the same period. Costs of shipping and handling are included in cost of goods sold. Sales tax collected is not recognized as revenue but is included in accounts payable and accrued expenses Our customers may return purchased items for a refund. Projected merchandise returns, which are often resalable merchandise, are reserved on a gross basis based on historical return rates. The allowance for sales returns is presented within other current liabilities prepaid expense and other assets Merchandise exchanges of the same product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. A summary of the allowance for sales returns is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Balance at beginning of fiscal year $ 19,206 $ 19,821 $ 10,565 Impact of Topic 606 adoption — — 5,862 Provision for sales returns 133,226 107,811 112,218 Actual sales returns (126,873) (108,426) (108,824) Balance at end of fiscal year $ 25,559 $ 19,206 $ 19,821 We adopted Topic 606 in fiscal 2018 using the modified retrospective transition method and recorded a decrease to opening retained earnings of $21.0 million, inclusive of the tax impact, as shown on the consolidated statements of stockholders’ equity (deficit). |
Deferred Revenue and Customer Deposits | Deferred Revenue and Customer Deposits We defer revenue associated with merchandise delivered via the home-delivery channel, which is included as deferred revenue and customer deposits Customer deposits represent payments made by customers on custom orders. At the time of purchase we collect deposits for all custom orders equivalent to 50% of the purchase price. Custom order deposits are recognized as revenue when the customer obtains control of the merchandise. We expect that substantially all of the deferred revenue and customer deposits as of January 30, 2021 will be recognized within the next six months as the performance obligations are satisfied, and membership fees will be recognized over the membership period. |
Gift Cards | Gift Cards We sell gift cards to our customers in our stores and through our websites and product catalogs. Such gift cards and merchandise credits do not have expiration dates. We defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards. During fiscal 2020, fiscal 2019 and fiscal 2018, we recognized $16.2 million, $19.8 million and $21.6 million, respectively, of revenue related to previous deferrals related to our gift cards. Customer liabilities related to gift cards was $19.2 million and $16.6 million as of January 30, 2021 and February 1, 2020, respectively. We recognize breakage associated with gift cards proportional to actual gift card redemptions. Breakage of $1.8 million, $1.6 million and $1.5 million was recorded in net revenues We expect that approximately 75% of the remaining gift card liabilities will be recognized when the gift cards are redeemed by customers. |
Self Insurance | Self Insurance We maintain insurance coverage for significant exposures as well as those risks that, by law, must be insured. In the case of our health care coverage for employees, we have a managed self insurance program related to claims filed. Expenses related to this self insured program are computed on an actuarial basis, based on claims experience, regulatory requirements, an estimate of claims incurred but not yet reported (“IBNR”) and other relevant factors. The projections involved in this process are subject to uncertainty related to the timing and amount of claims filed, levels of IBNR, fluctuations in health care costs and changes to regulatory requirements. We had liabilities of $2.6 million and $2.2 million related to health care coverage as of January 30, 2021 and February 1, 2020, respectively. We carry workers’ compensation insurance subject to a deductible amount for which we are responsible on each claim. We had liabilities of $4.5 and $4.7 million related to workers’ compensation claims, primarily for claims that do not meet the per-incident deductible, as of January 30, 2021 and February 1, 2020, respectively. |
Stock-Based Compensation | Stock-Based Compensation We recognize the fair value of stock-based awards as compensation expense over the requisite service period and include the expense within selling, general and administrative expenses For service-only awards, compensation expense is recognized on a straight-line basis, net of forfeitures, over the requisite service period for the fair value of awards that actually vest. Fair value for restricted stock units is valued using the closing price of our stock on the date of grant. The fair value of each option award granted under our award plan is estimated on the date of grant using a Black-Scholes Merton option pricing model (“OPM”) which requires the input of assumptions regarding the expected term, expected volatility, dividend yield and risk-free interest rate. We elected to calculate the expected term of the option awards using the “simplified method.” This election was made based on the lack of sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Under the “simplified” calculation method, the expected term is calculated as an average of the vesting period and the contractual life of the options. For awards with performance-based criteria, compensation expense is recognized on an accelerated basis over the requisite service period. The fair value of each performance-based option award granted is estimated on the date of grant using a Monte Carlo simulation option pricing model that requires the input of subjective assumptions regarding the future exercise behavior, expected volatility and a discount for illiquidity. We determined these assumptions based on consideration of (i) future exercise behavior based on the historical observed exercise pattern of the award recipient, (ii) expected volatility based on our historical observed common stock prices measured over the full trading history of our common stock and implied volatility based on 180-day average trading prices of our common stock, and (iii) a discount for illiquidity estimated using the Finnerty method. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes, but is not limited to, the direct cost of purchased merchandise, inventory reserves and write-downs, inventory shrinkage, inbound freight, all freight costs to get merchandise to our retail and outlet locations, design and buying costs, occupancy costs related to retail operations and supply chain, such as rent, utilities, depreciation and amortization and all logistics costs associated with shipping product to customers, property tax and common area maintenance. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and payroll related expenses, retail related expenses other than occupancy, and the expense related to the operations at our corporate headquarters, including rent, utilities, depreciation and amortization, credit card fees and marketing expense, which primarily includes catalog production, mailing and print advertising costs. All retail pre-opening costs are included in selling, general and administrative expenses |
Net Income (Loss) Per Share | Net Income Per Share Basic net income per share is computed as net income divided by the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed as net income divided by the weighted-average number of common shares outstanding for the period, common share equivalents under equity plans using the treasury-stock method and the calculated common share equivalents in excess of the respective conversion rates related to each of the convertible senior notes. Potential dilutive securities are excluded from the computation of diluted net income per share if their effect is anti-dilutive. |
Treasury Stock | Treasury Stock We record our purchases of treasury stock at cost as a separate component of stockholders’ equity (deficit) in the consolidated financial statements. Upon retirement of treasury stock, we allocate the excess of the purchase price over par value to additional paid-in capital subject to certain limitations with any remaining purchase price allocated to retained earnings (accumulated deficit). |
Income Taxes | Income Taxes We account for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. In estimating future tax consequences, we generally take into account all expected future events then known to it, other than changes in the tax law or rates which have not yet been enacted and which are not permitted to be considered. Accordingly, we may record a valuation allowance to reduce our net deferred tax assets to the amount that is more-likely-than-not to be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based upon our best estimate of the recoverability of our net deferred tax assets. Future taxable income and ongoing prudent and feasible tax planning are considered in determining the amount of the valuation allowance, and the amount of the allowance is subject to adjustment in the future. Specifically, in the event we were to determine that it is not more-likely-than-not able to realize our net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination is made. This allowance does not alter our ability to utilize the underlying tax net operating loss and credit carryforwards in the future, the utilization of which is limited to achieving future taxable income. The accounting standard for uncertainty in income taxes prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Differences between tax positions taken in a tax return and amounts recognized in the financial statements generally result in an increase in liability for income taxes payable or a reduction of an income tax refund receivable, or a reduction in a deferred tax asset or an increase in a deferred tax liability, or both. We recognize interest and penalties related to unrecognized tax benefits in income tax expense |
Comprehensive Income | Comprehensive Income Comprehensive income is comprised of net income and other gains and losses affecting equity that are excluded from net income. Other comprehensive income consist of net gains (losses) on foreign currency translation, which includes intercompany gains and losses, and is presented net of tax. |
Foreign Currency Translation | Foreign Currency Translation Local currencies are generally considered the functional currency for entities outside the United States. Assets and liabilities denominated in non-U.S. currencies are translated at the rate of exchange prevailing on the date of the consolidated balance sheets, and revenues and expenses are translated at average rates of exchange for the period. The related translation gains (losses) are reflected in the accumulated other comprehensive income accumulated other comprehensive income selling, general and administrative expenses |
Recently Issued Accounting Standards | Recently Issued Accounting Standards New Accounting Standards or Updates Adopted Cloud Computing In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract Accounting Standards Update 2015-05—Customers Accounting for Fees in a Cloud Computing Agreement. We adopted the ASU as of February 2, 2020 using a prospective method. We capitalize implementation costs related to hosted arrangements, which typically include specified service terms with additional renewal periods. The related assets are recorded within other non-current assets cost of goods sold selling, general and administrative expenses —Prepaid Expense and Other Assets Current Expected Credit Losses In June 2016, the FASB issued ASU 2016-13—Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments Accounts receivable consist primarily of receivables from our credit card processors for sales transactions, receivables related to our contract business and other miscellaneous receivables. Accounts receivable is presented net of allowance for doubtful accounts as a result of the assessment of the collectability of customer accounts, which is recorded by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The allowance for doubtful accounts was $3.3 million and $2.2 million as of January 30, 2021 and February 1, 2020, respectively. We adopted the ASUs as of February 2, 2020 using a modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings. We did not recognize a cumulative-effect adjustment upon adoption as the ASUs did not have a material effect on our consolidated financial statements. New Accounting Standards or Updates Not Yet Adopted Income Taxes In December 2019, the FASB issued ASU 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Commitments and Contingencies | We review the need for any loss contingency reserves and establishes reserves when, in the opinion of our senior leadership team, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that we do establish a reserve, there can be no assurance that any such recorded liability for estimated losses will be for the appropriate amount, and actual losses could be higher or lower than what we accrue from time to time. Although we believe that the ultimate resolution of our current legal proceedings will not have a material adverse effect on our consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Significant Accounting Policies | |
Schedule of Product Recall Adjustments Effect on Income Before Taxes | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 (Increase) decrease to net revenues $ 1,373 $ (391) $ 4,733 Increase (decrease) to cost of goods sold 4,554 (3,372) (4,139) (Increase) decrease to gross profit 5,927 (3,763) 594 Increase (decrease) to selling, general and administrative expenses 1,443 (225) 1,025 (Increase) decrease to income before income taxes $ 7,370 $ (3,988) $ 1,619 |
Schedule of Property and Equipment Useful Lives | CATEGORY OF PROPERTY AND EQUIPMENT USEFUL LIFE Building and building improvements 40 years Machinery, equipment and aircraft 3 to 10 years Furniture, fixtures and equipment 3 to 7 years Computer software 3 to 10 years |
Summary of Allowance for Sales Returns | A summary of the allowance for sales returns is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Balance at beginning of fiscal year $ 19,206 $ 19,821 $ 10,565 Impact of Topic 606 adoption — — 5,862 Provision for sales returns 133,226 107,811 112,218 Actual sales returns (126,873) (108,426) (108,824) Balance at end of fiscal year $ 25,559 $ 19,206 $ 19,821 |
Prepaid Expense and Other Ass_2
Prepaid Expense and Other Assets (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Prepaid expense and other current assets $ 42,079 $ 30,875 Capitalized catalog costs 19,067 13,740 Promissory note receivable, including interest (1) 13,569 — Vendor deposits 12,519 11,258 Right of return asset for merchandise 7,453 5,746 Acquisition related escrow deposits 2,650 — Total prepaid expense and other current assets $ 97,337 $ 61,619 |
Schedule of Other Non-Current Assets | Other non-current assets consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Landlord assets under construction—net of tenant allowances $ 135,531 $ 122,679 Initial direct costs prior to lease commencement 36,770 15,636 Capitalized cloud computing costs—net (1) 7,254 — Other deposits 5,287 5,157 Acquisition related escrow deposits 3,975 — Deferred financing fees 1,525 2,602 Deposits on asset under construction — 60,000 Promissory note receivable, including interest — 5,354 Other non-current assets 9,835 3,417 Total other non-current assets $ 200,177 $ 214,845 (1) Presented net of accumulated amortization of $0.5 million as of January 30, 2021 . |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Property and Equipment | |
Schedule of Property and Equipment | Property and equipment consists of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Finance lease right-of-use assets (1) $ 844,832 $ 734,425 Leasehold improvements (2) 340,546 318,313 Computer software 143,571 138,328 Furniture, fixtures and equipment 92,736 79,575 Machinery, equipment and aircraft 67,080 66,228 Building and building improvements (3) 43,193 33,370 Built-to-suit property 24,881 2,882 Land 9,059 6,061 Total property and equipment 1,565,898 1,379,182 Less—accumulated depreciation and amortization (4) (488,700) (411,583) Total property and equipment—net $ 1,077,198 $ 967,599 (1) Refer to “Lease Accounting” within Note 3— Significant Accounting Policies and Note 11— Leases . (2) Leasehold improvements include construction in progress of $31.7 million and $16.0 million as of January 30, 2021 and February 1, 2020, respectively. (3) Building and building improvements as of January 30, 2021 includes $40.2 million of owned buildings under construction related to future Design Galleries. (4) Includes accumulated amortization related to finance lease right-of-use assets of $133.0 million and $92.3 million as of January 30, 2021 and February 1, 2020, respectively. Refer to Note 11— Leases. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Business Combinations | |
Schedule of purchase price allocation | The following table summarizes the purchase price allocation based on the fair value of the assets acquired and liabilities assumed ( in thousands Goodwill $ 16,689 Tradename 4,800 Tangible assets acquired and liabilities assumed—net (1,839) Total $ 19,650 |
Goodwill, Tradenames, Tradema_2
Goodwill, Tradenames, Trademarks and Other Intangible Assets (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | The following sets forth the fiscal 2020 goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks ( in thousands FOREIGN FEBRUARY 1, CURRENCY JANUARY 30, 2020 ACQUISITION IMPAIRMENT TRANSLATION 2021 RH Segment Goodwill $ 124,367 $ 16,689 $ — $ 44 $ 141,100 Tradenames, trademarks and other intangible assets 48,563 6,100 — — 54,663 Waterworks Tradename (1) 37,459 — (20,459) — 17,000 (1) Presented net of an impairment charge of $35.1 million, with $20.5 million recorded in the first quarter of fiscal 2020 and $14.6 million recorded in fiscal 2018 . The following sets forth the fiscal 2019 goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks ( in thousands FOREIGN FEBRUARY 2, CURRENCY FEBRUARY 1, 2019 TRANSLATION 2020 RH Segment Goodwill $ 124,379 $ (12) $ 124,367 Tradenames, trademarks and other intangible assets 48,563 — 48,563 Waterworks (1) Tradename (2) 37,459 — 37,459 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $14.6 million recorded in fiscal 2018 . |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Accounts payable $ 224,906 $ 180,714 Accrued compensation 84,860 64,659 Accrued freight and duty 29,754 25,170 Accrued sales taxes 23,706 19,618 Accrued occupancy 17,671 12,067 Deferred consideration for asset purchase 14,387 — Accrued professional fees 5,383 4,381 Accrued catalog costs 4,354 8,267 Other accrued expenses 19,401 15,433 Total accounts payable and accrued expenses $ 424,422 $ 330,309 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Federal and state taxes payable $ 49,539 $ 13,591 Allowance for sales returns 25,559 19,206 Current portion of equipment promissory notes 22,747 22,009 Unredeemed gift card and merchandise credit liability 19,173 16,625 Finance lease liabilities 14,671 9,188 Product recall reserve 8,181 2,055 Promissory notes on asset under construction — 53,000 Other current liabilities 5,175 5,040 Total other current liabilities $ 145,045 $ 140,714 |
Other Non-Current Obligations (
Other Non-Current Obligations (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Other Non-Current Obligations. | |
Schedule of Other Non-Current Obligations | Other non-current obligations consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Deferred payroll taxes $ 4,461 $ — Rollover units and profit interests (1) 3,490 3,064 Unrecognized tax benefits 3,114 3,020 Notes payable for share repurchases 553 18,741 Other non-current obligations 5,363 3,695 Total other non-current obligations $ 16,981 $ 28,520 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 18 — Stock-Based Compensation . |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Leases | |
Summary of Lease Costs-Net | Lease costs—net consist of the following ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Operating lease cost (1) $ 84,852 $ 86,448 $ 87,742 Finance lease costs Amortization of leased assets (1) 41,292 36,991 28,848 Interest on lease liabilities (2) 24,011 22,608 16,785 Variable lease costs (3) 20,485 23,471 21,889 Sublease income (4) (7,723) (9,609) (7,794) Total lease costs—net $ 162,917 $ 159,909 $ 147,470 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or s elling, general and administrative expenses on the consolidated statements of income based on our accounting policy. Refer to Note 3— Significant Accounting Policies . (2) Included in interest expense—net on the consolidated statements of income. (3) Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $13.4 million, $14.6 million and $13.0 million, respectively, and charges associated with common area maintenance of $7.1 million, $8.9 million and $8.9 million in fiscal 2020, fiscal 2019 and fiscal 2018, respectively. Other variable costs include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset were not material in fiscal 2020, fiscal 2019 and fiscal 2018. (4) Included as an offset to selling, general and administrative expenses on the consolidated statements of income. |
Summary of Lease Right-of-use Assets and Lease Liabilities | Lease right-of-use assets and lease liabilities consist of the following ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 456,164 $ 410,904 Finance leases (1)(2) Property and equipment—net 711,804 642,117 Total lease right-of-use assets $ 1,167,968 $ 1,053,021 Liabilities Current (3) Operating leases Operating lease liabilities $ 71,524 $ 58,924 Finance leases Other current liabilities 14,671 9,188 Total lease liabilities—current 86,195 68,112 Non-current Operating leases Non-current operating lease liabilities 448,169 409,930 Finance leases Non-current finance lease liabilities 485,481 442,988 Total lease liabilities—non-current 933,650 852,918 Total lease liabilities $ 1,019,845 $ 921,030 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $133.0 million and $92.3 million as of January 30, 2021 and February 1, 2020, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. |
Summary of Maturities of Lease Liabilities | The maturities of lease liabilities are as follows as of January 30, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL 2021 $ 90,361 $ 38,786 $ 129,147 2022 79,294 39,203 118,497 2023 71,580 39,613 111,193 2024 65,332 39,984 105,316 2025 64,984 41,173 106,157 Thereafter 251,637 594,460 846,097 Total lease payments (1)(2) 623,188 793,219 1,416,407 Less—imputed interest (3) (103,495) (293,067) (396,562) Present value of lease liabilities $ 519,693 $ 500,152 $ 1,019,845 (1) Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $793.5 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of January 30, 2021, of which $28.3 million, $38.9 million, $43.9 million, $45.6 million and $47.1 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024 and fiscal 2025, respectively, and $589.7 million will be paid subsequent to fiscal 2025. (2) Excludes future commitments under short-term lease agreements of $0.7 million as of January 30, 2021. (3) Calculated using the discount rate for each lease at lease commencement. |
Summary of Supplemental Information Related to Leases | Supplemental information related to leases consists of the following: JANUARY 30, FEBRUARY 1, 2021 2020 Weighted-average remaining lease term (years) Operating leases 8.7 8.9 Finance leases 18.4 18.6 Weighted-average discount rate Operating leases 3.97% 3.82% Finance leases 5.04% 5.25% |
Summary of Other Information Related to Leases | Other information related to leases consists of the following ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (75,794) $ (95,329) $ (91,965) Operating cash flows from finance leases (20,839) (25,260) (16,785) Financing cash flows from finance leases (12,498) (9,682) (6,885) Total cash outflows from leases $ (109,131) $ (130,271) $ (115,635) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 113,828 $ 34,063 $ 174,977 Finance leases 57,873 42,122 33,790 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Convertible senior notes due 2024 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying value of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, is as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (65,818) (81,634) Net carrying amount $ 284,182 $ 268,366 Equity component (1) $ 87,252 $ 87,252 (1) Included in additional paid-in capital on the consolidated balance sheets. |
Convertible senior notes due 2023 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | In December 2020, $2.4 million in aggregate principal amount of the 2023 Notes were converted at the option of the noteholders. During the first quarter of fiscal 2021 and through the date of this filing, we paid $2.4 million in cash and delivered 7,307 shares of common stock to settle the converted 2023 Notes. As a result, we recognized a loss on extinguishment of the liability component of $0.1 million in the first quarter of fiscal 2021. We also received 7,305 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below, and therefore, on a net basis issued 2 shares of our common stock in respect to such settlement of the converted 2023 Notes. The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Liability component Principal $ 335,000 $ 335,000 Less: Debt discount (47,064) (64,729) Net carrying amount $ 287,936 $ 270,271 Equity component (1) $ 90,990 $ 90,990 (1) Included in additional paid-in capital on the consolidated balance sheets. |
Convertible senior notes due 2020 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | As of January 30, 2021, the 2020 Notes are no longer outstanding. As of February 1, 2020, the carrying values of the 2020 Notes, excluding the discounts upon original issuance and third party offering costs, were as follows ( in thousands FEBRUARY 1, 2020 Liability component Principal $ 300,000 Less: Debt discount (8,890) Net carrying amount $ 291,110 Equity component (1) $ 84,003 (1) Included in additional paid-in capital on the consolidated balance sheets. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Debt Disclosure | |
Schedule of Outstanding Balances Under our Credit Facilities | The outstanding balances under our credit facilities were as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 37,532 (171) 37,361 53,372 (310) 53,062 Total credit facilities $ 37,532 $ (171) $ 37,361 $ 53,372 $ (310) $ 53,062 (1) Deferred financing fees associated with the asset based credit facility as of January 30, 2021 and February 1, 2020 were $1.5 million and $2.6 million, respectively, and are included in other non-current assets on the consolidated balance sheets. The deferred financing fees are amortized on a straight line basis over the life of the revolving line of credit, which has a maturity date of June 28, 2022. (2) Represents total equipment security notes secured by certain of our property and equipment, of which $22.7 million outstanding was included in other current liabilities on the consolidated balance sheets. The remaining $14.8 million outstanding, included in o ther non-current obligations on the consolidated balance sheets, has principal payments due of $13.6 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Fair Value Measurements | |
Estimated Fair Value and Carrying Value of Notes | JANUARY 30, FEBRUARY 1, 2021 2020 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2020 (2) $ — $ — $ 295,573 $ 291,110 Convertible senior notes due 2023 301,794 287,936 272,623 270,271 Convertible senior notes due 2024 286,161 284,182 255,849 268,366 (1) Carrying value represents the principal amount less the equity component of the 2020 Notes, 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. (2) The 2020 Notes matured on July 15, 2020. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Income Taxes | |
Summary of Income Before Income Taxes | The following is a summary of our income before income taxes, inclusive of our share of equity method investments losses ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Domestic $ 378,267 $ 267,538 $ 157,827 Foreign (1,854) 1,644 3,137 Total $ 376,413 $ 269,182 $ 160,964 |
Summary of Income Tax Expense (Benefit) | The following is a summary of our income tax expense ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Current Federal $ 85,708 $ 45,985 $ 24,012 State 23,684 10,806 6,275 Foreign 126 403 1,270 Total current tax expense 109,518 57,194 31,557 Deferred Federal (2,251) (7,173) (4,428) State (2,536) (1,477) (2,049) Foreign (133) 263 153 Total deferred tax benefit (4,920) (8,387) (6,324) Total income tax expense $ 104,598 $ 48,807 $ 25,233 |
Schedule of Reconciliation of Federal Statutory Tax Rate to Company's Effective Tax Rate | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Provision at federal statutory tax rate 21.0 % 21.0 % 21.0 % Non-deductible stock-based compensation 6.5 — — State income taxes—net of federal tax impact 4.2 2.5 1.7 Tax rate adjustments and other 0.3 0.2 0.1 Stock compensation—excess benefits (4.9) (6.6) (9.9) Goodwill impairment — — 1.8 Valuation allowance 0.1 — 0.3 Other permanent items 0.6 1.0 0.7 Effective tax rate 27.8 % 18.1 % 15.7 % |
Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows ( in thousands JANUARY 30, FEBRUARY 1, 2021 2020 Non-current deferred tax assets (liabilities) Lease liabilities $ 275,517 $ 249,243 Stock-based compensation 24,922 22,400 Accrued expenses 21,308 21,362 Merchandise inventories 9,097 8,028 Deferred lease credits 4,917 6,395 Net operating loss carryforwards 1,988 1,763 Convertible senior notes 914 717 Deferred revenue 635 2,235 Other 2,269 1,846 Non-current deferred tax assets—net 341,567 313,989 Valuation allowance (2,049) (1,007) Non-current deferred tax assets $ 339,518 $ 312,982 Property and equipment $ (147,143) $ (137,448) Lease right-of-use assets (122,306) (110,075) Tradename, trademarks and intangibles (10,349) (13,026) Prepaid expense and other (8,010) (4,882) State benefit (1,786) (2,546) Non-current deferred tax liabilities (289,594) (267,977) Total net non-current deferred tax assets $ 49,924 $ 45,005 |
Schedule of Reconciliation of Valuation Allowance | A reconciliation of our valuation allowance against deferred tax assets in certain state and foreign jurisdictions due to historical losses is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, 2021 2020 Balance at beginning of fiscal year $ 1,007 $ 1,623 Net changes in deferred tax assets and liabilities 1,042 (616) Balance at end of fiscal year $ 2,049 $ 1,007 |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the exposures related to unrecognized tax benefits is as follows ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Balance at beginning of fiscal year $ 8,514 $ 8,459 $ 8,152 Gross increases (decreases)—prior period tax positions (129) (2) 239 Gross increases—current period tax positions 690 438 375 Reductions based on the lapse of the applicable statutes of limitations (619) (381) (307) Balance at end of fiscal year $ 8,456 $ 8,514 $ 8,459 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Net Income Per Share | |
Schedule of Weighted Average Shares Used for Net Income per Share | The weighted-average shares used for net income per share are as follows: YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average shares—basic 19,668,976 19,082,303 21,613,678 Effect of dilutive stock-based awards 5,470,980 4,554,682 4,567,303 Effect of dilutive convertible senior notes (1) 2,162,312 662,049 352,244 Weighted-average shares—diluted 27,302,268 24,299,034 26,533,225 (1) The 2019 Notes, 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices of $116.09 per share, $118.13 per share, $193.65 per share and $ 211.40 per share, respectively. The 2019 Notes matured on June 15, 2019 and did not have an impact of our dilutive share count post-maturity. The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2019 Notes, 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices of $171.98 per share, $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2019 Notes and 2020 Notes expired through December 2019 and January 2021, respectively. |
Anti-Dilutive Securities Excluded from Diluted Net Income per Share | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Options 389,830 360,496 351,145 Restricted stock units 316 — 2,625 Total anti-dilutive stock-based awards 390,146 360,496 353,770 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Stock-Based Compensation. | |
Summary of Stock Option Activity | WEIGHTED-AVERAGE OPTIONS EXERCISE PRICE Outstanding—February 1, 2020 7,134,735 $ 58.34 Granted 1,769,200 273.61 Exercised (292,949) 49.08 Cancelled (133,480) 130.36 Outstanding—January 30, 2021 8,477,506 $ 102.44 |
Schedule of Assumptions Used to Estimate Fair Value of Stock Options Issued | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Expected volatility 58.9 % 55.7 % 54.7 % Expected life (years) 8.3 7.1 6.7 Risk-free interest rate 0.6 % 2.3 % 2.9 % Dividend yield — — — |
Summary of Additional Information about Stock Options | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average fair value per share of stock options granted $ 168.90 $ 63.35 $ 69.60 Aggregate intrinsic value of stock options exercised (in thousands) 75,011 82,718 77,311 Fair value of stock options vested (in thousands) 12,429 11,816 13,915 |
Schedule of Stock Options Outstanding, Vested or Expected to Vest, and Exercisable | Information about stock options outstanding, vested or expected to vest, and exercisable as of January 30, 2021 is as follows: OPTIONS OUTSTANDING OPTIONS EXERCISABLE WEIGHTED- AVERAGE WEIGHTED- WEIGHTED- REMAINING AVERAGE AVERAGE NUMBER OF CONTRACTUAL EXERCISE NUMBER OF EXERCISE RANGE OF EXERCISE PRICES OPTIONS LIFE (IN YEARS) PRICE OPTIONS PRICE $25.39 — 751,494 4.99 $ 36.12 480,864 $ 35.84 $46.50 — 2,876,826 1.75 46.50 2,876,826 46.50 $50.00 — $75.43 2,283,990 4.23 62.51 2,271,830 62.54 $79.32 — $154.82 1,479,721 8.11 127.00 234,466 97.03 $156.40 — $442.26 1,073,475 9.62 345.49 702,975 384.43 $500.99 — $500.99 12,000 9.97 500.99 — — Total 8,477,506 $ 102.49 6,566,961 $ 89.25 Vested or expected to vest 7,977,838 $ 98.59 |
Summary of Restricted Stock Award Activity | WEIGHTED- AVERAGE GRANT DATE FAIR INTRINSIC AWARDS VALUE VALUE Outstanding—February 1, 2020 219,985 $ 49.00 Granted 6,642 371.36 Released (113,797) 58.96 Cancelled (20,580) 43.92 Outstanding—January 30, 2021 92,250 $ 61.04 $ 43,851,960 |
Summary of Additional Information about Restricted Stock Awards | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Weighted-average fair value per share of awards granted $ 371.36 $ 129.21 $ 111.38 Grant date fair value of awards released (in thousands) 6,710 10,522 11,477 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Segment Reporting | |
Summary of Statements of Income Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting | The following table presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting (in thousands) YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 2,729,422 $ 119,204 $ 2,848,626 $ 2,514,296 $ 133,141 $ 2,647,437 $ 2,375,472 $ 130,181 $ 2,505,653 Gross profit 1,274,148 51,383 1,325,531 1,038,722 56,289 1,095,011 933,805 51,772 985,577 Depreciation and amortization 95,071 4,969 100,040 96,148 4,591 100,739 86,719 4,653 91,372 |
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) JANUARY 30, FEBRUARY 1, 2021 2020 REAL ESTATE RH SEGMENT WATERWORKS INVESTMENTS TOTAL RH SEGMENT WATERWORKS TOTAL Goodwill (1) $ 141,100 $ — $ — $ 141,100 $ 124,367 $ — $ 124,367 Tradenames, trademarks and other intangible assets (2) 54,663 17,000 — 71,663 48,563 37,459 86,022 Equity method investments — — 100,603 100,603 — — — Total assets 2,659,944 137,766 100,603 2,898,313 2,301,823 143,871 2,445,694 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of February 2, 2019, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) The Waterworks reporting unit tradename is presented net of an impairment charge of $35.1 million, of which $20.5 million was recorded in the first quarter of fiscal 2020 and $14.6 million was recorded in fiscal 2018. |
Schedule of Segment Operating Income and Income Before Income Taxes | The following table presents, for our retail operating segments, the segment operating income (loss) and income before income taxes ( in thousands YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Operating income (loss): RH Segment $ 616,523 $ 375,315 $ 288,106 Waterworks 4,019 3,780 (922) Non-cash compensation (117,084) — — Asset impairments and change in useful lives (12,851) (21,899) (7,218) Gain (loss) on sale leaseback transaction (9,352) 1,196 (8,497) Recall accrual (7,370) 3,988 (1,619) Reorganization related costs (7,027) (1,075) (9,977) Legal settlements — 1,193 5,289 Asset held for sale gain — 333 — Distribution center closures — — (3,046) Impact of inventory step-up — — (380) Income from operations 466,858 362,831 261,736 Interest expense—net 69,250 87,177 67,769 Goodwill and tradename impairment 20,459 — 32,086 (Gain) loss on extinguishment of debt—net (152) 6,472 917 Income before income taxes $ 377,301 $ 269,182 $ 160,964 |
Net Revenues | YEAR ENDED JANUARY 30, FEBRUARY 1, FEBRUARY 2, 2021 2020 2019 Furniture $ 1,940,658 $ 1,762,034 $ 1,635,631 Non-furniture 907,968 885,403 870,022 Total net revenues $ 2,848,626 $ 2,647,437 $ 2,505,653 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Jan. 30, 2021 | |
Selected Quarterly Financial Data (Unaudited) | |
Schedule of Quarterly Financial Data (Unaudited) | Quarterly financial data for fiscal 2020 and fiscal 2019 are set forth below ( in thousands, except share and per share amounts THREE MONTHS ENDED MAY 2, AUGUST 1, OCTOBER 31, JANUARY 30, FISCAL 2020 2020 2020 2020 2021 Net revenues $ 482,895 $ 709,282 $ 844,013 $ 812,436 Gross profit 199,654 332,419 408,330 385,128 Net income (loss) (3,212) 98,423 46,411 130,193 Weighted-average shares used in computing basic net income (loss) per share 19,242,641 19,386,115 19,552,836 20,518,130 Basic net income (loss) per share $ (0.17) $ 5.08 $ 2.37 $ 6.35 Weighted-average shares used in computing diluted net income (loss) per share 19,242,641 26,564,705 28,286,124 30,179,506 Diluted net income (loss) per share $ (0.17) $ 3.71 $ 1.64 $ 4.31 THREE MONTHS ENDED MAY 4, AUGUST 3, NOVEMBER 2, FEBRUARY 1, FISCAL 2019 2019 2019 2019 2020 Net revenues $ 598,421 $ 706,514 $ 677,526 $ 664,976 Gross profit 232,814 294,958 284,166 283,073 Net income 35,722 63,757 52,463 68,433 Weighted-average shares used in computing basic net income per share 19,976,858 18,465,876 18,765,769 19,120,709 Basic net income per share $ 1.79 $ 3.45 $ 2.80 $ 3.58 Weighted-average shares used in computing diluted net income per share 24,933,987 22,324,112 24,170,172 25,767,864 Diluted net income per share $ 1.43 $ 2.86 $ 2.17 $ 2.66 |
Nature of Business (Detail)
Nature of Business (Detail) | Jan. 30, 2021storestateitem |
Nature of Business | |
Number of RH Galleries | 68 |
Number of RH outlet stores | store | 38 |
Number of states that galleries and stores operate, District of Columbia and Canada | state | 31 |
Number of waterworks showrooms throughout the United States and in the U.K. | 14 |
Organization - Recent Developme
Organization - Recent Developments - COVID-19 (Detail) - Forecast | Mar. 24, 2021restaurant |
Restaurants reopened, COVID-19 | 9 |
Number of restaurants | 10 |
Significant Accounting Polici_4
Significant Accounting Policies - Accounts Receivable (Detail) - USD ($) $ in Millions | Jan. 30, 2021 | Feb. 01, 2020 |
Significant Accounting Policies | ||
Allowance for doubtful accounts | $ 3.3 | $ 2.2 |
Significant Accounting Polici_5
Significant Accounting Policies - Merchandise Inventories (Detail) - USD ($) $ in Millions | Jan. 30, 2021 | Feb. 01, 2020 |
Significant Accounting Policies | ||
Inventory reserve balances | $ 23.8 | $ 25.6 |
Significant Accounting Polici_6
Significant Accounting Policies - Product Recalls (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Product recalls, effect on the Company's income before income taxes | |||
(Increase) decrease to income before income taxes | $ 7,370 | $ (3,988) | $ 1,619 |
Other current liabilities | |||
Product recalls, effect on the Company's income before income taxes | |||
Product recall accrual | 8,200 | 2,100 | |
Net revenues | |||
Product recalls, effect on the Company's income before income taxes | |||
(Increase) decrease to income before income taxes | 1,373 | (391) | 4,733 |
Cost of goods sold. | |||
Product recalls, effect on the Company's income before income taxes | |||
(Increase) decrease to income before income taxes | 4,554 | (3,372) | (4,139) |
Gross profit | |||
Product recalls, effect on the Company's income before income taxes | |||
(Increase) decrease to income before income taxes | 5,927 | (3,763) | 594 |
Selling, general and administrative expenses | |||
Product recalls, effect on the Company's income before income taxes | |||
(Increase) decrease to income before income taxes | $ 1,443 | $ (225) | $ 1,025 |
Significant Accounting Polici_7
Significant Accounting Policies - Advertising Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Significant Accounting Policies | |||
Advertising expense | $ 58,800 | $ 107,600 | $ 97,000 |
Capitalized catalog costs and other current assets | $ 19,067 | $ 13,740 |
Significant Accounting Polici_8
Significant Accounting Policies - Property and Equipment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Capitalized interest | |||
Capitalized Interest | $ 5.6 | $ 4.9 | $ 3.1 |
Capitalized interest related to amortization of Convertible Notes debt discount | $ 5.3 | $ 3.7 | $ 2.7 |
Building and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 40 years | ||
Minimum | Machinery, equipment and aircraft | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Minimum | Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Maximum | Machinery, equipment and aircraft | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 10 years | ||
Maximum | Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 7 years | ||
Maximum | Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 10 years |
Significant Accounting Polici_9
Significant Accounting Policies - Lease Accounting (Detail) $ in Millions | 12 Months Ended |
Jan. 30, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true |
Lessee, Finance Lease, Existence of Option to Extend [true false] | true |
Renewal term, operating lease | 25 years |
Accounts Payable and Accrued Liabilities | |
Lessee, Lease, Description [Line Items] | |
Operating and Finance Lease Concession | $ 4.6 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial lease terms, operating lease | 15 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial lease terms, operating lease | 10 years |
Finance leased Equipment | Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial lease terms, operating lease | 7 years |
Finance leased Equipment | Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial lease terms, operating lease | 3 years |
Significant Accounting Polic_10
Significant Accounting Policies - Impairment (Detail) | 3 Months Ended | 12 Months Ended | |||
May 02, 2020USD ($)store | May 05, 2018USD ($) | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | |
Non-cash impairment charge | $ 20,459,000 | $ 32,086,000 | |||
Indefinite-lived intangible assets | 71,663,000 | $ 86,022,000 | |||
Impairment for corporate asset and other long lived assets | 0 | 0 | |||
Costs Incurred In Disposal Of Assets | $ 800,000 | ||||
RH Baby & Child Gallery and Waterworks Showroom | |||||
Impairment charge on long-lived assets | $ 3,500,000 | ||||
Distribution center closures | RHCA integration into RH platform | |||||
Liability for lease losses | 2,200,000 | ||||
Employee termination benefits | 200,000 | ||||
Restructuring related costs impact to selling, general and administrative expenses | 2,600,000 | ||||
Right of Use Asset | RH Baby & Child Gallery and Waterworks Showroom | |||||
Impairment charge on long-lived assets | 2,000,000 | ||||
Right of Use Asset | Selling, general and administrative expenses | Distribution Center and Home Delivery Location Center | |||||
Impairment charge on long-lived assets | 900,000 | 1,300,000 | |||
Property, Plant and Equipment | RH Baby & Child Gallery and Waterworks Showroom | |||||
Impairment charge on long-lived assets | $ 1,500,000 | ||||
Capitalized property and equipment | Distribution center closures | RHCA integration into RH platform | |||||
Restructuring related costs, including loss on disposal | 200,000 | ||||
RH Segment | |||||
Indefinite-lived intangible assets | 54,663,000 | 48,563,000 | |||
Properties with impairment charges | store | 1 | ||||
RH Segment | RHCA integration into RH platform | |||||
Liability for lease losses | 4,600,000 | $ 3,400,000 | |||
Waterworks | |||||
Percentage of estimated fair value towards income approach | 80.00% | ||||
Percentage of estimated fair value towards market approach | 20.00% | ||||
Non-cash impairment charge | $ 20,500,000 | 35,100,000 | (14,600,000) | $ 14,600,000 | |
Indefinite-lived intangible assets | 17,000,000 | 37,459,000 | |||
Properties with impairment charges | store | 1 | ||||
Waterworks | Tradename | |||||
Non-cash impairment charge | $ 20,500,000 | 20,459,000 | |||
Indefinite-lived intangible assets | $ 17,000,000 | $ 37,459,000 | $ 37,459,000 |
Significant Accounting Polic_11
Significant Accounting Policies - Summary of Allowance for Sales Returns (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Balance at beginning of fiscal year | $ 19,206 | $ 19,821 | $ 10,565 |
Impact of Topic 606 adoption | 5,862 | ||
Provision for sales returns | 133,226 | 107,811 | 112,218 |
Actual sales returns | (126,873) | (108,426) | (108,824) |
Balance at end of fiscal year | 25,559 | 19,206 | $ 19,821 |
Retained earnings | (137,438) | $ (409,253) | |
Impact of Topic 606 adoption | Accounting Standards Update 2014-09 | |||
Retained earnings | $ 21,000 |
Significant Accounting Polic_12
Significant Accounting Policies - Deferred Revenue, Customer Deposits and Gift Cards and Merchandise Credits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Recently Issued Accounting Standards | |||
Accumulated deficit | $ (137,438) | $ (409,253) | |
Revenue recognized on membership period | 1 year | ||
Customer deposits | 50.00% | ||
Revenue recognition, gift cards, breakage | $ 1,800 | 1,600 | $ 1,500 |
Gift cards | |||
Recently Issued Accounting Standards | |||
Gift card liabilities | 19,200 | 16,600 | |
Impact of Topic 606 adoption | Accounting Standards Update 2014-09 | |||
Recently Issued Accounting Standards | |||
Accumulated deficit | 21,000 | ||
Gift card and merchandise credits | |||
Recently Issued Accounting Standards | |||
Revenue related to previous deferrals related to gift cards | $ 16,200 | $ 19,800 | $ 21,600 |
Percentage of remaining revenue recognized on gift card | 75.00% |
Significant Accounting Polic_13
Significant Accounting Policies - Self Insurance (Detail) - USD ($) $ in Millions | Jan. 30, 2021 | Feb. 01, 2020 |
Significant Accounting Policies | ||
Liabilities related to health care coverage | $ 2.6 | $ 2.2 |
Liabilities related to workers' compensation | $ 4.5 | $ 4.7 |
Significant Accounting Polic_14
Significant Accounting Policies - Recently Issues Accounting Standards (Detail) - USD ($) $ in Millions | Jan. 30, 2021 | Feb. 02, 2020 | Feb. 01, 2020 |
New Accounting Pronouncements or Change in Accounting Principle | |||
Allowance for doubtful accounts | $ 3.3 | $ 2.2 | |
ASU 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | ||
ASU 2018-15 | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Prepaid Expense and Other Ass_3
Prepaid Expense and Other Assets - Prepaid Expense and Other Current Assets (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expense and other current assets | $ 42,079 | $ 30,875 |
Capitalized catalog costs | 19,067 | 13,740 |
Promissory note receivable, including interest | 13,569 | |
Vendor deposits | 12,519 | 11,258 |
Right of return asset for merchandise | 7,453 | 5,746 |
Acquisition related escrow deposits | 2,650 | |
Total prepaid expense and other current assets | $ 97,337 | $ 61,619 |
Prepaid Expense and Other Ass_4
Prepaid Expense and Other Assets - Other Non-Current Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Other Assets Noncurrent [Abstract] | ||
Landlord assets under construction-net of tenant allowances | $ 135,531 | $ 122,679 |
Initial direct costs prior to lease commencement | 36,770 | 15,636 |
Capitalized cloud computing costs-net | 7,254 | |
Other deposits | 5,287 | 5,157 |
Acquisition related escrow deposits | 3,975 | |
Deferred financing fees | 1,525 | 2,602 |
Deposits on asset under construction | 60,000 | |
Promissory note receivable, including interest | 5,354 | |
Other non-current assets | 9,835 | 3,417 |
Total other non-current assets | 200,177 | $ 214,845 |
Accumulated amortization | $ 500 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,565,898 | $ 1,379,182 |
Less-accumulated depreciation and amortization | (488,700) | (411,583) |
Property, Plant and Equipment, Net, Total | 1,077,198 | 967,599 |
Finance lease right-of-use assets | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 844,832 | 734,425 |
Less-accumulated depreciation and amortization | (133,000) | (92,300) |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 340,546 | 318,313 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 143,571 | 138,328 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 92,736 | 79,575 |
Machinery, equipment and aircraft | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 67,080 | 66,228 |
Building and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 43,193 | 33,370 |
Built-to-suit property | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 24,881 | 2,882 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 9,059 | $ 6,061 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Property Plant And Equipment [Line Items] | |||
Property Plant And Equipment Gross | $ 1,565,898 | $ 1,379,182 | |
Accumulated amortization | 488,700 | 411,583 | |
Depreciation expense | 58,700 | 63,700 | $ 62,600 |
Construction in Progress | |||
Property Plant And Equipment [Line Items] | |||
Property Plant And Equipment Gross | 31,700 | 16,000 | |
Building and building improvements | |||
Property Plant And Equipment [Line Items] | |||
Property Plant And Equipment Gross | 43,193 | 33,370 | |
Building and building improvements | Future Design Galleries | |||
Property Plant And Equipment [Line Items] | |||
Property Plant And Equipment Gross | 40,200 | ||
Finance lease right-of-use assets | |||
Property Plant And Equipment [Line Items] | |||
Property Plant And Equipment Gross | 844,832 | 734,425 | |
Accumulated amortization | $ 133,000 | $ 92,300 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 07, 2020 | Aug. 28, 2020 | Jan. 30, 2021 |
Business Acquisition [Line Items] | |||
Total consideration paid | $ 17,900 | ||
Furniture business acquired in North America | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 15,000 | $ 19,650 | |
Total consideration paid | $ 4,700 | ||
Escrow account for any post-closing adjustments | 500 | 1,900 | |
Additional consideration | $ 4,600 | ||
Additional escrow, deferred acquisition related payment subject to mutually agreed to conditions | $ 5,000 | ||
Additional escrow, period | 5 years | 2 years |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Aug. 28, 2020 | Feb. 01, 2020 |
Purchase price allocation | |||
Goodwill | $ 141,100 | $ 124,367 | |
Furniture business acquired in North America | |||
Purchase price allocation | |||
Goodwill | 16,689 | ||
Tradename | 4,800 | ||
Tangible assets acquired and liabilities assumed-net | (1,839) | ||
Total | $ 19,650 | $ 15,000 |
Goodwill, Tradenames, Tradema_3
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Goodwill, Tradenames, Trademarks and Domain Names Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Goodwill Activity | ||||||
Goodwill, Beginning balance | $ 124,367 | $ 124,367 | ||||
Goodwill, Ending balance | 141,100 | $ 124,367 | ||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 86,022 | 86,022 | ||||
Indefinite-lived intangible assets, Impairment | (20,459) | $ (32,086) | ||||
Indefinite-lived intangible assets, Ending balance | 71,663 | 86,022 | ||||
RH Segment | ||||||
Goodwill Activity | ||||||
Goodwill, Beginning balance | 124,367 | 124,367 | 124,379 | |||
Goodwill, Acquisition | 16,689 | |||||
Goodwill, Foreign Currency Translation | 44 | (12) | ||||
Goodwill, Ending balance | 141,100 | 124,367 | 124,379 | |||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 48,563 | 48,563 | ||||
Indefinite-lived intangible assets, Ending balance | 54,663 | 48,563 | ||||
RH Segment | Tradenames, trademarks and domain names | ||||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 48,563 | 48,563 | 48,563 | |||
Indefinite-lived intangible assets, Acquisition | 6,100 | |||||
Indefinite-lived intangible assets, Ending balance | 54,663 | 48,563 | 48,563 | |||
Waterworks | ||||||
Goodwill Activity | ||||||
Impairment | (51,100) | (17,400) | $ (33,700) | $ (51,100) | ||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 37,459 | 37,459 | ||||
Indefinite-lived intangible assets, Impairment | (20,500) | (35,100) | 14,600 | (14,600) | ||
Indefinite-lived intangible assets, Ending balance | 17,000 | 37,459 | ||||
Waterworks | Tradename | ||||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 37,459 | 37,459 | 37,459 | |||
Indefinite-lived intangible assets, Impairment | $ (20,500) | (20,459) | ||||
Indefinite-lived intangible assets, Ending balance | $ 17,000 | $ 37,459 | $ 37,459 |
Goodwill, Tradenames, Tradema_4
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Waterworks Tradename Impairment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||||
Non-cash impairment charge | $ 20,459 | $ 32,086 | ||||
Waterworks | ||||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||||
Non-cash impairment charge | $ 20,500 | 35,100 | $ (14,600) | 14,600 | ||
Goodwill impairment | $ 51,100 | $ 17,400 | $ 33,700 | $ 51,100 | ||
Tradename | Waterworks | ||||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||||
Non-cash impairment charge | $ 20,500 | $ 20,459 |
Equity Method Investments (Deta
Equity Method Investments (Detail) $ in Thousands | 12 Months Ended |
Jan. 30, 2021USD ($) | |
Related Party Transaction [Line Items] | |
Joint venture, percentage of ownership | 50.00% |
Capital contributions | $ 80,723 |
Share of equity method investments losses | $ 888 |
Aspen LLC's | |
Related Party Transaction [Line Items] | |
Joint venture, percentage of ownership | 50.00% |
Maximum total aggregate capital contributions | $ 105,000 |
Transaction costs | 2,100 |
Capital contributions | 99,200 |
Capital funding requirements | 5,800 |
Share of equity method investments losses | 900 |
Aspen LLC's | Cash | |
Related Party Transaction [Line Items] | |
Capital contributions | 79,000 |
Aspen LLC's | Promissory notes receivable | |
Related Party Transaction [Line Items] | |
Capital contributions | 20,200 |
Aspen LLC's | Prepaid expenses and other current assets | Promissory notes receivable | |
Related Party Transaction [Line Items] | |
Contributed capital membership interest | $ 13,600 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Accounts payable | $ 224,906 | $ 180,714 |
Accrued compensation | 84,860 | 64,659 |
Accrued freight and duty | 29,754 | 25,170 |
Accrued sales taxes | 23,706 | 19,618 |
Accrued occupancy | 17,671 | 12,067 |
Deferred consideration for asset purchase | 14,387 | |
Accrued professional fees | 5,383 | 4,381 |
Accrued catalog costs | 4,354 | 8,267 |
Other accrued expenses | 19,401 | 15,433 |
Total accounts payable and accrued expenses | $ 424,422 | $ 330,309 |
Accounts Payable, Accrued Exp_4
Accounts Payable, Accrued Expenses and Other Current Liabilities - Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||||
Federal and state taxes payable | $ 49,539 | $ 13,591 | ||
Allowance for sales returns | 25,559 | 19,206 | $ 19,821 | $ 10,565 |
Current portion of equipment promissory notes | 22,747 | 22,009 | ||
Unredeemed gift card and merchandise credit liability | 19,173 | 16,625 | ||
Finance lease liabilities | 14,671 | 9,188 | ||
Product recall reserve | 8,181 | 2,055 | ||
Promissory notes on asset under construction | 53,000 | |||
Other current liabilities | 5,175 | 5,040 | ||
Total other current liabilities | $ 145,045 | $ 140,714 |
Other Non-Current Obligations_2
Other Non-Current Obligations (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Other Non-Current Obligations. | ||
Deferred payroll taxes | $ 4,461 | |
Rollover units and profit interests | 3,490 | $ 3,064 |
Unrecognized tax benefits | 3,114 | 3,020 |
Notes payable for share repurchases | 553 | 18,741 |
Other noncurrent obligations | 5,363 | 3,695 |
Total other non-current obligations | $ 16,981 | $ 28,520 |
Leases - Lease Costs-Net (Detai
Leases - Lease Costs-Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Lease costs-net: | |||
Operating lease cost | $ 84,852 | $ 86,448 | $ 87,742 |
Finance lease costs | |||
Amortization of leased assets | 41,292 | 36,991 | 28,848 |
Interest on lease liabilities | 24,011 | 22,608 | 16,785 |
Variable lease costs | 20,485 | 23,471 | 21,889 |
Sublease income | (7,723) | (9,609) | (7,794) |
Total lease cost-net | 162,917 | 159,909 | 147,470 |
Variable lease payments | 13,400 | 14,600 | 13,000 |
Common area maintenance | $ 7,100 | $ 8,900 | $ 8,900 |
Leases - Lease Right-of-Use Ass
Leases - Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating leases | $ 456,164 | $ 410,904 |
Balance Sheet Classification, Operating lease right-of-use assets | Operating leases | Operating leases |
Finance leases | $ 711,804 | $ 642,117 |
Balance Sheet Classification, Property and equipment-net | Property and equipment-net | Property and equipment-net |
Total lease right-of-use assets | $ 1,167,968 | $ 1,053,021 |
Liabilities, Current | ||
Operating leases, current | $ 71,524 | $ 58,924 |
Balance Sheet Classification, Operating lease liabilities | Operating leases, current | Operating leases, current |
Finance leases, current | $ 14,671 | $ 9,188 |
Balance Sheet Classification, Other current liabilities | Other current liabilities | Other current liabilities |
Total lease liabilities-current | $ 86,195 | $ 68,112 |
Liabilities, Non-current | ||
Operating leases, noncurrent | $ 448,169 | $ 409,930 |
Balance Sheet Classification, Non-current operating lease liabilities | Operating leases, noncurrent | Operating leases, noncurrent |
Finance leases, noncurrent | $ 485,481 | $ 442,988 |
Balance Sheet Classification, Non-current finance lease liabilities | Finance leases, noncurrent | Finance leases, noncurrent |
Total lease liabilities-non-current | $ 933,650 | $ 852,918 |
Total lease liabilities | 1,019,845 | 921,030 |
Finance lease right-of-use assets, accumulated amortization | $ 133,000 | $ 92,300 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Leases | ||
2021 | $ 28,300 | |
2022 | 38,900 | |
2023 | 43,900 | |
2024 | 45,600 | |
2025 | 47,100 | |
Thereafter | 589,700 | |
Maturities of lease liabilities, Operating Leases | ||
2021 | 90,361 | |
2022 | 79,294 | |
2023 | 71,580 | |
2024 | 65,332 | |
2025 | 64,984 | |
Thereafter | 251,637 | |
Total lease payments | 623,188 | |
Less-imputed interest | (103,495) | |
Present value of lease liabilities | 519,693 | |
Maturities of lease liabilities, Finance Leases | ||
2021 | 38,786 | |
2022 | 39,203 | |
2023 | 39,613 | |
2024 | 39,984 | |
2025 | 41,173 | |
Thereafter | 594,460 | |
Total lease payments | 793,219 | |
Less-imputed interest | (293,067) | |
Present value of lease liabilities | 500,152 | |
Total maturities of lease liabilities | ||
2021 | 129,147 | |
2022 | 118,497 | |
2023 | 111,193 | |
2024 | 105,316 | |
2025 | 106,157 | |
Thereafter | 846,097 | |
Total lease payments | 1,416,407 | |
Less-imputed interest | (396,562) | |
Present value of lease liabilities | 1,019,845 | $ 921,030 |
Legally binding payments for leases signed but not yet commenced | 793,500 | |
Future commitments under short-term lease agreements | $ 700 | |
Short-term lease agreements, commitments | true |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Detail) | Jan. 30, 2021 | Feb. 01, 2020 |
Weighted-average remaining lease term (years) | ||
Operating leases, years | 8 years 8 months 12 days | 8 years 10 months 24 days |
Finance leases, years | 18 years 4 months 24 days | 18 years 7 months 6 days |
Weighted-average discount rate | ||
Operating leases, percent | 3.97% | 3.82% |
Finance leases, percent | 5.04% | 5.25% |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows from operating leases | $ (75,794) | $ (95,329) | $ (91,965) |
Operating cash flows from finance leases | (20,839) | (25,260) | (16,785) |
Financing cash flows from finance leases | (12,498) | (9,682) | (6,885) |
Total cash outflows from leases | (109,131) | (130,271) | (115,635) |
Lease Right Of Use Assets Obtained In Exchange For Lease Obligations net Of Lease Terminations Non Cash Abstract | |||
Operating leases (non-cash) | 113,828 | 34,063 | 174,977 |
Finance leases (non-cash) | $ 57,873 | $ 42,122 | $ 33,790 |
Leases - Sale-Leaseback Transac
Leases - Sale-Leaseback Transaction and Long-lived Asset Impairment (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
May 02, 2020USD ($)store | Jan. 30, 2021USD ($) | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | |
Sale Leaseback Transaction [Line Items] | ||||
Renewal term, operating lease | 25 years | |||
Net gain (loss) related to the sale-leaseback transaction | $ (9,352) | $ 1,196 | $ (8,497) | |
RH Baby & Child Gallery and Waterworks Showroom | ||||
Sale Leaseback Transaction [Line Items] | ||||
Impairment charge on long-lived assets | $ 3,500 | |||
Sale-leaseback Transaction | Yountville Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Sale proceeds | $ 23,500 | |||
Sale-leaseback Transaction | Minneapolis Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Sale proceeds | $ 25,500 | |||
Operating Leaseback Arrangement | Yountville Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Initial lease terms, operating lease | 15 years | |||
Renewal term, operating lease | 30 years | |||
Operating Leaseback Arrangement | Minneapolis Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Initial lease terms, operating lease | 20 years | |||
Renewal term, operating lease | 10 years | |||
Selling, general and administrative expenses | Operating Leaseback Arrangement | Yountville Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Net gain (loss) related to the sale-leaseback transaction | $ 1,200 | |||
Selling, general and administrative expenses | Operating Leaseback Arrangement | Minneapolis Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Net gain (loss) related to the sale-leaseback transaction | $ (9,400) | |||
RH Segment | ||||
Sale Leaseback Transaction [Line Items] | ||||
Properties with impairment charges | store | 1 | |||
RH Segment | Yountville Design Gallery | ||||
Sale Leaseback Transaction [Line Items] | ||||
Impairment charge on long-lived assets | $ 8,500 |
Convertible Senior Notes - $350
Convertible Senior Notes - $350 million 0.00% Convertible Senior Notes due 2024 (Detail) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)D$ / shares | Jan. 30, 2021USD ($)$ / shares | Feb. 01, 2020USD ($) | Feb. 02, 2019USD ($) | |
Debt default conditions | ||||
Amortization of debt discount | $ 42,372,000 | $ 46,245,000 | $ 41,868,000 | |
Convertible senior notes due 2024 | ||||
Debt Instrument | ||||
Debt instrument, issuance date | Sep. 30, 2019 | |||
Debt instrument, principal amount | $ 350,000,000 | $ 350,000,000 | 350,000,000 | |
Debt instrument, maturity date | Sep. 15, 2024 | |||
Debt default conditions | ||||
Events of default and acceleration of maturity description | Certain events are also considered “events of default” under the 2024 Notes, which may result in the acceleration of the maturity of the 2024 Notes, as described in the indenture governing the 2024 Notes. Events of default under the indenture for the 2024 Notes include, among other things, the occurrence of an event of default by us as defined under any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness of the Company or any of its significant subsidiaries for money borrowed, if that event of default (i) constitutes the failure to pay when due indebtedness in the aggregate principal amount in excess of $20 million and (ii) such event of default continues for a period of 30 days after written notice is delivered to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% of the aggregate principal amount of the 2024 Notes then outstanding. | |||
Debt Instrument Convertible Terms Of Conversion Feature | The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. | |||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||
Debt instrument, initial conversion rate | 100 | |||
Debt instrument, conversion principal amount | $ 1,000 | |||
Debt instrument, total conversion rate | 1,656,000 | |||
Debt instrument, convertible earliest date | Jun. 15, 2024 | |||
Conversion price per share | $ / shares | $ 211.40 | |||
Premium on stock trigger price | 25.00% | |||
Debt instrument, convertible, stock price trigger | $ / shares | $ 169.12 | $ 169.12 | ||
Debt instrument, effective interest rate | 5.74% | |||
Third party offering costs | $ 1,300,000 | |||
Amortization of debt issuance costs | $ 700,000 | 200,000 | ||
Amortization of debt discount | $ 15,800,000 | $ 5,600,000 | ||
Convertible senior notes due 2024 | Common Stock | ||||
Debt default conditions | ||||
Debt instrument, initial conversion rate | 4.7304 | |||
Conversion price per share | $ / shares | $ 211.40 | |||
Convertible senior notes due 2024 | Convertible debt instrument conversion period one | ||||
Debt default conditions | ||||
Debt instrument, convertible trading days | D | 20 | |||
Debt instrument, convertible consecutive trading days | D | 30 | |||
Debt instrument, convertible percentage of stock price | 130.00% | |||
Convertible senior notes due 2024 | Convertible debt instrument conversion period two | ||||
Debt default conditions | ||||
Debt instrument, convertible trading days | D | 5 | |||
Debt instrument, convertible consecutive trading days | D | 10 | |||
Debt instrument, convertible percentage of stock price | 98.00% | |||
Private Offering | Convertible senior notes due 2024 | ||||
Debt Instrument | ||||
Debt instrument, principal amount | $ 350,000,000 | |||
Debt instrument, interest rate | 0.00% |
Convertible Senior Notes - Carr
Convertible Senior Notes - Carrying Value of the 2024 Notes (Detail) - Convertible senior notes due 2024 - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Sep. 30, 2019 |
Liability component | |||
Principal | $ 350,000 | $ 350,000 | $ 350,000 |
Less: Debt discount | (65,818) | (81,634) | $ (3,500) |
Net carrying amount | 284,182 | 268,366 | |
Equity component | $ 87,252 | $ 87,252 |
Convertible Senior Notes - 2024
Convertible Senior Notes - 2024 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Debt Instrument | ||||
Total cost of convertible note hedge transactions | $ 91,350 | $ 91,857 | ||
Cash proceeds from sale of warrants | $ 50,225 | $ 51,021 | ||
Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Shares issued upon conversion | 167,100 | |||
Deferred tax asset | $ 22,700 | |||
Convertible senior notes due 2024 | ||||
Debt Instrument | ||||
Debt instrument, issuance date | Sep. 30, 2019 | |||
Conversion price per share | $ 211.40 | |||
Premium on stock trigger price | 25.00% | |||
Debt instrument, convertible, stock price trigger | $ 169.12 | $ 169.12 | ||
Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||||
Debt Instrument | ||||
Debt instrument, issuance date | Sep. 30, 2019 | |||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.656 million shares of our common stock at a price of approximately $211.40 per share. | |||
Shares issued upon conversion | 1,656,000 | |||
Conversion price per share | $ 211.40 | |||
Total cost of convertible note hedge transactions | $ 91,400 | |||
Warrants price per share | $ 338.24 | |||
Premium on stock trigger price | 100.00% | |||
Cash proceeds from sale of warrants | $ 50,200 | |||
Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | Maximum | ||||
Debt Instrument | ||||
Warrants sold to purchase common stock | 3,300,000 | |||
Common Stock | Convertible senior notes due 2024 | ||||
Debt Instrument | ||||
Conversion price per share | $ 211.40 |
Convertible Senior Notes - $335
Convertible Senior Notes - $335 million 0.00% Convertible Senior Notes due 2023 (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020USD ($)shares | Jun. 30, 2018USD ($)D$ / shares | May 02, 2020USD ($) | Jan. 30, 2021USD ($)$ / sharesshares | Feb. 01, 2020USD ($)shares | Feb. 02, 2019USD ($)shares | |
Debt default conditions | ||||||
(Gain) Loss on extinguishment of debt | $ 152,000 | $ (6,472,000) | $ (917,000) | |||
Amortization of debt discount | $ 42,372,000 | $ 46,245,000 | $ 41,868,000 | |||
Common Stock | ||||||
Debt default conditions | ||||||
Shares acquired from notes settlement | shares | 600 | 2,167,396 | 2,050,379 | |||
Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, principal amount | $ 335,000,000 | $ 335,000,000 | ||||
Debt instrument, maturity date | Jun. 15, 2023 | |||||
Debt default conditions | ||||||
Events of default and acceleration of maturity description | Certain events are also considered “events of default” under the 2023 Notes, which may result in the acceleration of the maturity of the 2023 Notes, as described in the indenture governing the 2023 Notes. Events of default under the indenture for the 2023 Notes include, among other things, the occurrence of an event of default by us as defined under any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness of the Company or any of its significant subsidiaries for money borrowed, if that event of default (i) constitutes the failure to pay when due indebtedness in the aggregate principal amount in excess of $20 million and (ii) such event of default continues for a period of 30 days after written notice is delivered to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% of the aggregate principal amount of the 2023 Notes then outstanding. | |||||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||||
Debt instrument, initial conversion rate | 100 | |||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | |||||
Debt instrument, effective interest rate | 6.35% | |||||
Aggregate amounts outstanding | $ 2,400,000 | |||||
Debt amount settled in cash | $ 2,400,000 | |||||
Shares issued upon conversion | shares | 7,307 | |||||
(Gain) Loss on extinguishment of debt | $ (100,000) | |||||
Third party offering costs | $ 4,600,000 | |||||
Amortization of debt issuance costs | 1,000,000 | 900,000 | $ 500,000 | |||
Amortization of debt discount | $ 17,700,000 | $ 16,500,000 | $ 9,700,000 | |||
Convertible senior notes due 2023 | Convertible debt instrument conversion period one | ||||||
Debt default conditions | ||||||
Debt instrument, convertible trading days | D | 20 | |||||
Debt instrument, convertible consecutive trading days | D | 30 | |||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period two | ||||||
Debt default conditions | ||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
Debt instrument, convertible trading days | D | 5 | |||||
Debt instrument, convertible consecutive trading days | D | 10 | |||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||
Convertible senior notes due 2023 | Common Stock | ||||||
Debt default conditions | ||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. | |||||
Debt instrument, initial conversion rate | 5.1640 | |||||
Debt instrument, conversion principal amount | $ 1,000 | |||||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | ||||
Convertible bond hedge and warrant transactions | ||||||
Debt default conditions | ||||||
Shares issued upon conversion | shares | 167,100 | |||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||
Debt default conditions | ||||||
Conversion price per share | $ / shares | $ 309.84 | |||||
Shares issued upon conversion | shares | 2 | |||||
Shares received upon exercise of warrants | shares | 7,305 | |||||
Private Offering | Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||
Debt instrument, principal amount | $ 300,000,000 | $ 335,000,000 | ||||
Debt instrument, interest rate | 0.00% | |||||
Overallotment Option | Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, principal amount | $ 35,000,000 |
Convertible Senior Notes - Ca_2
Convertible Senior Notes - Carrying Value of the 2023 Notes (Detail) - Convertible senior notes due 2023 - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Jun. 30, 2018 |
Liability component | |||
Principal | $ 335,000 | $ 335,000 | |
Less: Debt discount | (47,064) | (64,729) | $ (1,700) |
Net carrying amount | 287,936 | 270,271 | |
Equity component | $ 90,990 | $ 90,990 |
Convertible Senior Notes - 2023
Convertible Senior Notes - 2023 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2020shares | Jun. 30, 2018USD ($)derivative$ / sharesshares | Jan. 30, 2021USD ($)$ / shares | Feb. 01, 2020USD ($)shares | Feb. 02, 2019USD ($) | |
Debt Instrument | |||||
Total cost of convertible note hedge transactions | $ 91,350 | $ 91,857 | |||
Cash proceeds from sale of warrants | $ 50,225 | $ 51,021 | |||
Convertible bond hedge and warrant transactions | |||||
Debt Instrument | |||||
Shares issued upon conversion | shares | 167,100 | ||||
Deferred tax asset | $ 22,700 | ||||
Convertible senior notes due 2023 | |||||
Debt Instrument | |||||
Shares issued upon conversion | shares | 7,307 | ||||
Warrants price per share | $ / shares | $ 309.84 | ||||
Warrants sold to purchase common stock | shares | 1,730,000 | ||||
Cash proceeds from sale of warrants | $ 51,000 | ||||
Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | |||||
Debt Instrument | |||||
Debt instrument, issuance date | Jun. 30, 2018 | ||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.730 million shares of our common stock at a price of approximately $193.65 per share | ||||
Shares issued upon conversion | shares | 2 | ||||
Conversion price per share | $ / shares | $ 309.84 | ||||
Total cost of convertible note hedge transactions | $ 91,900 | ||||
Convertible note hedge, number of shares | derivative | 1,730,000 | ||||
Deferred tax liability | $ 22,300 | ||||
Deferred tax asset | $ 22,500 | ||||
Common Stock | Convertible senior notes due 2023 | |||||
Debt Instrument | |||||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | |||
Warrants Subject to Certain Adjustment Mechanisms | Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | Maximum | |||||
Debt Instrument | |||||
Warrants sold to purchase common stock | shares | 3,500,000 |
Convertible Senior Notes - $300
Convertible Senior Notes - $300 million 0.00% Convertible Senior Notes due 2020 (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 29, 2020shares | Jul. 31, 2020USD ($)shares | May 31, 2020USD ($)shares | Jul. 31, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)D$ / shares | Aug. 01, 2020USD ($) | Jan. 30, 2021USD ($)$ / sharesshares | Feb. 01, 2020USD ($)shares | Feb. 02, 2019USD ($)shares | |
Debt Instrument | |||||||||
Amortization of debt discount | $ 42,372,000 | $ 46,245,000 | $ 41,868,000 | ||||||
(Gain) Loss on extinguishment of debt | $ 152,000 | $ (6,472,000) | $ (917,000) | ||||||
Common stock issued from settlement of Notes | shares | 20,995,387 | 19,236,681 | |||||||
Common Stock | |||||||||
Debt Instrument | |||||||||
Shares acquired from notes settlement | shares | 600 | 2,167,396 | 2,050,379 | ||||||
Convertible senior notes due 2020 | |||||||||
Debt Instrument | |||||||||
Debt instrument, issuance date | Jun. 30, 2015 | ||||||||
Debt instrument, principal amount | $ 300,000,000 | $ 300,000,000 | |||||||
Debt instrument, maturity date | Jul. 15, 2020 | ||||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2020 Notes was 8.4656 shares of common stock per $1,000 principal amount of 2020 Notes, which was equivalent to an initial conversion price of approximately $118.13 per share. | ||||||||
Events of default and acceleration of maturity description | Certain events were also considered “events of default” under the 2020 Notes, which could have resulted in the acceleration of the maturity of the 2020 Notes, as described in the indenture governing the 2020 Notes. | ||||||||
Debt instrument, convertible earliest date | Mar. 15, 2020 | ||||||||
Debt instrument, effective interest rate | 6.47% | ||||||||
Discounts upon original issuance | $ 3,800,000 | ||||||||
Third party offering costs | $ 2,300,000 | ||||||||
Amortization of debt issuance costs | $ 600,000 | 1,200,000 | $ 1,100,000 | ||||||
Amortization of debt discount | 8,900,000 | $ 18,200,000 | $ 17,100,000 | ||||||
Aggregate amounts outstanding | $ 290,600,000 | $ 9,400,000 | $ 0 | ||||||
Debt amount settled in cash | $ 290,600,000 | $ 9,200,000 | |||||||
Shares issued upon conversion | shares | 1,116,718 | 14,927 | |||||||
(Gain) Loss on extinguishment of debt | $ 0 | $ 200,000 | |||||||
Shares acquired from notes settlement | shares | 17 | ||||||||
Convertible senior notes due 2020 | Common Stock | |||||||||
Debt Instrument | |||||||||
Debt instrument, initial conversion rate | 8.4656 | ||||||||
Debt instrument, conversion principal amount | $ 1,000 | ||||||||
Conversion price per share | $ / shares | $ 118.13 | $ 118.13 | |||||||
Convertible senior notes due 2020 | Convertible debt instrument conversion period one | |||||||||
Debt Instrument | |||||||||
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 | Convertible debt instrument conversion period two | |||||||||
Debt Instrument | |||||||||
Debt instrument, conversion principal amount | $ 1,000 | ||||||||
Debt instrument, convertible trading days | D | 5 | ||||||||
Debt instrument, convertible consecutive trading days | D | 10 | ||||||||
Debt instrument, convertible percentage of stock price | 98.00% | ||||||||
Private Offering | Convertible senior notes due 2020 | |||||||||
Debt Instrument | |||||||||
Debt instrument, principal amount | $ 250,000,000 | ||||||||
Debt instrument, interest rate | 0.00% | ||||||||
Overallotment Option | Convertible senior notes due 2020 | |||||||||
Debt Instrument | |||||||||
Debt instrument, issuance date | Jul. 31, 2015 | ||||||||
Debt instrument, principal amount | $ 50,000,000 | ||||||||
Convertible bond hedge and warrant transactions | |||||||||
Debt Instrument | |||||||||
Shares issued upon conversion | shares | 167,100 | ||||||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2020 | |||||||||
Debt Instrument | |||||||||
Debt instrument, issuance date | Jun. 30, 2015 | ||||||||
Shares issued upon conversion | shares | 1,386,580 | ||||||||
Shares received upon exercise of warrants | shares | 1,116,735 | 14,927 | |||||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2020 | Common Stock | |||||||||
Debt Instrument | |||||||||
Conversion price per share | $ / shares | $ 118.13 | ||||||||
Shares issued upon conversion | shares | 2,540,000 |
Convertible Senior Notes - Ca_3
Convertible Senior Notes - Carrying Value of the 2020 Notes (Detail) - Convertible senior notes due 2020 - USD ($) $ in Thousands | Feb. 01, 2020 | Jun. 30, 2015 |
Liability component | ||
Principal | $ 300,000 | $ 300,000 |
Less: Debt discount | (8,890) | |
Net carrying amount | 291,110 | |
Equity component | $ 84,003 |
Convertible Senior Notes - 2020
Convertible Senior Notes - 2020 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2020 | May 31, 2020 | Jul. 31, 2015 | Jun. 30, 2015 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Debt Instrument | |||||||
Total cost of convertible note hedge transactions | $ 91,350 | $ 91,857 | |||||
Cash proceeds from sale of warrants | $ 50,225 | $ 51,021 | |||||
Convertible bond hedge and warrant transactions | |||||||
Debt Instrument | |||||||
Shares issued upon conversion | 167,100 | ||||||
Deferred tax asset | $ 22,700 | ||||||
Convertible senior notes due 2020 | |||||||
Debt Instrument | |||||||
Debt instrument, issuance date | Jun. 30, 2015 | ||||||
Shares issued upon conversion | 1,116,718 | 14,927 | |||||
Convertible senior notes due 2020 | Convertible bond hedge and warrant transactions | |||||||
Debt Instrument | |||||||
Debt instrument, issuance date | Jun. 30, 2015 | ||||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we had the option to purchase a total of approximately 2.540 million shares of our common stock at a price of approximately $118.13 per share. | ||||||
Shares issued upon conversion | 1,386,580 | ||||||
Total cost of convertible note hedge transactions | $ 68,300 | ||||||
Warrants price per share | $ 189 | ||||||
Warrants sold to purchase common stock | 2,540,000 | 2,540,000 | |||||
Cash proceeds from sale of warrants | $ 30,400 | ||||||
Deferred tax liability | 32,800 | $ 0 | |||||
Deferred tax asset | $ 26,600 | $ 0 | |||||
Overallotment Option | Convertible senior notes due 2020 | |||||||
Debt Instrument | |||||||
Debt instrument, issuance date | Jul. 31, 2015 | ||||||
Common Stock | Convertible senior notes due 2020 | |||||||
Debt Instrument | |||||||
Conversion price per share | $ 118.13 | $ 118.13 | |||||
Common Stock | Convertible senior notes due 2020 | Convertible bond hedge and warrant transactions | |||||||
Debt Instrument | |||||||
Shares issued upon conversion | 2,540,000 | ||||||
Conversion price per share | $ 118.13 | ||||||
Warrants price per share | $ 189 |
Convertible Senior Notes (Detai
Convertible Senior Notes (Detail) | Jun. 18, 2014USD ($)derivative$ / derivative | Dec. 31, 2020USD ($)shares | Aug. 29, 2020shares | Jul. 31, 2020USD ($)shares | May 31, 2020USD ($)shares | Sep. 30, 2019USD ($)D$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)Dderivative$ / shares$ / derivativeshares | Jul. 31, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)D$ / sharesshares | Jun. 30, 2014USD ($)$ / shares | Aug. 01, 2020USD ($) | May 02, 2020USD ($) | Jan. 30, 2021USD ($)$ / shares$ / derivativeshares | Feb. 01, 2020USD ($)shares | Feb. 02, 2019USD ($)shares |
Debt default conditions | ||||||||||||||||
Amortization of debt discount | $ 42,372,000 | $ 46,245,000 | $ 41,868,000 | |||||||||||||
(Gain) Loss on extinguishment of debt | $ 152,000 | (6,472,000) | (917,000) | |||||||||||||
Total cost of convertible note hedge transactions | 91,350,000 | 91,857,000 | ||||||||||||||
Cash proceeds from sale of warrants | $ 50,225,000 | $ 51,021,000 | ||||||||||||||
Provision at federal statutory tax rate | 21.00% | 21.00% | 21.00% | |||||||||||||
Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Shares issued upon conversion | shares | 167,100 | |||||||||||||||
Deferred tax asset | $ 22,700,000 | |||||||||||||||
Common Stock | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Shares acquired from notes settlement | shares | 600 | 2,167,396 | 2,050,379 | |||||||||||||
Convertible senior notes due 2024 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | |||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Sep. 30, 2019 | |||||||||||||||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||||||||||||||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||||||||||||||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||||||||||||||
Debt instrument, maturity date | Sep. 15, 2024 | |||||||||||||||
Debt instrument, initial conversion rate | 100 | |||||||||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||||||||
Conversion price per share | $ / shares | $ 211.40 | |||||||||||||||
Premium on stock trigger price | 25.00% | |||||||||||||||
Debt instrument, convertible, stock price trigger | $ / shares | $ 169.12 | $ 169.12 | ||||||||||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. | |||||||||||||||
Debt instrument, convertible earliest date | Jun. 15, 2024 | |||||||||||||||
Debt instrument, effective interest rate | 5.74% | |||||||||||||||
Discounts and commissions payable | $ 3,500,000 | $ 65,818,000 | 81,634,000 | |||||||||||||
Third party offering costs | $ 1,300,000 | |||||||||||||||
Amortization of debt issuance costs | 700,000 | 200,000 | ||||||||||||||
Amortization of debt discount | 15,800,000 | 5,600,000 | ||||||||||||||
Deferred tax liability | $ 21,700,000 | |||||||||||||||
Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Sep. 30, 2019 | |||||||||||||||
Conversion price per share | $ / shares | $ 211.40 | |||||||||||||||
Premium on stock trigger price | 100.00% | |||||||||||||||
Shares issued upon conversion | shares | 1,656,000 | |||||||||||||||
Convertible note hedge, number of shares | 1,656,000 | |||||||||||||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.656 million shares of our common stock at a price of approximately $211.40 per share. | |||||||||||||||
Total cost of convertible note hedge transactions | $ 91,400,000 | |||||||||||||||
Cash proceeds from sale of warrants | $ 50,200,000 | |||||||||||||||
Warrants price per share | $ / shares | $ 338.24 | |||||||||||||||
Convertible senior notes due 2024 | Convertible bond hedge and warrant transactions | Maximum | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Warrants sold to purchase common stock | shares | 3,300,000 | |||||||||||||||
Convertible senior notes due 2024 | Convertible debt instrument conversion period one | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, convertible trading days | D | 20 | |||||||||||||||
Debt instrument, convertible consecutive trading days | D | 30 | |||||||||||||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||||||||||||
Convertible senior notes due 2024 | Convertible debt instrument conversion period two | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, convertible trading days | D | 5 | |||||||||||||||
Debt instrument, convertible consecutive trading days | D | 10 | |||||||||||||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||||||||||||
Convertible senior notes due 2024 | Common Stock | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, initial conversion rate | 4.7304 | |||||||||||||||
Conversion price per share | $ / shares | $ 211.40 | |||||||||||||||
Convertible senior notes due 2023 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 335,000,000 | 335,000,000 | ||||||||||||||
Debt default conditions | ||||||||||||||||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||||||||||||||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||||||||||||||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||||||||||||||
Debt instrument, maturity date | Jun. 15, 2023 | |||||||||||||||
Debt instrument, initial conversion rate | 100 | |||||||||||||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | |||||||||||||||
Debt instrument, effective interest rate | 6.35% | |||||||||||||||
Discounts and commissions payable | $ 1,700,000 | 47,064,000 | 64,729,000 | |||||||||||||
Third party offering costs | $ 4,600,000 | |||||||||||||||
Amortization of debt issuance costs | 1,000,000 | 900,000 | $ 500,000 | |||||||||||||
Amortization of debt discount | $ 17,700,000 | 16,500,000 | 9,700,000 | |||||||||||||
Debt amount settled in cash | $ 2,400,000 | |||||||||||||||
Aggregate amounts outstanding | $ 2,400,000 | |||||||||||||||
Shares issued upon conversion | shares | 7,307 | |||||||||||||||
(Gain) Loss on extinguishment of debt | $ (100,000) | |||||||||||||||
Warrants sold to purchase common stock | shares | 1,730,000 | |||||||||||||||
Cash proceeds from sale of warrants | $ 51,000,000 | |||||||||||||||
Warrants price per share | $ / shares | $ 309.84 | |||||||||||||||
Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||||||||||||
Conversion price per share | $ / shares | $ 309.84 | |||||||||||||||
Shares issued upon conversion | shares | 2 | |||||||||||||||
Convertible note hedge, number of shares | derivative | 1,730,000 | |||||||||||||||
Convertible note hedge, price per share | $ / derivative | 193.65 | |||||||||||||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we have the option to purchase a total of approximately 1.730 million shares of our common stock at a price of approximately $193.65 per share | |||||||||||||||
Total cost of convertible note hedge transactions | $ 91,900,000 | |||||||||||||||
Deferred tax liability | $ 22,300,000 | |||||||||||||||
Shares received upon exercise of warrants | shares | 7,305 | |||||||||||||||
Deferred tax asset | $ 22,500,000 | |||||||||||||||
Convertible senior notes due 2023 | Convertible bond hedge and warrant transactions | Warrants Subject to Certain Adjustment Mechanisms | Maximum | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Warrants sold to purchase common stock | shares | 3,500,000 | |||||||||||||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period one | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, convertible trading days | D | 20 | |||||||||||||||
Debt instrument, convertible consecutive trading days | D | 30 | |||||||||||||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||||||||||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period two | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||||||||
Debt instrument, convertible trading days | D | 5 | |||||||||||||||
Debt instrument, convertible consecutive trading days | D | 10 | |||||||||||||||
Debt instrument, convertible percentage of stock price | 98.00% | |||||||||||||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period three | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, convertible earliest date | Mar. 15, 2023 | |||||||||||||||
Convertible senior notes due 2023 | Common Stock | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, initial conversion rate | 5.1640 | |||||||||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||||||||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | ||||||||||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. | |||||||||||||||
Convertible senior notes due 2020 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 300,000,000 | 300,000,000 | ||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jun. 30, 2015 | |||||||||||||||
Debt instrument, maturity date | Jul. 15, 2020 | |||||||||||||||
Debt instrument, conversion description | The initial conversion rate applicable to the 2020 Notes was 8.4656 shares of common stock per $1,000 principal amount of 2020 Notes, which was equivalent to an initial conversion price of approximately $118.13 per share. | |||||||||||||||
Debt instrument, convertible earliest date | Mar. 15, 2020 | |||||||||||||||
Debt instrument, effective interest rate | 6.47% | |||||||||||||||
Discounts and commissions payable | 8,890,000 | |||||||||||||||
Third party offering costs | $ 2,300,000 | |||||||||||||||
Amortization of debt issuance costs | $ 600,000 | 1,200,000 | 1,100,000 | |||||||||||||
Amortization of debt discount | 8,900,000 | 18,200,000 | 17,100,000 | |||||||||||||
Debt amount settled in cash | $ 290,600,000 | $ 9,200,000 | ||||||||||||||
Aggregate amounts outstanding | $ 290,600,000 | $ 9,400,000 | $ 0 | |||||||||||||
Shares issued upon conversion | shares | 1,116,718 | 14,927 | ||||||||||||||
(Gain) Loss on extinguishment of debt | $ 0 | $ 200,000 | ||||||||||||||
Shares acquired from notes settlement | shares | 17 | |||||||||||||||
Convertible senior notes due 2020 | Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jun. 30, 2015 | |||||||||||||||
Shares issued upon conversion | shares | 1,386,580 | |||||||||||||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we had the option to purchase a total of approximately 2.540 million shares of our common stock at a price of approximately $118.13 per share. | |||||||||||||||
Total cost of convertible note hedge transactions | $ 68,300,000 | |||||||||||||||
Warrants sold to purchase common stock | shares | 2,540,000 | 2,540,000 | ||||||||||||||
Cash proceeds from sale of warrants | $ 30,400,000 | |||||||||||||||
Warrants price per share | $ / shares | $ 189 | |||||||||||||||
Deferred tax liability | $ 32,800,000 | $ 0 | ||||||||||||||
Shares received upon exercise of warrants | shares | 1,116,735 | 14,927 | ||||||||||||||
Deferred tax asset | $ 26,600,000 | $ 0 | ||||||||||||||
Convertible senior notes due 2020 | Convertible debt instrument conversion period one | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, convertible trading days | D | 20 | |||||||||||||||
Debt instrument, convertible consecutive trading days | D | 30 | |||||||||||||||
Debt instrument, convertible percentage of stock price | 130.00% | |||||||||||||||
Convertible senior notes due 2020 | Convertible debt instrument conversion period two | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||||||||
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 | Common Stock | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, initial conversion rate | 8.4656 | |||||||||||||||
Debt instrument, conversion principal amount | $ 1,000 | |||||||||||||||
Conversion price per share | $ / shares | $ 118.13 | $ 118.13 | ||||||||||||||
Convertible senior notes due 2020 | Common Stock | Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Conversion price per share | $ / shares | $ 118.13 | |||||||||||||||
Shares issued upon conversion | shares | 2,540,000 | |||||||||||||||
Warrants price per share | $ / shares | $ 189 | |||||||||||||||
Convertible senior notes due 2019 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Aggregate principal amount | $ 350,000,000 | |||||||||||||||
Debt instrument, principal amount | $ 350,000,000 | |||||||||||||||
Debt instrument, interest rate | 0.00% | |||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jun. 30, 2014 | |||||||||||||||
Debt instrument, maturity date | Jun. 15, 2019 | |||||||||||||||
Debt instrument, effective interest rate | 4.51% | |||||||||||||||
Discounts and commissions payable | $ 4,400,000 | |||||||||||||||
Third party offering costs | 1,000,000 | |||||||||||||||
Amortization of debt issuance costs | 400,000 | 900,000 | ||||||||||||||
Amortization of debt discount | 5,900,000 | $ 15,100,000 | ||||||||||||||
Debt amount settled in cash | $ 349,000,000 | |||||||||||||||
Shares issued upon conversion | shares | 42 | |||||||||||||||
(Gain) Loss on extinguishment of debt | $ 1,000,000 | |||||||||||||||
Deferred tax liability | $ 0 | |||||||||||||||
Deferred tax asset | $ 0 | |||||||||||||||
Convertible senior notes due 2019 | Convertible bond hedge and warrant transactions | ||||||||||||||||
Debt default conditions | ||||||||||||||||
Convertible note hedge, number of shares | derivative | 3,015,000 | |||||||||||||||
Convertible note hedge, price per share | $ / derivative | 116.09 | 116.09 | ||||||||||||||
Convertible note hedge, description | we entered into convertible note hedge transactions whereby we had the option to purchase a total of approximately 3.015 million shares of our common stock at a price of approximately $116.09 per share. | |||||||||||||||
Total cost of convertible note hedge transactions | $ 73,300,000 | |||||||||||||||
Warrants sold to purchase common stock | shares | 3,015,000 | |||||||||||||||
Cash proceeds from sale of warrants | $ 40,400,000 | |||||||||||||||
Warrants price per share | $ / shares | $ 171.98 | |||||||||||||||
Deferred tax liability | $ 27,500,000 | |||||||||||||||
Deferred tax asset | $ 28,600,000 | |||||||||||||||
Convertible note hedge, overall price per share | $ / shares | $ 171.98 | |||||||||||||||
Convertible senior notes due 2019 | Common Stock | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 1,000 | |||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, initial conversion rate | 8.6143 | |||||||||||||||
Conversion price per share | $ / shares | $ 116.09 | $ 116.09 | ||||||||||||||
Private Offering | Convertible senior notes due 2024 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 350,000,000 | |||||||||||||||
Debt instrument, interest rate | 0.00% | |||||||||||||||
Private Offering | Convertible senior notes due 2023 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 300,000,000 | $ 335,000,000 | ||||||||||||||
Debt instrument, interest rate | 0.00% | |||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||||||||||||
Private Offering | Convertible senior notes due 2020 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 250,000,000 | |||||||||||||||
Debt instrument, interest rate | 0.00% | |||||||||||||||
Overallotment Option | Convertible senior notes due 2023 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 35,000,000 | |||||||||||||||
Overallotment Option | Convertible senior notes due 2020 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument, principal amount | $ 50,000,000 | |||||||||||||||
Debt default conditions | ||||||||||||||||
Debt instrument, issuance date | Jul. 31, 2015 |
Credit Facilities - Credit Faci
Credit Facilities - Credit Facilities (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Line of Credit Facility | ||
Outstanding Amount | $ 37,532 | $ 53,372 |
Unamortized Debt Issuance Costs | (171) | (310) |
Net Carrying Amount | 37,361 | 53,062 |
Equipment promissory notes | ||
Line of Credit Facility | ||
Outstanding Amount | 37,532 | 53,372 |
Unamortized Debt Issuance Costs | (171) | (310) |
Net Carrying Amount | $ 37,361 | $ 53,062 |
Credit Facilities - Narrative (
Credit Facilities - Narrative (Detail) - USD ($) | Sep. 20, 2019 | Apr. 10, 2019 | Apr. 04, 2019 | Jun. 28, 2017 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Nov. 23, 2018 |
Line of Credit Facility | ||||||||
Outstanding amount | $ 37,532,000 | $ 53,372,000 | ||||||
Availability under revolving line of credit for extensions of credit, percentage of sum of lesser of aggregate revolving commitments and aggregate revolving borrowing base plus lesser of outstanding LILO term loan or LILO term loan borrowing base | 10.00% | |||||||
Fixed charge coverage ratio, fixed amount available under revolving line of credit | $ 40,000,000 | |||||||
Availability under revolving line of credit for extensions of credit, fixed amount | $ 40,000,000 | |||||||
Fixed charge coverage ratio, percentage of sum of lesser of aggregate revolving commitments and aggregate revolving borrowing base plus lesser of outstanding LILO term loan or LILO term loan borrowing base | 10.00% | |||||||
Availability under revolving line of credit for extensions of credit, sweep cash to prepayment of loan description | The Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) the availability under the revolving line of credit for extensions of credit is less than the greater of (A) $40.0 million and (B) 10% of the sum of (a) the lesser of (x) the aggregate revolving commitments under the Credit Agreement and (y) the aggregate revolving borrowing base, plus (b) the lesser of (x) the then outstanding amount of the LILO term loan or (y) the LILO term loan borrowing base | |||||||
(Gain) loss on extinguishment of debt-net | $ (152,000) | 6,472,000 | $ 917,000 | |||||
Outstanding revolving line of credit | $ 37,361,000 | 53,062,000 | ||||||
Restoration Hardware Canada, Inc. | ||||||||
Line of Credit Facility | ||||||||
Line of credit | $ 120,000,000 | |||||||
Interest rate greater than interest rate under the revolving credit facility | 1.25% | |||||||
Acceleration of amortization of debt issuance costs | 800,000 | |||||||
Credit Agreement | ||||||||
Line of Credit Facility | ||||||||
Agreement, date | Jun. 28, 2017 | |||||||
Credit Agreement | Maximum | ||||||||
Line of Credit Facility | ||||||||
Annual restricted payments | $ 3,000,000 | |||||||
Equipment Loan Facility | ||||||||
Line of Credit Facility | ||||||||
Weighted-average interest rate | 4.56% | |||||||
Equipment Loan Facility | Maximum | ||||||||
Line of Credit Facility | ||||||||
Maturity term | 4 years | |||||||
Equipment Loan Facility | Minimum | ||||||||
Line of Credit Facility | ||||||||
Maturity term | 3 years | |||||||
Asset based credit facility | ||||||||
Line of Credit Facility | ||||||||
Deferred financing fees | $ 1,500,000 | 2,600,000 | ||||||
Repaid amount of loan | 359,401,000 | 380,000,000 | 1,008,970,000 | |||||
Revolving Credit Facility | ||||||||
Line of Credit Facility | ||||||||
Aggregate amounts outstanding | 0 | |||||||
Availability under the revolving line of credit | 271,900,000 | |||||||
Outstanding letters of credit | $ 15,400,000 | |||||||
Revolving Credit Facility | Credit Agreement | Scenario, Plan Subject to Satisfaction of Conditions | ||||||||
Line of Credit Facility | ||||||||
Increase in revolving line of credit | $ 200,000,000 | |||||||
Revolving Credit Facility | Credit Agreement | Maximum | ||||||||
Line of Credit Facility | ||||||||
Availability under the revolving line of credit | 600,000,000 | |||||||
Revolving Credit Facility | Credit Agreement | Maximum | Scenario, Plan Subject to Satisfaction of Conditions | ||||||||
Line of Credit Facility | ||||||||
Line of credit | 800,000,000 | |||||||
Revolving Credit Facility | Credit Agreement | Minimum | ||||||||
Line of Credit Facility | ||||||||
Line of credit | 600,000,000 | |||||||
Revolving Credit Facility | Credit Agreement | Restoration Hardware Canada, Inc. | ||||||||
Line of Credit Facility | ||||||||
Availability under the revolving line of credit | 10,000,000 | |||||||
LILO Term Loan Facility | ||||||||
Line of Credit Facility | ||||||||
(Gain) loss on extinguishment of debt-net | $ 500,000 | |||||||
LILO Term Loan Facility | Credit Agreement | ||||||||
Line of Credit Facility | ||||||||
Line of credit facility, maximum borrowing capacity | $ 80,000,000 | |||||||
Second Lien Credit Agreement | ||||||||
Line of Credit Facility | ||||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | |||||||
Line of credit facility, maturity date | Apr. 9, 2024 | |||||||
Repaid amount of loan | $ 200,000,000 | |||||||
(Gain) loss on extinguishment of debt-net | 6,700,000 | |||||||
Prepayment penalty | 4,000,000 | |||||||
Amortization of debt issuance costs | $ 2,700,000 | |||||||
Interest rate description | annual rate generally based on LIBOR plus 6.50% | |||||||
Debt instrument, basis spread on variable rate | 6.50% | |||||||
Variable interest rate description | one-month LIBOR plus 6.50% | |||||||
Equipment promissory notes | ||||||||
Line of Credit Facility | ||||||||
2022 | $ 13,600,000 | |||||||
2023 | 1,200,000 | |||||||
Outstanding amount | 37,532,000 | 53,372,000 | ||||||
Outstanding revolving line of credit | 37,361,000 | $ 53,062,000 | ||||||
Equipment promissory notes | Other current liabilities | ||||||||
Line of Credit Facility | ||||||||
Aggregate amounts outstanding | 22,700,000 | |||||||
Equipment promissory notes | Other non-current obligations | ||||||||
Line of Credit Facility | ||||||||
Aggregate amounts outstanding | $ 14,800,000 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value and Carrying Value of Notes (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 |
Convertible senior notes due 2020 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | $ 295,573 | |
Convertible senior notes, Carrying Value | 291,110 | |
Convertible senior notes due 2023 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | $ 301,794 | 272,623 |
Convertible senior notes, Carrying Value | 287,936 | 270,271 |
Convertible senior notes due 2024 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | 286,161 | 255,849 |
Convertible senior notes, Carrying Value | $ 284,182 | $ 268,366 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2017 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Taxes | ||||
State net operating loss carryovers | $ 5 | |||
Joint venture, percentage of ownership | 50.00% | |||
Foreign net operating loss carryovers | $ 12.3 | |||
Expiration of federal and state net operating loss carryovers | The state net operating loss carryovers will begin to expire in 2022, and the foreign net operating loss carryovers will begin to expire in 2023. | |||
Tax expense and the effective tax rate, if recognized | $ 7.7 | |||
Amended federal tax return claiming refund | $ 5.4 | |||
Income tax benefit from amended tax return | 0 | $ 0 | $ 0 | |
Exposures related to unrecognized tax benefits | 6.2 | |||
Interest accruals | $ 0.5 | $ 0.5 | ||
Tax year open to examination in United States and various states and foreign jurisdictions | 2016 2017 2018 2019 | |||
Period of unrecognized tax benefits change | 12 months |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Taxes | |||
Domestic | $ 378,267 | $ 267,538 | $ 157,827 |
Foreign | (1,854) | 1,644 | 3,137 |
Income before income taxes | $ 376,413 | $ 269,182 | $ 160,964 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Current | |||
Current, Federal | $ 85,708 | $ 45,985 | $ 24,012 |
Current, State | 23,684 | 10,806 | 6,275 |
Current, Foreign | 126 | 403 | 1,270 |
Total current tax expense | 109,518 | 57,194 | 31,557 |
Deferred | |||
Deferred, Federal | (2,251) | (7,173) | (4,428) |
Deferred, State | (2,536) | (1,477) | (2,049) |
Deferred, Foreign | (133) | 263 | 153 |
Total deferred tax benefit | (4,920) | (8,387) | (6,324) |
Total income tax expense | $ 104,598 | $ 48,807 | $ 25,233 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Federal Statutory Tax Rate to Company's Effective Tax Rate (Detail) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Taxes | |||
Provision at federal statutory tax rate | 21.00% | 21.00% | 21.00% |
Non-deductible stock-based compensation | 6.50% | ||
State income taxes-net of federal tax impact | 4.20% | 2.50% | 1.70% |
Tax rate adjustments and other | 0.30% | 0.20% | 0.10% |
Stock compensation-excess benefits | (4.90%) | (6.60%) | (9.90%) |
Goodwill impairment | 1.80% | ||
Valuation allowance | 0.10% | 0.30% | |
Other permanent items | 0.60% | 1.00% | 0.70% |
Effective Income Tax Rate Reconciliation, Percent, Total | 27.80% | 18.10% | 15.70% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 |
Non-current deferred tax assets (liabilities) | |||
Lease liabilities | $ 275,517 | $ 249,243 | |
Stock-based compensation | 24,922 | 22,400 | |
Accrued expense | 21,308 | 21,362 | |
Merchandise inventories | 9,097 | 8,028 | |
Deferred lease credits | 4,917 | 6,395 | |
Net operating loss carryforwards | 1,988 | 1,763 | |
convertible senior notes | 914 | 717 | |
Deferred revenue | 635 | 2,235 | |
Other | 2,269 | 1,846 | |
Non-current deferred tax assets-net | 341,567 | 313,989 | |
Valuation allowance | (2,049) | (1,007) | $ (1,623) |
Non-current deferred tax assets | 339,518 | 312,982 | |
Property and equipment | (147,143) | (137,448) | |
Lease right-of-use assets | (122,306) | (110,075) | |
Tradenames, trademarks and intangibles | (10,349) | (13,026) | |
Prepaid expense and other | (8,010) | (4,882) | |
State benefit | (1,786) | (2,546) | |
Non-current deferred tax liabilities | (289,594) | (267,977) | |
Total net non-current deferred tax assets | $ 49,924 | $ 45,005 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Valuation Allowance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 30, 2021 | Feb. 01, 2020 | |
Income Taxes | ||
Balance at beginning of fiscal year | $ 1,007 | $ 1,623 |
Net changes in deferred tax assets and liabilities | 1,042 | (616) |
Balance at end of fiscal year | $ 2,049 | $ 1,007 |
Income Taxes - Reconciliation_3
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Income Taxes | |||
Balance at beginning of fiscal year | $ 8,514 | $ 8,459 | $ 8,152 |
Gross increases-prior period tax positions | 239 | ||
Gross decreases-prior period tax positions | (129) | (2) | |
Gross increases-current period tax positions | 690 | 438 | 375 |
Reductions based on the lapse of the applicable statutes of limitations | (619) | (381) | (307) |
Balance at end of fiscal year | $ 8,456 | $ 8,514 | $ 8,459 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share (Detail) - shares | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Net Income Per Share | |||||||||||
Weighted-average shares-basic | 20,518,130 | 19,552,836 | 19,386,115 | 19,242,641 | 19,120,709 | 18,765,769 | 18,465,876 | 19,976,858 | 19,668,976 | 19,082,303 | 21,613,678 |
Effect of dilutive stock-based awards | 5,470,980 | 4,554,682 | 4,567,303 | ||||||||
Effect of dilutive convertible senior notes | 2,162,312 | 662,049 | 352,244 | ||||||||
Weighted-average shares-diluted | 30,179,506 | 28,286,124 | 26,564,705 | 19,242,641 | 25,767,864 | 24,170,172 | 22,324,112 | 24,933,987 | 27,302,268 | 24,299,034 | 26,533,225 |
Net Income Per Share - Schedu_2
Net Income Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share Footnotes (Detail) - $ / shares | Jan. 30, 2021 | Sep. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2015 | Jun. 30, 2014 |
Convertible senior notes due 2019 | Common Stock | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | $ 116.09 | $ 116.09 | |||
Convertible senior notes due 2019 | Warrant | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 171.98 | ||||
Convertible senior notes due 2020 | Common Stock | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 118.13 | $ 118.13 | |||
Convertible senior notes due 2020 | Warrant | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 189 | ||||
Convertible senior notes due 2023 | Common Stock | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 193.65 | $ 193.65 | |||
Convertible senior notes due 2023 | Warrant | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 309.84 | ||||
Convertible senior notes due 2024 | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | $ 211.40 | ||||
Convertible senior notes due 2024 | Common Stock | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | 211.40 | ||||
Convertible senior notes due 2024 | Warrant | |||||
Earnings Per Share Diluted | |||||
Conversion price per share | $ 338.24 |
Net Income Per Share - Anti-Dil
Net Income Per Share - Anti-Dilutive Securities Excluded from Diluted Net Income per Share (Detail) - shares | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Options were excluded from calculation of diluted net earnings share | 390,146 | 360,496 | 353,770 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Options were excluded from calculation of diluted net earnings share | 389,830 | 360,496 | 351,145 |
Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Options were excluded from calculation of diluted net earnings share | 316 | 2,625 |
Share Repurchases and Share R_2
Share Repurchases and Share Retirements (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share Repurchase Program and Equity Plans | |||
Shares of common stock purchased under repurchase program | $ 72 | $ 250,032 | $ 250,243 |
Treasury stock, shares retired | 600 | ||
Treasury stock reclassified, amount | $ 100 | 250,300 | 1,250,300 |
Aggregate unpaid principal amount of notes payable for share repurchases | 553 | 18,741 | |
Additional Paid-In Capital | |||
Share Repurchase Program and Equity Plans | |||
Treasury stock reclassified, amount | 77 | 13,180 | 591,519 |
Retained Earnings (Accumulated Deficit) | |||
Share Repurchase Program and Equity Plans | |||
Treasury stock reclassified, amount | 237,091 | 658,807 | |
$950 Million Repurchase Program | |||
Share Repurchase Program and Equity Plans | |||
Share repurchase program authorized amount | $ 950,000 | $ 950,000 | |
Shares of common stock purchased under repurchase program, shares | 2,200,000 | ||
Shares of common stock purchased at an average price per share under repurchase program | $ 115.36 | ||
Shares of common stock purchased under repurchase program | $ 250,000 | ||
Treasury stock, shares retired | 2,170,154 | ||
Amount of shares available under repurchase program | $ 450,000 | ||
Fiscal 2018 $700 million repurchase program | |||
Share Repurchase Program and Equity Plans | |||
Shares of common stock purchased under repurchase program, shares | 2,000,000 | ||
Shares of common stock purchased at an average price per share under repurchase program | $ 122.10 | ||
Shares of common stock purchased under repurchase program | $ 250,000 | ||
Treasury stock, shares retired | 22,267,711 | ||
Fiscal 2017 $700 million repurchase program | |||
Share Repurchase Program and Equity Plans | |||
Share repurchase program authorized amount | $ 700,000 | ||
Fiscal 2017 $300 million repurchase program | |||
Share Repurchase Program and Equity Plans | |||
Share repurchase program authorized amount | 300,000 | ||
Share repurchases under equity plans | |||
Share Repurchase Program and Equity Plans | |||
Treasury stock, shares retired | 17 | ||
Aggregate unpaid principal amount of notes payable for share repurchases | $ 600 | $ 18,700 | |
Aggregate principal amount notes payable | 18,100 | ||
Interest expense related to notes payable for share repurchases | 800 | $ 900 | $ 1,000 |
Director | Share repurchases under equity plans | |||
Share Repurchase Program and Equity Plans | |||
Aggregate unpaid principal amount of notes payable for share repurchases | $ 15,500 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) | Feb. 01, 2021 | Oct. 28, 2020 | Oct. 18, 2020 | Feb. 03, 2020 | Nov. 01, 2012 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | May 31, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Stock-based compensation expense | $ 145,704,000 | $ 21,832,000 | $ 23,983,000 | ||||||
Stock-based compensation cost capitalized | 0 | 0 | 0 | ||||||
Rollover units and profit interests | 3,490,000 | 3,064,000 | |||||||
Selling, general and administrative expenses | $ 858,673,000 | 732,180,000 | 723,841,000 | ||||||
Design Investors WW Acquisition Company, LLC | Profit interests | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Profit interest expected life | 5 years | ||||||||
Selling, general and administrative expenses | $ 400,000 | 500,000 | 400,000 | ||||||
Design Investors WW Acquisition Company, LLC | Profit interests | Other non-current obligations | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Liability associated with the profit interests | $ 2,000,000 | 1,600,000 | |||||||
Fourth performance year | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Performance years | 4 years | ||||||||
Stock Options | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option to purchase of common stock | 700,000 | ||||||||
Exercise price of option granted | $ 385.30 | ||||||||
Time based restricted | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Number of share lapse per year | 175,000 | ||||||||
Time based restricted | Chairman and Chief Executive Officer | Stock Options | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option vesting period | 4 years | ||||||||
Performance based restricted | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Expected vested exercise price description | requirements and stock price performance-based metrics as described further below. | ||||||||
Appreciation rights | Design Investors WW Acquisition Company, LLC | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Rollover units and profit interests | $ 1,500,000 | 1,500,000 | $ 1,500,000 | ||||||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option to purchase of common stock | 6,829,041 | ||||||||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Stock Options | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Stock-based compensation expense | $ 140,400,000 | $ 14,000,000 | 13,600,000 | ||||||
Option to purchase of common stock | 1,769,200 | ||||||||
Exercise price of option granted | $ 273.61 | ||||||||
Unrecognized compensation expense related to unvested options | $ 98,900,000 | ||||||||
Unrecognized compensation expense with weighted-average period | 4 years 7 months 6 days | ||||||||
Aggregate intrinsic value of options outstanding | $ 3,161,700,000 | ||||||||
Aggregate intrinsic value of options vested or expected to vest | 3,006,000,000 | ||||||||
Aggregate intrinsic value of options exercisable | $ 2,535,600,000 | ||||||||
Weighted-average remaining contractual life of options exercisable | 3 years 11 months 1 day | ||||||||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Stock Options | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Stock-based compensation expense | $ 117,100,000 | ||||||||
Unrecognized compensation expense related to unvested options | $ 56,500,000 | ||||||||
2012 Stock Incentive Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,014,841 | 1,630,107 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 419,908 | 384,734 | |||||||
Shares available for future issuance | 427,062 | ||||||||
2012 Stock Incentive Plan | Restricted stock and restricted stock unit | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Stock-based compensation expense | $ 4,900,000 | $ 7,300,000 | $ 10,000,000 | ||||||
Unrecognized compensation expense related to unvested options | $ 2,900,000 | ||||||||
Unrecognized compensation expense with weighted-average period | 9 months 29 days | ||||||||
Time-Based Restrictions and Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Stock-based compensation expense | $ 117,100,000 | ||||||||
Aggregate non-cash stock compensation expense | $ 173,600,000 | ||||||||
Performance-Based Restrictions | Chairman and Chief Executive Officer | Stock Options | Price Objective 1 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option to purchase of common stock | 58,333 | ||||||||
Performance-Based Restrictions | Chairman and Chief Executive Officer | Stock Options | Price Objective 2 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option to purchase of common stock | 58,333 | ||||||||
Performance-Based Restrictions | Chairman and Chief Executive Officer | Stock Options | Price Objective 3 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Option to purchase of common stock | 58,334 | ||||||||
Performance-Based Restrictions | Chairman and Chief Executive Officer | Stock Options | Fourth performance year | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Profit interest expected life | 20 years | ||||||||
Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Common stock, lapse description | The stock price performance-based metrics for the option are set at $500 per share, $650 per share and $800 per share. With respect to any given performance year, if the “twenty day average trading price” our common stock exceeds $500 per share, $650 per share, or $800 per share during such performance year, then the selling restrictions will lapse as to 58,333 shares, 58,333 share and 58,334 shares, respectively, on the last day of such performance year, if Mr. Friedman remains in service with us at such date. | ||||||||
Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | Price Objective 1 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Exercise price of option granted | $ 500 | ||||||||
Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | Price Objective 2 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Exercise price of option granted | 650 | ||||||||
Performance-Based Restrictions | Stock Options | Chairman and Chief Executive Officer | Price Objective 3 | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||||||
Exercise price of option granted | $ 800 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Detail) - 2012 Stock Incentive Plan and 2012 Stock Option Plan - Stock Options | 12 Months Ended |
Jan. 30, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares | 7,134,735 |
Options, Granted | shares | 1,769,200 |
Options, Exercised | shares | (292,949) |
Options, Cancelled | shares | (133,480) |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares | 8,477,506 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 58.34 |
Weighted-Average Exercise Price, Granted | $ / shares | 273.61 |
Weighted-Average Exercise Price, Exercised | $ / shares | 49.08 |
Weighted-Average Exercise Price, Cancelled | $ / shares | 130.36 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 102.44 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Estimate Fair Value of Stock Options Issued (Detail) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Stock-Based Compensation. | |||
Expected volatility | 58.90% | 55.70% | 54.70% |
Expected life (years) | 8 years 3 months 18 days | 7 years 1 month 6 days | 6 years 8 months 12 days |
Risk-free interest rate | 0.60% | 2.30% | 2.90% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information about Stock Options (Detail) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award | |||
Weighted-average fair value per share of stock options granted | $ 168.90 | $ 63.35 | $ 69.60 |
Aggregate intrinsic value of stock options exercised | $ 75,011 | $ 82,718 | $ 77,311 |
Fair value of stock options vested | $ 12,429 | $ 11,816 | $ 13,915 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options Outstanding, Vested or Expected to Vest, and Exercisable (Detail) - Stock Options | 12 Months Ended |
Jan. 30, 2021$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Options Outstanding, Number of Options | shares | 8,477,506 |
Options Outstanding, Weighted-Average Exercise Price | $ 102.49 |
Options Exercisable, Number of Options | shares | 6,566,961 |
Options Exercisable, Weighted-Average Exercise Price | $ 89.25 |
Vested or expected to vest, Number of Options | shares | 7,977,838 |
Vested or expected to vest, Weighted-Average Exercise Price | $ 98.59 |
Range of Exercise Prices $25.39 - $45.82 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 25.39 |
Range of Exercise Prices, Upper | $ 45.82 |
Options Outstanding, Number of Options | shares | 751,494 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 4 years 11 months 26 days |
Options Outstanding, Weighted-Average Exercise Price | $ 36.12 |
Options Exercisable, Number of Options | shares | 480,864 |
Options Exercisable, Weighted-Average Exercise Price | $ 35.84 |
Range of Exercise Prices $46.50 - $46.50 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 46.50 |
Range of Exercise Prices, Upper | $ 46.50 |
Options Outstanding, Number of Options | shares | 2,876,826 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 1 year 9 months |
Options Outstanding, Weighted-Average Exercise Price | $ 46.50 |
Options Exercisable, Number of Options | shares | 2,876,826 |
Options Exercisable, Weighted-Average Exercise Price | $ 46.50 |
Range of Exercise Prices $50.00 - $75.43 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 50 |
Range of Exercise Prices, Upper | $ 75.43 |
Options Outstanding, Number of Options | shares | 2,283,990 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 4 years 2 months 23 days |
Options Outstanding, Weighted-Average Exercise Price | $ 62.51 |
Options Exercisable, Number of Options | shares | 2,271,830 |
Options Exercisable, Weighted-Average Exercise Price | $ 62.54 |
Range of Exercise Prices $79.32 - $154.82 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 79.32 |
Range of Exercise Prices, Upper | $ 154.82 |
Options Outstanding, Number of Options | shares | 1,479,721 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 8 years 1 month 9 days |
Options Outstanding, Weighted-Average Exercise Price | $ 127 |
Options Exercisable, Number of Options | shares | 234,466 |
Options Exercisable, Weighted-Average Exercise Price | $ 97.03 |
Range of Exercise Prices $156.40 - $442.26 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 156.40 |
Range of Exercise Prices, Upper | $ 442.26 |
Options Outstanding, Number of Options | shares | 1,073,475 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 9 years 7 months 13 days |
Options Outstanding, Weighted-Average Exercise Price | $ 345.49 |
Options Exercisable, Number of Options | shares | 702,975 |
Options Exercisable, Weighted-Average Exercise Price | $ 384.43 |
Range of Exercise Prices $500.99 - $500.99 [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Range of Exercise Prices, Lower | 500.99 |
Range of Exercise Prices, Upper | $ 500.99 |
Options Outstanding, Number of Options | shares | 12,000 |
Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 9 years 11 months 19 days |
Options Outstanding, Weighted-Average Exercise Price | $ 500.99 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Award Activity (Detail) - Restricted stock and restricted stock unit - 2012 Stock Incentive Plan - USD ($) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award | |||
Awards, Outstanding - Beginning balance | 219,985 | ||
Awards, Granted | 6,642 | ||
Awards, Released | (113,797) | ||
Awards, Cancelled | (20,580) | ||
Awards, Outstanding - Ending balance | 92,250 | 219,985 | |
Weighted-Average Grant Date Fair Value, Outstanding - Beginning balance | $ 49 | ||
Weighted-Average Grant Date Fair Value, Granted | 371.36 | $ 129.21 | $ 111.38 |
Weighted-average Grant Date Fair Value, Released | 58.96 | ||
Weighted-Average Grant Date Fair Value, Cancelled | 43.92 | ||
Weighted-Average Grant Date Fair Value, Outstanding - Ending balance | $ 61.04 | $ 49 | |
Intrinsic Value, Outstanding | $ 43,851,960 |
Stock-Based Compensation - Ad_2
Stock-Based Compensation - Additional Information about Restricted Stock Awards (Detail) - 2012 Stock Incentive Plan - Restricted stock and restricted stock unit - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award | |||
Weighted-average fair value per share of awards granted | $ 371.36 | $ 129.21 | $ 111.38 |
Grant date fair value of awards released | $ 6,710 | $ 10,522 | $ 11,477 |
Employee Benefit Plans (Detail)
Employee Benefit Plans (Detail) | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |||
Employee's contribution to 401(k) plan | 50.00% | ||
Employer's contribution to 401(k) plan | 0.00% | 0.00% | 0.00% |
Commitments and Contingencies (
Commitments and Contingencies (Detail) | Mar. 21, 2019USD ($) | Jan. 30, 2021USD ($) | Apr. 26, 2017action |
Commitments and Contingencies. | |||
Material off balance sheet commitments | $ 0 | ||
Number of actions consolidated | action | 2 | ||
Aggregate settlement amount | $ 50,000,000 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Detail) | 12 Months Ended | ||
Jan. 30, 2021storesegmentcustomer | Feb. 01, 2020customer | Feb. 02, 2019customer | |
Segment Reporting Information | |||
Number of operating segments | segment | 3 | ||
Number of RH outlet stores | 38 | ||
Number of customers accounted for more than 10% of Company's revenues | customer | 0 | 0 | 0 |
Sales | Customer concentration risk | |||
Segment Reporting Information | |||
Portion of specified customers portion in total revenues | 10.00% | 10.00% | 10.00% |
Canada | |||
Segment Reporting Information | |||
Number of retail stores | 4 | ||
Number of RH outlet stores | 2 | ||
U.K | |||
Segment Reporting Information | |||
Number of retail stores | 1 |
Segment Reporting - Statements
Segment Reporting - Statements of Operations Metrics Reviewed by CODM to Evaluate Performance Internally or as Required under ASC 280 (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Segment Reporting Information | |||||||||||
Net revenues | $ 2,848,626 | $ 2,647,437 | $ 2,505,653 | ||||||||
Gross profit | $ 385,128 | $ 408,330 | $ 332,419 | $ 199,654 | $ 283,073 | $ 284,166 | $ 294,958 | $ 232,814 | 1,325,531 | 1,095,011 | 985,577 |
Depreciation and amortization | 100,040 | 100,739 | 91,372 | ||||||||
Share of equity method investments losses | 888 | ||||||||||
RH Segment | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 2,729,422 | 2,514,296 | 2,375,472 | ||||||||
Gross profit | 1,274,148 | 1,038,722 | 933,805 | ||||||||
Depreciation and amortization | 95,071 | 96,148 | 86,719 | ||||||||
Waterworks | |||||||||||
Segment Reporting Information | |||||||||||
Net revenues | 119,204 | 133,141 | 130,181 | ||||||||
Gross profit | 51,383 | 56,289 | 51,772 | ||||||||
Depreciation and amortization | 4,969 | $ 4,591 | $ 4,653 | ||||||||
Real Estate Investments | |||||||||||
Segment Reporting Information | |||||||||||
Share of equity method investments losses | $ 900 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Metrics as Required Under ASC 280 (Detail) - USD ($) $ in Thousands | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 |
Segment Reporting Information | |||
Goodwill | $ 141,100 | $ 124,367 | |
Trademarks and domain names | 71,663 | 86,022 | |
Equity method investments | 100,603 | ||
Total assets | 2,898,313 | 2,445,694 | |
RH Segment | |||
Segment Reporting Information | |||
Goodwill | 141,100 | 124,367 | $ 124,379 |
Trademarks and domain names | 54,663 | 48,563 | |
Total assets | 2,659,944 | 2,301,823 | |
Waterworks | |||
Segment Reporting Information | |||
Trademarks and domain names | 17,000 | 37,459 | |
Total assets | 137,766 | $ 143,871 | |
Real Estate Investments | |||
Segment Reporting Information | |||
Equity method investments | 100,603 | ||
Total assets | $ 100,603 |
Segment Reporting - Balance S_2
Segment Reporting - Balance Sheet Metrics as Required Under ASC 280 Footnotes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
May 02, 2020 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Segment Reporting Information | ||||||
Goodwill and tradename impairment | $ 20,459 | $ 32,086 | ||||
Waterworks | ||||||
Segment Reporting Information | ||||||
Goodwill impairment | $ 51,100 | 17,400 | $ 33,700 | $ 51,100 | ||
Goodwill and tradename impairment | $ 20,500 | $ 35,100 | $ (14,600) | $ 14,600 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income and Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Segment Reporting Information | |||
Income from operations | $ 466,858 | $ 362,831 | $ 261,736 |
Non-cash compensation | (117,084) | ||
Asset impairments and change in useful lives | (12,851) | (21,899) | (7,218) |
Gain (loss) on sale leaseback transaction | (9,352) | 1,196 | (8,497) |
Recall accrual | (7,370) | 3,988 | (1,619) |
Reorganization related costs | (7,027) | (1,075) | (9,977) |
Legal settlement | 1,193 | 5,289 | |
Asset held for sale gain | 333 | ||
Distribution center closures | (3,046) | ||
Impact of inventory step-up | (380) | ||
Interest expense-net | 69,250 | 87,177 | 67,769 |
Goodwill And Tradename Impairment | 20,459 | 32,086 | |
(Gain) loss on extinguishment of debt-net | (152) | 6,472 | 917 |
Income before equity method investments | 377,301 | 269,182 | 160,964 |
Operating segments | RH Segment | |||
Segment Reporting Information | |||
Income from operations | 616,523 | 375,315 | 288,106 |
Operating segments | Waterworks | |||
Segment Reporting Information | |||
Income from operations | $ 4,019 | $ 3,780 | $ (922) |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues, Categories (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Segment Reporting Information | |||
Total net revenues | $ 2,848,626 | $ 2,647,437 | $ 2,505,653 |
Furniture | |||
Segment Reporting Information | |||
Total net revenues | 1,940,658 | 1,762,034 | 1,635,631 |
Non-furniture | |||
Segment Reporting Information | |||
Total net revenues | $ 907,968 | $ 885,403 | $ 870,022 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 30, 2021 | Oct. 31, 2020 | Aug. 01, 2020 | May 02, 2020 | Feb. 01, 2020 | Nov. 02, 2019 | Aug. 03, 2019 | May 04, 2019 | Jan. 30, 2021 | Feb. 01, 2020 | Feb. 02, 2019 | |
Selected Quarterly Financial Data (Unaudited) | |||||||||||
Net revenues | $ 812,436 | $ 844,013 | $ 709,282 | $ 482,895 | $ 664,976 | $ 677,526 | $ 706,514 | $ 598,421 | |||
Gross profit | 385,128 | 408,330 | 332,419 | 199,654 | 283,073 | 284,166 | 294,958 | 232,814 | $ 1,325,531 | $ 1,095,011 | $ 985,577 |
Net income | $ 130,193 | $ 46,411 | $ 98,423 | $ (3,212) | $ 68,433 | $ 52,463 | $ 63,757 | $ 35,722 | $ 271,815 | $ 220,375 | $ 135,731 |
Weighted-average shares used in computing basic net income (loss) per share | 20,518,130 | 19,552,836 | 19,386,115 | 19,242,641 | 19,120,709 | 18,765,769 | 18,465,876 | 19,976,858 | 19,668,976 | 19,082,303 | 21,613,678 |
Basic net income (loss) per share | $ 6.35 | $ 2.37 | $ 5.08 | $ (0.17) | $ 3.58 | $ 2.80 | $ 3.45 | $ 1.79 | $ 13.82 | $ 11.55 | $ 6.28 |
Weighted-average shares used in computing diluted net income (loss) per share | 30,179,506 | 28,286,124 | 26,564,705 | 19,242,641 | 25,767,864 | 24,170,172 | 22,324,112 | 24,933,987 | 27,302,268 | 24,299,034 | 26,533,225 |
Diluted net income (loss) per share | $ 4.31 | $ 1.64 | $ 3.71 | $ (0.17) | $ 2.66 | $ 2.17 | $ 2.86 | $ 1.43 | $ 9.96 | $ 9.07 | $ 5.12 |