Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 01, 2021 | Jun. 04, 2021 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | May 1, 2021 | |
Entity File Number | 001-35720 | |
Entity Registrant Name | RH | |
Entity Tax Identification Number | 45-3052669 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 15 Koch Road | |
Entity Address, City or Town | Corte Madera | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94925 | |
City Area Code | 415 | |
Local Phone Number | 924-1005 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | RH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,030,374 | |
Entity Central Index Key | 0001528849 | |
Current Fiscal Year End Date | --01-29 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 229,527 | $ 100,446 |
Accounts receivable-net | 60,212 | 59,474 |
Merchandise inventories | 593,946 | 544,227 |
Prepaid expense and other current assets | 105,723 | 97,337 |
Total current assets | 989,408 | 801,484 |
Property and equipment-net | 1,103,668 | 1,077,198 |
Operating lease right-of-use assets | 541,841 | 456,164 |
Goodwill | 141,152 | 141,100 |
Tradenames, trademarks and other intangible assets | 72,237 | 71,663 |
Deferred tax assets | 49,869 | 49,924 |
Equity method investments | 99,131 | 100,603 |
Other non-current assets | 240,011 | 200,177 |
Total assets | 3,237,317 | 2,898,313 |
Current liabilities: | ||
Accounts payable and accrued expenses | 389,411 | 424,422 |
Deferred revenue and customer deposits | 363,404 | 280,641 |
Operating lease liabilities | 72,442 | 71,524 |
Federal and state tax payable | 89,311 | 49,539 |
Other current liabilities | 101,604 | 95,506 |
Total current liabilities | 1,016,172 | 921,632 |
Non-current operating lease liabilities | 532,142 | 448,169 |
Non-current finance lease liabilities | 501,118 | 485,481 |
Other non-current obligations | 15,827 | 16,981 |
Total liabilities | 2,642,855 | 2,451,287 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock-$0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of May 1, 2021 and January 30, 2021 | ||
Common stock-$0.0001 par value per share, 180,000,000 shares authorized, 21,020,538 shares issued and outstanding as of May 1, 2021; 20,995,387 shares issued and outstanding as of January 30, 2021 | 2 | 2 |
Additional paid-in capital | 597,329 | 581,897 |
Accumulated other comprehensive income | 3,913 | 2,565 |
Accumulated deficit | (6,782) | (137,438) |
Total stockholders' equity | 594,462 | 447,026 |
Total liabilities and stockholders' equity | 3,237,317 | 2,898,313 |
Equipment promissory notes | ||
Current liabilities: | ||
Equipment promissory notes-net | 3,739 | 14,614 |
Convertible senior notes due 2023 | ||
Current liabilities: | ||
Convertible senior notes due-net | 288,136 | 282,956 |
Convertible senior notes due 2024 | ||
Current liabilities: | ||
Convertible senior notes due-net | $ 285,721 | $ 281,454 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | May 01, 2021 | Jan. 30, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 21,020,538 | 20,995,387 |
Common stock, shares outstanding | 21,020,538 | 20,995,387 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||
Net revenues | $ 860,792 | $ 482,895 |
Cost of goods sold | 453,815 | 283,241 |
Gross profit | 406,977 | 199,654 |
Selling, general and administrative expenses | 219,089 | 164,201 |
Income from operations | 187,888 | 35,453 |
Other expenses | ||
Interest expense-net | 13,308 | 19,629 |
Tradename impairment | 20,459 | |
Loss on extinguishment of debt | 105 | |
Total other expenses | 13,413 | 40,088 |
Income (loss) before income taxes | 174,475 | (4,635) |
Income tax expense (benefit) | 41,724 | (1,423) |
Income (loss) before equity method investments | 132,751 | (3,212) |
Share of equity method investments losses | (2,095) | |
Net income (loss) | $ 130,656 | $ (3,212) |
Weighted-average shares used in computing basic net income (loss) per share | 21,003,244 | 19,242,641 |
Basic net income (loss) per share | $ 6.22 | $ (0.17) |
Weighted-average shares used in computing diluted net income (loss) per share | 31,210,011 | 19,242,641 |
Diluted net income (loss) per share | $ 4.19 | $ (0.17) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) | ||
Net income (loss) | $ 130,656 | $ (3,212) |
Net gains (losses) from foreign currency translation | 1,348 | (2,372) |
Total comprehensive income (loss) | $ 132,004 | $ (5,584) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Treasury Stock | Total |
Balances at Feb. 01, 2020 | $ 2 | $ 430,662 | $ (2,760) | $ (409,253) | $ 18,651 | |
Balances, shares at Feb. 01, 2020 | 19,236,681 | |||||
Stock-based compensation | 5,721 | 5,721 | ||||
Vested and delivered restricted stock units | (381) | (381) | ||||
Vested and delivered restricted stock units, Shares | 10,286 | |||||
Exercise of stock options | 797 | 797 | ||||
Exercise of stock options, Shares | 17,760 | |||||
Repurchases of common stock | $ (72) | (72) | ||||
Repurchases of common stock, Shares | (600) | 600 | ||||
Net income (loss) | (3,212) | (3,212) | ||||
Net gains (losses) from foreign currency translation | (2,372) | (2,372) | ||||
Balances at May. 02, 2020 | $ 2 | 436,799 | (5,132) | (412,465) | $ (72) | 19,132 |
Balances, shares at May. 02, 2020 | 19,264,127 | 600 | ||||
Balances at Jan. 30, 2021 | $ 2 | 581,897 | 2,565 | (137,438) | 447,026 | |
Balances, shares at Jan. 30, 2021 | 20,995,387 | |||||
Stock-based compensation | 15,200 | 15,200 | ||||
Vested and delivered restricted stock units | (927) | (927) | ||||
Vested and delivered restricted stock units, Shares | 2,807 | |||||
Exercise of stock options | 1,393 | 1,393 | ||||
Exercise of stock options, Shares | 22,342 | |||||
Settlement of convertible senior notes | (3,514) | $ 3,280 | (234) | |||
Settlement of convertible senior notes, Shares | 7,307 | (7,305) | ||||
Exercise of call option under bond hedge upon settlement of convertible senior notes | 3,280 | $ (3,280) | ||||
Exercise of call option under bond hedge upon settlement of convertible senior notes (in shares) | (7,305) | 7,305 | ||||
Net income (loss) | 130,656 | 130,656 | ||||
Net gains (losses) from foreign currency translation | 1,348 | 1,348 | ||||
Balances at May. 01, 2021 | $ 2 | $ 597,329 | $ 3,913 | $ (6,782) | $ 594,462 | |
Balances, shares at May. 01, 2021 | 21,020,538 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 130,656 | $ (3,212) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 23,886 | 24,870 |
Non-cash operating lease cost | 16,603 | 15,907 |
Tradename impairment | 20,459 | |
Asset impairments | 4,783 | |
Amortization of debt discount | 8,670 | 12,916 |
Accretion of debt discount upon settlement of debt | (319) | |
Stock-based compensation expense | 15,307 | 5,828 |
Non-cash finance lease interest expense | 6,150 | 5,781 |
Product recalls | 500 | |
Loss on extinguishment of debt | 105 | |
Share of equity method investments losses | 2,095 | |
Other non-cash items | (1,944) | 1,145 |
Change in assets and liabilities: | ||
Accounts receivable | (722) | 1,554 |
Merchandise inventories | (49,540) | (55,837) |
Prepaid expense and other assets | (12,575) | (8,324) |
Landlord assets under construction-net of tenant allowances | (13,578) | (7,600) |
Accounts payable and accrued expenses | (32,250) | (52,989) |
Deferred revenue and customer deposits | 82,744 | 26,679 |
Other current liabilities | 41,981 | 4,696 |
Current and non-current operating lease liabilities | (19,379) | (7,065) |
Other non-current obligations | (7,515) | (6,459) |
Net cash provided by (used in) operating activities | 190,875 | (16,868) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (50,251) | (16,632) |
Equity method investments | (1,172) | |
Net cash used in investing activities | (51,423) | (16,632) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments under promissory and equipment security notes | (5,792) | (5,166) |
Repayments of convertible senior notes | (2,035) | |
Principal payments under finance leases | (3,671) | (2,068) |
Proceeds from exercise of stock options | 1,393 | 797 |
Tax withholdings related to issuance of stock-based awards | (927) | (381) |
Net cash provided by (used in) financing activities | (11,032) | 3,182 |
Effects of foreign currency exchange rate translation | 36 | (132) |
Net increase (decrease) in cash and cash equivalents and restricted cash equivalents | 128,456 | (30,450) |
Cash and cash equivalents and restricted cash equivalents | ||
Beginning of period-cash and cash equivalents | 100,446 | 47,658 |
Beginning of period-restricted cash equivalents (acquisition related escrow deposits) | 6,625 | |
Beginning of period-cash and cash equivalents | 107,071 | 47,658 |
End of period-cash and cash equivalents | 229,527 | 17,208 |
End of period-restricted cash equivalents (acquisition related escrow deposits) | 6,000 | |
End of period-cash and cash equivalents and restricted cash equivalents | 235,527 | 17,208 |
Non-cash transactions: | ||
Property and equipment additions in accounts payable and accrued expenses at period-end | 14,463 | 2,935 |
Landlord asset additions in accounts payable and accrued expenses at period-end | 33,568 | 23,489 |
Shares issued on settlement of convertible senior notes | (3,280) | |
Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes | $ 3,280 | |
Asset based credit facility | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings | 71,100 | |
Repayments | $ (61,100) |
The Company
The Company | 3 Months Ended |
May 01, 2021 | |
The Company | |
The Company | NOTE 1—THE COMPANY Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” “our” or the “Company”), is a leading luxury retailer in the home furnishings market that offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of May 1, 2021, we operated a total of 68 RH Galleries and 38 RH outlet stores in 30 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from the Company’s records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of May 1, 2021, and the results of operations for the three months ended May 1, 2021, and May 2, 2020. Our current fiscal year, which consists of 52 weeks, ends on January 29, 2022 (“fiscal 2021”). Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The preparation of our condensed consolidated financial statements in conformity with GAAP requires our senior leadership team to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the condensed consolidated financial statements. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the novel coronavirus disease (“COVID-19” or “the pandemic”) using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, intangible and other long-lived assets. Our current assessment of these estimates is included in our condensed consolidated financial statements as of and for the three months ended May 1, 2021. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our condensed consolidated financial statements in future reporting periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 (the “2020 Form 10-K”). The results of operations for the three months ended May 1, 2021, presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Our business, like the businesses of retailers generally, is subject to uncertainty surrounding the financial impact of the novel coronavirus disease as discussed in Recent Developments—COVID-19 Recent Developments—COVID-19 The COVID-19 outbreak in the first quarter of fiscal 2020 caused disruption to our business operations. In our initial response to the health crisis, we undertook immediate adjustments to our business operations including temporarily closing all of our retail locations and Restaurants, curtailing expenses, and delaying investments including scaling back some inventory orders while we assessed the status of our business. Our approach to the crisis evolved quickly as our business trends substantially improved during the second through fourth fiscal quarters of fiscal 2020 as a result of both the reopening of most of our retail locations and also strong consumer demand for our products. Operational restrictions related to the COVID-19 pandemic affecting our Galleries and hospitality locations continued to fluctuate in the first quarter of 2021 based upon changes in local conditions and regulations. As of June 4, 2021, substantially all of our Galleries, Outlets, and Restaurants were open, although many of our Restaurants and Galleries continue to conduct business with occupancy limitations and other operational restrictions. Our overall customer demand in specific markets 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 fiscal 2021, consumer spending patterns may shift away from spending on the home and home-related categories, such as home furnishings, as pandemic restrictions are lifted and consumers return to pre-COVID consumption trends, such as spending on travel and leisure and other activities. In addition, various constraints in our merchandise supply chain have resulted in some delays in our ability to convert business demand into revenues at normal historical rates. We anticipate that the backlog of orders for merchandise from our vendors, coupled with business conditions related to the pandemic, will continue to adversely affect the capacity of our vendors and supply chain to meet our merchandise demand levels during fiscal 2021. It may take several quarters for inventory receipts and manufacturing to catch up to the increase in customer demand and as a result the exact timing cannot be accurately predicted due to ongoing uncertainty of the continuing impact of the pandemic on our global supply chain. In particular, business circumstances and operational conditions in numerous international locations where our vendors operate are subject to ongoing risks, and regions in which our vendors have production facilities, such as India, have experienced various spikes in cases related to the pandemic. 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 vendors and therefore on our business as well, as including our ability to source products. 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 more information, refer to the section entitled “Risk Factors” in our 2020 Form 10-K. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 3 Months Ended |
May 01, 2021 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | NOTE 2—RECENTLY ISSUED ACCOUNTING STANDARDS New Accounting Standards or Updates Adopted Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes New Accounting Standards or Updates Not Yet Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 3 Months Ended |
May 01, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Assets | NOTE 3—PREPAID EXPENSE AND OTHER ASSETS Prepaid expense and other current assets consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Prepaid expense and other current assets $ 52,819 $ 42,079 Capitalized catalog costs 13,826 19,067 Promissory notes receivable, including interest (1) 13,816 13,569 Vendor deposits 12,689 12,519 Right of return asset for merchandise 8,173 7,453 Acquisition related escrow deposits 4,400 2,650 Total prepaid expense and other current assets $ 105,723 $ 97,337 (1) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Equity Method Investments . Other non-current assets consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Landlord assets under construction—net of tenant allowances $ 169,312 $ 135,531 Initial direct costs prior to lease commencement 41,843 36,770 Capitalized cloud computing costs—net (1) 8,547 7,254 Other deposits 7,344 5,287 Acquisition related escrow deposits 1,600 3,975 Deferred financing fees 1,256 1,525 Other non-current assets 10,109 9,835 Total other non-current assets $ 240,011 $ 200,177 (1) Presented net of accumulated amortization of $1.1 million and $0.5 million as of May 1, 2021 and January 30, 2021, respectively. |
Goodwill, Tradenames, Trademark
Goodwill, Tradenames, Trademarks and Other Intangible Assets | 3 Months Ended |
May 01, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | NOTE 4—GOODWILL, TRADENAMES, TRADEMARKS AND OTHER INTANGIBLE ASSETS The following sets forth the goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks (See Note 17— Segment Reporting (in thousands) FOREIGN JANUARY 30, CURRENCY MAY 1, 2021 ADDITIONS TRANSLATION 2021 RH Segment Goodwill $ 141,100 $ — $ 52 $ 141,152 Tradenames, trademarks and other intangible assets 54,663 574 — 55,237 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. Waterworks Tradename Impairment During the first quarter of fiscal 2020, as a result of the COVID-19 health crisis and related Showroom closures and slowdown in construction activity, management updated the long-term financial projections for the Waterworks reporting unit which resulted in a significant decrease in forecasted revenues and profitability. We performed an interim impairment test on the Waterworks tradename and the estimated future cash flows of the Waterworks reporting unit indicated the fair value of the tradename asset was below its carrying amount. We determined fair value utilizing a discounted cash flow methodology under the relief-from-royalty method. Significant assumptions under this method include forecasted net revenues and the estimated royalty rate, expressed as a percentage of revenues, in addition to the discount rate based on the weighted-average cost of capital. Based on the impairment test performed, we concluded that the Waterworks reporting unit tradename was impaired as of May 2, 2020. As a result, we recognized a $20.5 million non-cash impairment charge for the Waterworks reporting unit tradename during the three months ended May 2, 2020 . |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
May 01, 2021 | |
Equity Method Investments. | |
Equity Method Investments | NOTE 5—EQUITY METHOD INVESTMENTS Equity method investments represent our 50 percent membership interests in three privately-held limited liability companies in Aspen (each, an “Aspen LLC” and collectively, the “Aspen LLCs” or the “equity method investments”) which were formed during fiscal 2020, and have the purpose of acquiring, developing, operating and selling certain real estate projects in Aspen, Colorado. As we do not have a controlling financial interest in the Aspen LLCs but have the ability to exercise significant influence over the Aspen LLCs, we account for these investments using the equity method of accounting. During the three months ended May 1, 2021, we recorded our proportionate share of equity method investments losses of $2.1 million, which is included in the condensed consolidated statements of operations and a corresponding decrease to the carrying value of equity method investments As of May 1, 2021, $13.8 million of promissory notes receivable are outstanding with the managing member, which are included in prepaid expense and other current assets An affiliate of the managing member of the Aspen LLCs became the landlord of an additional RH Design Gallery in the first quarter of fiscal 2021. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 3 Months Ended |
May 01, 2021 | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 6—ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable and accrued expenses consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Accounts payable $ 231,901 $ 224,906 Accrued compensation 49,503 84,860 Accrued freight and duty 33,698 29,754 Accrued sales taxes 25,474 23,706 Accrued occupancy 21,252 17,671 Accrued catalog costs 6,460 4,354 Accrued professional fees 4,532 5,383 Deferred consideration for asset purchase — 14,387 Other accrued expenses 16,591 19,401 Total accounts payable and accrued expenses $ 389,411 $ 424,422 Other current liabilities consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Allowance for sales returns $ 28,649 $ 25,559 Current portion of equipment promissory notes 28,067 22,747 Unredeemed gift card and merchandise credit liability 18,574 19,173 Finance lease liabilities 15,322 14,671 Product recall reserve 7,012 8,181 Other current liabilities 3,980 5,175 Total other current liabilities $ 101,604 $ 95,506 Contract Liabilities We defer revenue associated with merchandise delivered via the home-delivery channel. We expect that substantially all of the deferred revenue and customer deposits as of May 1, 2021 will be recognized within the next six months as the performance obligations are satisfied. New membership fees are recorded as deferred revenue when collected from customers and recognized as revenue based on expected product revenues over the annual membership period, based on historical trends of sales to members. Membership renewal fees are recorded as deferred revenue when collected from customers and are recognized as revenue on a straight-line basis over the membership period, or one year. In addition, we defer revenue when cash payments are received in advance of performance for unsatisfied obligations related to our gift cards. During the three months ended May 1, 2021 and May 2, 2020, we recognized $4.9 million and $4.1 million, respectively, of revenue . During the three months ended May 1, 2021 and May 2, 2020, we recognized gift card breakage of $0.4 million and $0.6 million, respectively. We expect that approximately 75% of the remaining gift card liabilities as of May 1, 2021 will be recognized when the gift cards are redeemed by customers. |
Other Non-Current Obligations
Other Non-Current Obligations | 3 Months Ended |
May 01, 2021 | |
Other Non-Current Obligations. | |
Other Non-Current Obligations | NOTE 7—OTHER NON-CURRENT OBLIGATIONS Other non-current obligations consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Deferred payroll taxes $ 4,461 $ 4,461 Rollover units and profit interests (1) 3,597 3,490 Unrecognized tax benefits 3,324 3,114 Other non-current obligations 4,445 5,916 Total other non-current obligations $ 15,827 $ 16,981 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 15 — Stock-Based Compensation . . |
Leases
Leases | 3 Months Ended |
May 01, 2021 | |
Leases | |
Leases | NOTE 8—LEASES Lease costs—net consist of the following ( in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Operating lease cost (1) $ 23,567 $ 20,726 Finance lease costs Amortization of leased assets (1) 10,918 9,588 Interest on lease liabilities (2) 6,150 5,781 Variable lease costs (3) 8,427 3,560 Sublease income (4) (1,182) (2,575) Total lease costs—net $ 47,880 $ 37,080 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of operations based on our accounting policy. Refer to Note 3— Significant Accounting Policies in the 2020 Form 10-K. (2) Included in interest expense—net on the condensed consolidated statements of operations. (3) Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $6.3 million and $2.0 million for the three months ended May 1, 2021 and May 2, 2020, respectively, as well as charges associated with common area maintenance of $2.1 million and $1.6 million for the three months ended May 1, 2021 and May 2, 2020, 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 any period. (4) Included in selling, general and administrative expenses on the condensed consolidated statements of operations. Lease right-of-use assets and lease liabilities consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 541,841 $ 456,164 Finance leases (1)(2) Property and equipment—net 718,001 711,804 Total lease right-of-use assets $ 1,259,842 $ 1,167,968 Liabilities Current (3) Operating leases Operating lease liabilities $ 72,442 $ 71,524 Finance leases Other current liabilities 15,322 14,671 Total lease liabilities—current 87,764 86,195 Non-current Operating leases Non-current operating lease liabilities 532,142 448,169 Finance leases Non-current finance lease liabilities 501,118 485,481 Total lease liabilities—non-current 1,033,260 933,650 Total lease liabilities $ 1,121,024 $ 1,019,845 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $144.0 million and $133.0 million as of May 1, 2021 and January 30, 2021, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. The maturities of lease liabilities are as follows as of May 1, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL Remainder of fiscal 2021 $ 72,017 $ 29,966 $ 101,983 2022 88,706 40,352 129,058 2023 80,696 40,771 121,467 2024 74,575 41,169 115,744 2025 74,475 42,385 116,860 2026 71,741 43,164 114,905 Thereafter 276,516 575,649 852,165 Total lease payments (1)(2) 738,726 813,456 1,552,182 Less—imputed interest (3) (134,142) (297,016) (431,158) Present value of lease liabilities $ 604,584 $ 516,440 $ 1,121,024 (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 $667.4 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of May 1, 2021, of which $24.1 million, $32.5 million, $37.3 million, $38.7 million, $40.0 million and $39.8 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $455.0 million will be paid subsequent to fiscal 2026. (2) Excludes future commitments under short-term lease agreements of $1.8 million as of May 1, 2021. (3) Calculated using the discount rate for each lease at lease commencement. Supplemental information related to leases consists of the following: THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Weighted-average remaining lease term (years) Operating leases 9.5 8.7 Finance leases 18.2 18.4 Weighted-average discount rate Operating leases 4.00% 3.82% Finance leases 4.99% 5.25% Other information related to leases consists of the following (in thousands): THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (25,456) $ (10,786) Operating cash flows from finance leases (6,253) (2,437) Financing cash flows from finance leases (3,671) (2,068) Total cash outflows from leases $ (35,380) $ (15,291) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 103,088 $ 1,198 Finance leases 19,611 58 Long-lived Asset Impairment During the three months ended May 2, 2020, we recognized long-lived asset impairment charges of $3.5 million related to one RH Baby & Child and TEEN Gallery and one Waterworks showroom, comprised of lease right-of-use asset impairment of $2.0 million and property and equipment impairment of $1.5 million. |
Convertible Senior Notes
Convertible Senior Notes | 3 Months Ended |
May 01, 2021 | |
Debt Disclosure | |
Convertible Senior Notes | NOTE 9—CONVERTIBLE SENIOR NOTES $350 million 0.00% Convertible Senior Notes due 2024 In September 2019 September 15, 2024 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 June 15, 2024 We may not redeem the 2024 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require us to purchase all or a portion of their 2024 Notes for cash at a price equal to 100% of the principal amount of the 2024 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2024 Notes, we separated the 2024 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2024 Notes and the fair value of the liability component of the 2024 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 5.74% over the expected life of the 2024 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2024 Notes were comprised of discounts upon original issuance of $3.5 million and third party offering costs of $1.3 million. In accounting for the debt issuance costs related to the issuance of the 2024 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2024 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2024 The carrying values of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (61,720) (65,818) Net carrying amount $ 288,280 $ 284,182 Equity component (1) $ 87,252 $ 87,252 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. We recorded interest expense of $4.1 million and $3.9 million for the amortization of the debt discount related to the 2024 Notes during the three months ended May 1, 2021 and May 2, 2020, respectively. 2024 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2024 Notes and exercise of the overallotment option in September 2019 additional paid-in capital We recorded a deferred tax liability of $21.7 million in connection with the debt discount associated with the 2024 Notes and recorded a deferred tax asset of $22.7 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets $335 million 0.00% Convertible Senior Notes due 2023 In June 2018 June 15, 2023 The initial conversion rate applicable to the 2023 Notes is 5.1640 shares of common stock per $1,000 principal amount of 2023 Notes, which is equivalent to an initial conversion price of approximately $193.65 per share. The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a “make-whole fundamental change” as defined in the indenture governing the 2023 Notes, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2023 Notes in connection with such make-whole fundamental change. Prior to March 15, 2023, the 2023 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after September 30, 2018, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $1,000 principal amount of 2023 Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day; or (3) upon the occurrence of specified corporate transactions. The first condition was satisfied from the calendar quarter ended September 30, 2020 through the calendar quarter ended March 31, 2021 and, accordingly, holders were eligible to convert their 2023 Notes beginning in the calendar quarter ended December 31, 2020 and are currently eligible to convert their 2023 Notes during the calendar quarter ending June 30, 2021. On and after March 15, 2023 We may not redeem the 2023 Notes; however, upon the occurrence of a fundamental change (as defined in the indenture governing the notes), holders may require us to purchase all or a portion of their 2023 Notes for cash at a price equal to 100% of the principal amount of the 2023 Notes to be purchased plus any accrued and unpaid special interest to, but excluding, the fundamental change purchase date. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability and equity components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, in accounting for the issuance of the 2023 Notes, we separated the 2023 Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, which is recognized as a debt discount, represents the difference between the proceeds from the issuance of the 2023 Notes and the fair value of the liability component of the 2023 Notes. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) will be amortized to interest expense using an effective interest rate of 6.35% over the expected life of the 2023 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. Debt issuance costs related to the 2023 Notes were comprised of discounts upon original issuance of $1.7 million and third party offering costs of $4.6 million. In accounting for the debt issuance costs related to the issuance of the 2023 Notes, we allocated the total amount incurred to the liability and equity components based on their relative values. Debt issuance costs attributable to the liability component are amortized to interest expense using the effective interest method over the expected life of the 2023 Notes, and debt issuance costs attributable to the equity component are netted with the equity component in stockholders’ equity. Discounts and third party offering costs attributable to the liability component are recorded as a contra-liability and are presented net against the convertible senior notes due 2023 In December 2020, holders of $2.4 million in aggregate principal amount of the 2023 Notes elected conversion at the option of the noteholders. During the three months ended May 1, 2021, we paid $2.4 million in cash and delivered 7,307 shares of common stock to settle the converted 2023 Notes. As a result, we recognized a loss on extinguishment of the liability component of $0.1 million in the three months ended May 1, 2021. We also received 7,305 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below, and therefore, on a net basis issued 2 shares of our common stock in respect to such settlement of the converted 2023 Notes. In May 2021, holders of $30.8 million in aggregate principal amount of the 2023 Notes elected conversion at the option of the noteholders. During the second quarter of fiscal 2021, we expect to pay $30.8 million in cash and to deliver an immaterial number of shares of common stock to settle the converted 2023 Notes, net of the shares of common stock we expect to receive from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes as described below. The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 Liability component Principal $ 332,644 $ 335,000 Less: Debt discount (42,171) (47,064) Net carrying amount $ 290,473 $ 287,936 Equity component (1) $ 90,756 $ 90,990 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. We recorded interest expense of $4.6 million and $4.3 million for the amortization of the debt discount related to the 2023 Notes during the three months ended May 1, 2021 and May 2, 2020, respectively. 2023 Notes—Convertible Bond Hedge and Warrant Transactions In connection with the offering of the 2023 Notes and exercise of the overallotment option in June 2018 additional paid-in capital We recorded a deferred tax liability of $22.3 million in connection with the debt discount associated with the 2023 Notes and recorded a deferred tax asset of $22.5 million in connection with the convertible note hedge transactions. The deferred tax liability and deferred tax asset are recorded in deferred tax assets |
Credit Facilities
Credit Facilities | 3 Months Ended |
May 01, 2021 | |
Debt Disclosure | |
Credit Facilities | NOTE 10—CREDIT FACILITIES The outstanding balances under our credit facilities were as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 31,942 (136) 31,806 37,532 (171) 37,361 Total credit facilities $ 31,942 $ (136) $ 31,806 $ 37,532 $ (171) $ 37,361 (1) Deferred financing fees associated with the asset based credit facility as of May 1, 2021 and January 30, 2021 were $1.3 million and $1.5 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets. The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit, 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 $28.1 million outstanding was included in other current liabilities on the condensed consolidated balance sheets as of May 1, 2021. The remaining $3.8 million outstanding, included in equipment promissory notes — net on the condensed consolidated balance sheets, has principal payments due of $2.6 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. Asset Based Credit Facility 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. 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. 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, amends 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 the Company’s 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 May 1, 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 May 1, 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 May 1, 2021 was $285.6 million, net of $20.1 million in outstanding letters of credit. Equipment Loan Facility On September 5, 2017, Restoration Hardware, Inc. entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC (“BAL”) pursuant to which BAL and we agreed that BAL would finance certain equipment of ours from time to time, with each such equipment financing to be evidenced by an equipment security note setting forth the terms for each particular equipment loan. Each equipment loan is secured by a purchase money security interest in the financed equipment. As of May 1, 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 | 3 Months Ended |
May 01, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 11—FAIR VALUE MEASUREMENTS Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. In determining the fair value, we utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs of the valuation technique. The degree of judgment used in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument, whether the financial instrument is new to the market and not yet established and the characteristics specific to the transaction. Financial instruments with readily available active quoted prices for which fair value can be measured generally will have a higher degree of pricing observability and a lesser degree of judgment used in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment used in measuring fair value. Our financial assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: Level 1—Quoted prices are available in active markets for identical investments as of the reporting date. Level 2—Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Level 3—Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment. The inputs used in the determination of fair value require significant management judgment or estimation. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair Value Measurements—Recurring Amounts reported as cash and equivalents, 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 2023 Notes and 2024 Notes are as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2023 $ 325,556 $ 290,473 $ 301,794 $ 287,936 Convertible senior notes due 2024 307,193 288,280 286,161 284,182 (1) Carrying value represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. The fair value of each of the 2023 Notes and 2024 Notes was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the trading price of our convertible notes, when available, our common stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2). Fair Value Measurements—Non-Recurring The fair value of the Waterworks reporting unit tradename was determined based on unobservable (Level 3) inputs and valuation techniques, as discussed in Note 4— Goodwill, Tradenames, Trademarks and Other Intangible Assets The fair value of the acquired goodwill and tradename associated with acquisitions by the RH Segment in fiscal 2020 were determined based on unobservable (Level 3) inputs and valuation techniques. The fair value of the real estate assets associated with our investment in the Aspen LLCs in fiscal 2020, as discussed in Note 5— Equity Method Investments |
Income Taxes
Income Taxes | 3 Months Ended |
May 01, 2021 | |
Income Taxes | |
Income Taxes | NOTE 12—INCOME TAXES We recorded income tax expense of $41.7 million and an income tax benefit of $1.4 million in the three months ended May 1, 2021 and May 2, 2020, respectively. The effective tax rate was 24.2% and 30.7% for the three months ended May 1, 2021 and May 2, 2020, respectively. The decrease in the effective tax rate for the three months ended May 1, 2021 as compared to the three months ended May 2, 2020 is attributable to higher net excess tax benefits from stock-based compensation and income reported in the current period compared to a reported loss in the prior year. As of May 1, 2021, we had $8.6 million of unrecognized tax benefits, of which $7.8 million would reduce income tax expense and the effective tax rate, if recognized. The remaining unrecognized tax benefits would offset other deferred tax assets, if recognized. As of May 1, 2021, we had $6.2 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
May 01, 2021 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | NOTE 13—NET INCOME (LOSS) PER SHARE The weighted-average shares used for net income (loss) per share are presented in the table below. As we reported a net loss for the three months ended May 2, 2020, the weighted-average shares outstanding for basic and diluted are the same. THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Weighted-average shares—basic 21,003,244 19,242,641 Effect of dilutive stock-based awards 6,716,485 — Effect of dilutive convertible senior notes (1) 3,490,282 — Weighted-average shares—diluted 31,210,011 19,242,641 (1) The $300 million aggregate principal amount of convertible senior notes that were issued in June and July 2015 (the “2020 Notes”), the 2023 Notes and the 2024 Notes would have an impact on our dilutive share count beginning at stock prices at or above $118.13 per share, $193.65 per share and $211.40 per share, respectively . The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices at or above $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2020 Notes expired on January 7, 2021. While the share price for our common stock trades above the applicable conversion price of each series of notes or the applicable exercise price of each series of warrants for the notes, these instruments will have a dilutive effect with respect to our common stock to the extent that the price per share of our common stock continues to exceed the applicable conversion or exercise price of the notes and warrants. Refer to Note 9— Convertible Senior Notes . The following number of dilutive options, restricted stock units and convertible senior notes were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been anti-dilutive: THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Options 55,273 4,436,083 Restricted stock units — 177,312 Convertible senior notes — 589,095 Total anti-dilutive stock-based awards 55,273 5,202,490 |
Share Repurchase Program
Share Repurchase Program | 3 Months Ended |
May 01, 2021 | |
Share Repurchase Program. | |
Share Repurchase Program | NOTE 14—SHARE REPURCHASE PROGRAM In 2018, our Board of Directors authorized a share repurchase program. In fiscal 2018, we repurchased approximately 2.0 million shares of our common stock under this share repurchase program at an average price of $122.10 per share, for an aggregate repurchase amount of approximately $250.0 million. In fiscal 2019, we repurchased approximately 2.2 million shares of our common stock under this program at an average price of $115.36 per share, for an aggregate repurchase amount of approximately $250.0 million. We did not make any repurchases under this program during either the three months ended May 1, 2021 or May 2, 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 May 1, 2021 for future share investments under this share repurchase program. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
May 01, 2021 | |
Stock-Based Compensation. | |
Stock-Based Compensation | NOTE 15—STOCK-BASED COMPENSATION We recorded stock-based compensation expense of $15.3 million and $5.8 million during the three months ended May 1, 2021 and May 2, 2020, respectively, which is included in selling, general and administrative expenses condensed consolidated statements of operations. No stock-based compensation cost has been capitalized in the accompanying condensed 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. See Note 18— Stock-Based Compensation The option contains selling restrictions on the underlying shares that lapse upon the achievement of both time-based service requirements and stock price performance-based metrics as described further below. The option is fully vested on the date of grant but the shares underlying the option remain subject to transfer restrictions to the extent the performance-based and time-based requirements have not been met. The option will result in aggregate non-cash stock compensation expense of $173.6 million, of which $5.9 million was recognized during the three months ended May 1, 2021 (which is included in the stock-based compensation expense recorded during the three months ended May 1, 2021 noted above). As of May 1, 2021, the total unrecognized compensation expense was $50.7 million, which will be recognized on an accelerated basis through May 2025. 2012 Stock Incentive Plan and 2012 Stock Option Plan As of May 1, 2021, 8,508,074 options were outstanding with a weighted-average exercise price of $106.07 per share and 6,780,119 options were vested with a weighted-average exercise price of $89.33 per share. The aggregate intrinsic value of options outstanding, options vested or expected to vest, and options exercisable as of May 1, 2021 was $4,951.3 million, $4,755.8 million, and $4,059.2 million, respectively. Stock options exercisable as of May 1, 2021 had a weighted-average remaining contractual life of 3.66 years. As of May 1, 2021, the total unrecognized compensation expense related to unvested options was $114.7 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 4.68 years. In addition, as of May 1, 2021, the total unrecognized compensation expense related to the fully vested option grant made to Mr. Friedman in October 2020 was $50.7 million, which will be recognized on an accelerated basis through May 2025 (refer to Chairman and Chief Executive Officer Option Grant As of May 1, 2021, we had 89,830 restricted stock units outstanding with a weighted-average grant date fair value of $73.51 per share. During the three months ended May 1, 2021, 4,420 restricted stock units vested with a weighted-average grant date fair value of $51.23 per share. As of May 1, 2021, there was $2.8 million of total unrecognized compensation expense related to unvested restricted stock and restricted stock units which is expected to be recognized over a weighted-average period of 0.68 years. Rollover Units In connection with the acquisition of Waterworks in May 2016, $1.5 million rollover units in the Waterworks subsidiary (the “Rollover Units”) were recorded as part of the transaction. The Rollover Units are subject to the terms of the Waterworks LLC agreement, including redemption rights at an amount equal to the greater of (i) the $1.5 million remitted as consideration in the business combination or (ii) an amount based on the percentage interest represented in the overall valuation of the Waterworks subsidiary (the “Appreciation Rights”). The Appreciation Rights are measured at fair value and are subject to fair value measurements during the expected life of the Rollover Units, with changes to fair value recorded in the condensed consolidated statements of operations. The fair value of the Appreciation Rights is determined based on an option-pricing model (“OPM”). We did not record any expense related to the Appreciation Rights during either the three months ended May 1, 2021 or May 2, 2020. As of both May 1, 2021 and January 30, 2021, the liability associated with the Rollover Units and related Appreciation Rights was $1.5 million, which is included in other non-current obligations Profit Interests In connection with the acquisition of Waterworks in May 2016, profit interests units in the Waterworks subsidiary (the “Profit Interests”) were issued to certain Waterworks associates. The Profit Interests are measured at their grant date fair value and expensed on a straight-line basis over their expected life, or five years. The Profit Interests are subject to fair value measurements during their expected life, with changes to fair value recorded in the condensed consolidated statements of operations. The fair value of the Profit Interests is determined based on an OPM. For both the three months ended May 1, 2021 and May 2, 2020, we recorded $0.1 million related to the Profit Interests, which is included in selling, general and administrative expenses January 30, 2021, the liability associated with the Profit Interests was $2.1 million and $2.0 million, respectively, which is included in other non-current obligations |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
May 01, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | NOTE 16—COMMITMENTS AND CONTINGENCIES Commitments We had no material off balance sheet commitments as of May 1, 2021. Contingencies We are involved in lawsuits, claims, investigations and other legal proceedings incident to the ordinary course of our business. These disputes are increasing in number as the business expands and we grow larger. Litigation is inherently unpredictable. As a result, the outcome of matters in which we are involved could result in unexpected expenses and liability that could adversely affect our operations. In addition, any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of our senior leadership team’s time and result in the diversion of significant operational resources. We review the need for any loss contingency reserves and establish reserves when, in the opinion of our senior leadership team, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. Generally, in view of the inherent difficulty of predicting the outcome of those matters, particularly in cases in which claimants seek substantial or indeterminate damages, it is not possible to determine whether a liability has been incurred or to reasonably estimate the ultimate or minimum amount of that liability until the case is close to resolution, in which case no reserve is established until that time. When and to the extent that we do establish a reserve, there can be no assurance that any such recorded liability for estimated losses will be for the appropriate amount, and actual losses could be higher or lower than what we accrue from time to time. Although we believe that the ultimate resolution of our current legal proceedings will not have a material adverse effect on our condensed consolidated financial statements, the outcome of legal matters is subject to inherent uncertainty. |
Segment Reporting
Segment Reporting | 3 Months Ended |
May 01, 2021 | |
Segment Reporting | |
Segment Reporting | NOTE 17—SEGMENT REPORTING We define reportable and operating segments on the same basis that we use to evaluate our performance internally by the Chief Operating Decision Maker (the “CODM”), which we have determined is our Chief Executive Officer. We have three operating segments: RH Segment, Waterworks and Real Estate Development. The RH Segment and Waterworks operating segments (the “retail operating segments”) include all sales channels accessed by our customers, including sales through retail locations and outlets, websites, Source Books, and the commercial channel. The Real Estate Development segment represents operations associated with our equity method investments entered into in fiscal 2020, as described in Note 5— Equity Method Investments The retail operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared senior leadership team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. We use operating income to evaluate segment profitability for the retail operating segments. Operating income is defined as net income (loss) before interest expense—net, tradename impairment, loss on extinguishment of debt, income tax expense (benefit) and our share of equity method investments losses. Segment Information The following table presents the statements of operations metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 819,823 $ 40,969 $ 860,792 $ 454,957 $ 27,938 $ 482,895 Gross profit 386,553 20,424 406,977 187,762 11,892 199,654 Depreciation and amortization 22,680 1,206 23,886 23,717 1,153 24,870 In the three months ended May 1, 2021, the Real Estate Development segment share of equity method investments losses was $2.1 million. The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting in thousands MAY 1, JANUARY 30, 2021 2021 REAL ESTATE REAL ESTATE RH SEGMENT WATERWORKS DEVELOPMENT TOTAL RH SEGMENT WATERWORKS DEVELOPMENT TOTAL Goodwill (1) $ 141,152 $ — $ — $ 141,152 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 55,237 17,000 — 72,237 54,663 17,000 — 71,663 Equity method investments — — 99,131 99,131 — — 100,603 100,603 Total assets 2,992,647 145,539 99,131 3,237,317 2,659,944 137,766 100,603 2,898,313 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of 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, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. We use segment operating income to evaluate segment performance and allocate resources. Segment operating income excludes (i) non-cash compensation amortization related to the fully vested option grant made to Mr. Friedman in October 2020, (ii) product recall accruals and adjustments, (iii) asset impairments and changes in useful lives and (iv) severance costs associated with reorganizations. 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 segment operating income (loss) and income (loss) before income taxes ( in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Operating income (loss): RH Segment $ 188,010 $ 49,517 Waterworks 6,242 (1,450) Non-cash compensation (5,864) — Recall accrual (500) — Asset impairments and change in useful lives — (8,471) Reorganization related costs — (4,143) Income from operations 187,888 35,453 Interest expense—net 13,308 19,629 Loss on extinguishment of debt 105 — Tradename impairment — 20,459 Income (loss) before income taxes $ 174,475 $ (4,635) We classify our sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor. Net revenues in each category were as follows ( in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Furniture $ 580,011 $ 312,523 Non-furniture 280,781 170,372 Total net revenues $ 860,792 $ 482,895 During the third quarter of 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 May 1, 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 the three months ended May 1, 2021 or May 2, 2020. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
May 01, 2021 | |
The Company | |
Nature of Business | Nature of Business RH, a Delaware corporation, together with its subsidiaries (collectively, “we,” “us,” “our” or the “Company”), is a leading luxury retailer in the home furnishings market that offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and child and teen furnishings. These products are sold through our retail locations, websites and Source Books. As of May 1, 2021, we operated a total of 68 RH Galleries and 38 RH outlet stores in 30 states, the District of Columbia and Canada, as well as 14 Waterworks Showrooms throughout the United States and in the U.K., and had sourcing operations in Shanghai and Hong Kong. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared from the Company’s records and, in our senior leadership team’s opinion, include all adjustments, consisting of normal recurring adjustments, necessary to fairly state our financial position as of May 1, 2021, and the results of operations for the three months ended May 1, 2021, and May 2, 2020. Our current fiscal year, which consists of 52 weeks, ends on January 29, 2022 (“fiscal 2021”). Certain information and disclosures normally included in the notes to annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) have been condensed or omitted for purposes of these interim condensed consolidated financial statements. The preparation of our condensed consolidated financial statements in conformity with GAAP requires our senior leadership team to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences could be material to the condensed consolidated financial statements. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the novel coronavirus disease (“COVID-19” or “the pandemic”) using information that is reasonably available to us at this time. The accounting estimates and other matters we have assessed include, but were not limited to, sales return reserve, inventory reserve, allowance for doubtful accounts, goodwill, intangible and other long-lived assets. Our current assessment of these estimates is included in our condensed consolidated financial statements as of and for the three months ended May 1, 2021. As additional information becomes available to us, our future assessment of these estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our condensed consolidated financial statements in future reporting periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021 (the “2020 Form 10-K”). The results of operations for the three months ended May 1, 2021, presented herein are not necessarily indicative of the results to be expected for the full fiscal year. Our business, like the businesses of retailers generally, is subject to uncertainty surrounding the financial impact of the novel coronavirus disease as discussed in Recent Developments—COVID-19 |
Recently Issued Accounting Standards | New Accounting Standards or Updates Adopted Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes New Accounting Standards or Updates Not Yet Adopted Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU 2020-06—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Prepaid Expense and Other Ass_2
Prepaid Expense and Other Assets (Tables) | 3 Months Ended |
May 01, 2021 | |
Prepaid Expense and Other Assets | |
Prepaid Expense and Other Current Assets | Prepaid expense and other current assets consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Prepaid expense and other current assets $ 52,819 $ 42,079 Capitalized catalog costs 13,826 19,067 Promissory notes receivable, including interest (1) 13,816 13,569 Vendor deposits 12,689 12,519 Right of return asset for merchandise 8,173 7,453 Acquisition related escrow deposits 4,400 2,650 Total prepaid expense and other current assets $ 105,723 $ 97,337 (1) Represents promissory notes, including principal and accrued interest, due from a related party. Refer to Note 5— Equity Method Investments . |
Schedule of Other Non-Current Assets | Other non-current assets consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Landlord assets under construction—net of tenant allowances $ 169,312 $ 135,531 Initial direct costs prior to lease commencement 41,843 36,770 Capitalized cloud computing costs—net (1) 8,547 7,254 Other deposits 7,344 5,287 Acquisition related escrow deposits 1,600 3,975 Deferred financing fees 1,256 1,525 Other non-current assets 10,109 9,835 Total other non-current assets $ 240,011 $ 200,177 (1) Presented net of accumulated amortization of $1.1 million and $0.5 million as of May 1, 2021 and January 30, 2021, respectively. |
Goodwill, Tradenames, Tradema_2
Goodwill, Tradenames, Trademarks and Other Intangible Assets (Tables) | 3 Months Ended |
May 01, 2021 | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | |
Goodwill, Tradenames, Trademarks and Other Intangible Assets | The following sets forth the goodwill, tradenames, trademarks and other intangible assets activity for the RH Segment and Waterworks (See Note 17— Segment Reporting (in thousands) FOREIGN JANUARY 30, CURRENCY MAY 1, 2021 ADDITIONS TRANSLATION 2021 RH Segment Goodwill $ 141,100 $ — $ 52 $ 141,152 Tradenames, trademarks and other intangible assets 54,663 574 — 55,237 Waterworks (1) Tradename (2) 17,000 — — 17,000 (1) Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, with $17.4 million and $33.7 million of impairment recorded in fiscal 2018 and fiscal 2017, respectively. (2) Presented net of an impairment charge of $35.1 million, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
May 01, 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 MAY 1, JANUARY 30, 2021 2021 Accounts payable $ 231,901 $ 224,906 Accrued compensation 49,503 84,860 Accrued freight and duty 33,698 29,754 Accrued sales taxes 25,474 23,706 Accrued occupancy 21,252 17,671 Accrued catalog costs 6,460 4,354 Accrued professional fees 4,532 5,383 Deferred consideration for asset purchase — 14,387 Other accrued expenses 16,591 19,401 Total accounts payable and accrued expenses $ 389,411 $ 424,422 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Allowance for sales returns $ 28,649 $ 25,559 Current portion of equipment promissory notes 28,067 22,747 Unredeemed gift card and merchandise credit liability 18,574 19,173 Finance lease liabilities 15,322 14,671 Product recall reserve 7,012 8,181 Other current liabilities 3,980 5,175 Total other current liabilities $ 101,604 $ 95,506 |
Other Non-Current Obligations (
Other Non-Current Obligations (Tables) | 3 Months Ended |
May 01, 2021 | |
Other Non-Current Obligations. | |
Schedule of Other Non-Current Obligations | Other non-current obligations consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Deferred payroll taxes $ 4,461 $ 4,461 Rollover units and profit interests (1) 3,597 3,490 Unrecognized tax benefits 3,324 3,114 Other non-current obligations 4,445 5,916 Total other non-current obligations $ 15,827 $ 16,981 (1) Represents rollover units and profit interests associated with the acquisition of Waterworks. Refer to Note 15 — Stock-Based Compensation . |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
May 01, 2021 | |
Leases | |
Summary of Lease Costs-Net | Lease costs—net consist of the following ( in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Operating lease cost (1) $ 23,567 $ 20,726 Finance lease costs Amortization of leased assets (1) 10,918 9,588 Interest on lease liabilities (2) 6,150 5,781 Variable lease costs (3) 8,427 3,560 Sublease income (4) (1,182) (2,575) Total lease costs—net $ 47,880 $ 37,080 (1) Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of operations based on our accounting policy. Refer to Note 3— Significant Accounting Policies in the 2020 Form 10-K. (2) Included in interest expense—net on the condensed consolidated statements of operations. (3) Represents variable lease payments under operating and finance lease agreements. The amounts primarily represent contingent rent based on a percentage of retail sales over contractual levels of $6.3 million and $2.0 million for the three months ended May 1, 2021 and May 2, 2020, respectively, as well as charges associated with common area maintenance of $2.1 million and $1.6 million for the three months ended May 1, 2021 and May 2, 2020, 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 any period. (4) Included in selling, general and administrative expenses on the condensed consolidated statements of operations. |
Summary of Lease Right-of-use Assets and Lease Liabilities | Lease right-of-use assets and lease liabilities consist of the following ( in thousands MAY 1, JANUARY 30, 2021 2021 Balance Sheet Classification Assets Operating leases Operating lease right-of-use assets $ 541,841 $ 456,164 Finance leases (1)(2) Property and equipment—net 718,001 711,804 Total lease right-of-use assets $ 1,259,842 $ 1,167,968 Liabilities Current (3) Operating leases Operating lease liabilities $ 72,442 $ 71,524 Finance leases Other current liabilities 15,322 14,671 Total lease liabilities—current 87,764 86,195 Non-current Operating leases Non-current operating lease liabilities 532,142 448,169 Finance leases Non-current finance lease liabilities 501,118 485,481 Total lease liabilities—non-current 1,033,260 933,650 Total lease liabilities $ 1,121,024 $ 1,019,845 (1) Finance lease right-of-use assets include capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement. (2) Finance lease right-of-use assets are recorded net of accumulated amortization of $144.0 million and $133.0 million as of May 1, 2021 and January 30, 2021, respectively. (3) Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months. |
Summary of Maturities of Lease Liabilities | The maturities of lease liabilities are as follows as of May 1, 2021 ( in thousands OPERATING FINANCE FISCAL YEAR LEASES LEASES TOTAL Remainder of fiscal 2021 $ 72,017 $ 29,966 $ 101,983 2022 88,706 40,352 129,058 2023 80,696 40,771 121,467 2024 74,575 41,169 115,744 2025 74,475 42,385 116,860 2026 71,741 43,164 114,905 Thereafter 276,516 575,649 852,165 Total lease payments (1)(2) 738,726 813,456 1,552,182 Less—imputed interest (3) (134,142) (297,016) (431,158) Present value of lease liabilities $ 604,584 $ 516,440 $ 1,121,024 (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 $667.4 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of May 1, 2021, of which $24.1 million, $32.5 million, $37.3 million, $38.7 million, $40.0 million and $39.8 million will be paid in fiscal 2021, fiscal 2022, fiscal 2023, fiscal 2024, fiscal 2025 and fiscal 2026, respectively, and $455.0 million will be paid subsequent to fiscal 2026. (2) Excludes future commitments under short-term lease agreements of $1.8 million as of May 1, 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: THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Weighted-average remaining lease term (years) Operating leases 9.5 8.7 Finance leases 18.2 18.4 Weighted-average discount rate Operating leases 4.00% 3.82% Finance leases 4.99% 5.25% |
Summary of Other Information Related to Leases | Other information related to leases consists of the following (in thousands): THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (25,456) $ (10,786) Operating cash flows from finance leases (6,253) (2,437) Financing cash flows from finance leases (3,671) (2,068) Total cash outflows from leases $ (35,380) $ (15,291) Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations (non-cash) Operating leases $ 103,088 $ 1,198 Finance leases 19,611 58 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 3 Months Ended |
May 01, 2021 | |
Convertible senior notes due 2024 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying values of the 2024 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 Liability component Principal $ 350,000 $ 350,000 Less: Debt discount (61,720) (65,818) Net carrying amount $ 288,280 $ 284,182 Equity component (1) $ 87,252 $ 87,252 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. |
Convertible senior notes due 2023 | |
Carrying Values of Notes Excluding the Discounts upon Original Issuance and Third Party Offering Costs | The carrying values of the 2023 Notes, excluding the discounts upon original issuance and third party offering costs, are as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 Liability component Principal $ 332,644 $ 335,000 Less: Debt discount (42,171) (47,064) Net carrying amount $ 290,473 $ 287,936 Equity component (1) $ 90,756 $ 90,990 (1) Included in additional paid-in capital on the condensed consolidated balance sheets. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 3 Months Ended |
May 01, 2021 | |
Debt Disclosure | |
Schedule of Outstanding Balances Under our Credit Facilities | The outstanding balances under our credit facilities were as follows ( in thousands MAY 1, JANUARY 30, 2021 2021 UNAMORTIZED UNAMORTIZED DEBT NET DEBT NET OUTSTANDING ISSUANCE CARRYING OUTSTANDING ISSUANCE CARRYING AMOUNT COSTS AMOUNT AMOUNT COSTS AMOUNT Asset based credit facility (1) $ — $ — $ — $ — $ — $ — Equipment promissory notes (2) 31,942 (136) 31,806 37,532 (171) 37,361 Total credit facilities $ 31,942 $ (136) $ 31,806 $ 37,532 $ (171) $ 37,361 (1) Deferred financing fees associated with the asset based credit facility as of May 1, 2021 and January 30, 2021 were $1.3 million and $1.5 million, respectively, and are included in other non-current assets on the condensed consolidated balance sheets. The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit, 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 $28.1 million outstanding was included in other current liabilities on the condensed consolidated balance sheets as of May 1, 2021. The remaining $3.8 million outstanding, included in equipment promissory notes — net on the condensed consolidated balance sheets, has principal payments due of $2.6 million and $1.2 million in fiscal 2022 and fiscal 2023, respectively. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 01, 2021 | |
Fair Value Measurements | |
Estimated Fair Value and Carrying Value of Notes | MAY 1, JANUARY 30, 2021 2021 FAIR CARRYING FAIR CARRYING VALUE VALUE (1) VALUE VALUE (1) Convertible senior notes due 2023 $ 325,556 $ 290,473 $ 301,794 $ 287,936 Convertible senior notes due 2024 307,193 288,280 286,161 284,182 (1) Carrying value represents the principal amount less the equity component of the 2023 Notes and 2024 Notes classified in stockholders’ equity, and does not exclude the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third party offering costs, as applicable. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 3 Months Ended |
May 01, 2021 | |
Net Income (Loss) Per Share | |
Schedule of Weighted Average Shares Used for Net Income (loss) per Share | THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Weighted-average shares—basic 21,003,244 19,242,641 Effect of dilutive stock-based awards 6,716,485 — Effect of dilutive convertible senior notes (1) 3,490,282 — Weighted-average shares—diluted 31,210,011 19,242,641 (1) The $300 million aggregate principal amount of convertible senior notes that were issued in June and July 2015 (the “2020 Notes”), the 2023 Notes and the 2024 Notes would have an impact on our dilutive share count beginning at stock prices at or above $118.13 per share, $193.65 per share and $211.40 per share, respectively . The 2020 Notes matured on July 15, 2020 and did not have an impact on our dilutive share count post-termination. The warrants associated with our 2020 Notes, 2023 Notes and 2024 Notes have an impact on our dilutive share count beginning at stock prices at or above $189.00 per share, $309.84 per share and $338.24 per share, respectively. The warrants associated with our 2020 Notes expired on January 7, 2021. |
Anti-Dilutive Securities Excluded from Diluted Net Income (loss) per Share | THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Options 55,273 4,436,083 Restricted stock units — 177,312 Convertible senior notes — 589,095 Total anti-dilutive stock-based awards 55,273 5,202,490 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
May 01, 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 operations metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280— Segment Reporting in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 RH SEGMENT WATERWORKS TOTAL RH SEGMENT WATERWORKS TOTAL Net revenues $ 819,823 $ 40,969 $ 860,792 $ 454,957 $ 27,938 $ 482,895 Gross profit 386,553 20,424 406,977 187,762 11,892 199,654 Depreciation and amortization 22,680 1,206 23,886 23,717 1,153 24,870 |
Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting | The following table presents the balance sheet metrics as required under ASC 280— Segment Reporting in thousands MAY 1, JANUARY 30, 2021 2021 REAL ESTATE REAL ESTATE RH SEGMENT WATERWORKS DEVELOPMENT TOTAL RH SEGMENT WATERWORKS DEVELOPMENT TOTAL Goodwill (1) $ 141,152 $ — $ — $ 141,152 $ 141,100 $ — $ — $ 141,100 Tradenames, trademarks and other intangible assets (2) 55,237 17,000 — 72,237 54,663 17,000 — 71,663 Equity method investments — — 99,131 99,131 — — 100,603 100,603 Total assets 2,992,647 145,539 99,131 3,237,317 2,659,944 137,766 100,603 2,898,313 (1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of 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, with $20.5 million and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively. |
Schedule of Segment Operating Income and Income Before Income Taxes | The following table presents segment operating income (loss) and income (loss) before income taxes ( in thousands THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Operating income (loss): RH Segment $ 188,010 $ 49,517 Waterworks 6,242 (1,450) Non-cash compensation (5,864) — Recall accrual (500) — Asset impairments and change in useful lives — (8,471) Reorganization related costs — (4,143) Income from operations 187,888 35,453 Interest expense—net 13,308 19,629 Loss on extinguishment of debt 105 — Tradename impairment — 20,459 Income (loss) before income taxes $ 174,475 $ (4,635) |
Net Revenues | THREE MONTHS ENDED MAY 1, MAY 2, 2021 2020 Furniture $ 580,011 $ 312,523 Non-furniture 280,781 170,372 Total net revenues $ 860,792 $ 482,895 |
The Company (Detail)
The Company (Detail) | May 01, 2021itemstatestore |
The Company | |
Number of galleries | 68 |
Number of RH outlet stores | store | 38 |
Number of states that galleries and stores operate, District of Columbia and Canada | state | 30 |
Number of waterworks showrooms throughout the United States and in the U.K. | 14 |
Prepaid Expense and Other Ass_3
Prepaid Expense and Other Assets - Prepaid Expense and Other Current Assets (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid expense and other current assets | $ 52,819 | $ 42,079 |
Capitalized catalog costs | 13,826 | 19,067 |
Promissory note receivable, including interest | 13,816 | 13,569 |
Vendor deposits | 12,689 | 12,519 |
Right of return asset for merchandise | 8,173 | 7,453 |
Acquisition related escrow deposits | 4,400 | 2,650 |
Total prepaid expense and other current assets | $ 105,723 | $ 97,337 |
Prepaid Expense and Other Ass_4
Prepaid Expense and Other Assets - Other Non-Current Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
May 01, 2021 | Jan. 30, 2021 | |
Other Assets Noncurrent [Abstract] | ||
Landlord assets under construction-net of tenant allowances | $ 169,312 | $ 135,531 |
Initial direct costs prior to lease commencement | 41,843 | 36,770 |
Capitalized cloud computing costs-net | 8,547 | 7,254 |
Other deposits | 7,344 | 5,287 |
Acquisition related escrow deposits | 1,600 | 3,975 |
Deferred financing fees | 1,256 | 1,525 |
Other non-current assets | 10,109 | 9,835 |
Total other non-current assets | 240,011 | 200,177 |
Accumulated amortization | $ 1,100 | $ 500 |
Goodwill, Tradenames, Tradema_3
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Goodwill, Tradenames, Trademarks and Domain Names Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
May 01, 2021 | May 02, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Goodwill Activity | ||||||
Goodwill, Beginning balance | $ 141,100 | |||||
Goodwill, Ending balance | 141,152 | $ 141,100 | ||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 71,663 | |||||
Tradename impairment | $ 20,459 | |||||
Indefinite-lived intangible assets, Ending balance | 72,237 | 71,663 | ||||
RH Segment | ||||||
Goodwill Activity | ||||||
Goodwill, Beginning balance | 141,100 | |||||
Goodwill, Foreign Currency Translation | 52 | |||||
Goodwill, Ending balance | 141,152 | 141,100 | ||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 54,663 | |||||
Indefinite-lived intangible assets, Ending balance | 55,237 | 54,663 | ||||
RH Segment | Tradenames, trademarks and other intangible assets | ||||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 54,663 | |||||
Indefinite-lived intangible assets, Acquisition | 574 | |||||
Indefinite-lived intangible assets, Ending balance | 55,237 | 54,663 | ||||
Waterworks | ||||||
Goodwill Activity | ||||||
Goodwill impairment charge | 51,100 | $ 17,400 | $ 33,700 | $ 51,100 | ||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 17,000 | |||||
Tradename impairment | 35,100 | $ 20,500 | 20,500 | $ 14,600 | ||
Indefinite-lived intangible assets, Ending balance | 17,000 | 17,000 | ||||
Waterworks | Tradename | ||||||
Tradenames, trademarks and domain names Activity | ||||||
Indefinite-lived intangible assets,Beginning balance | 17,000 | |||||
Indefinite-lived intangible assets, Ending balance | $ 17,000 | $ 17,000 |
Goodwill, Tradenames, Tradema_4
Goodwill, Tradenames, Trademarks and Other Intangible Assets - Waterworks Tradename Impairment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
May 01, 2021 | May 02, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | |
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Impaired Intangible Asset, Facts and Circumstances Leading to Impairment | COVID-19 health crisis and related Showroom closures and slowdown in construction activity | |||
Impaired Intangible Asset, Description | We performed an interim impairment test on the Waterworks tradename and the estimated future cash flows of the Waterworks reporting unit indicated the fair value of the tradename asset was below its carrying amount. | |||
Impaired Intangible Asset, Method for Fair Value Determination | We determined fair value utilizing a discounted cash flow methodology under the relief-from-royalty method. Significant assumptions under this method include forecasted net revenues and the estimated royalty rate, expressed as a percentage of revenues, in addition to the discount rate based on the weighted-average cost of capital. | |||
Non-cash impairment charge | $ 20,459 | |||
Waterworks | ||||
Indefinite Lived Intangible Assets By Major Class [Line Items] | ||||
Non-cash impairment charge | $ 35,100 | $ 20,500 | $ 20,500 | $ 14,600 |
Equity Method Investments (Deta
Equity Method Investments (Detail) $ in Thousands | 3 Months Ended |
May 01, 2021USD ($)item | |
Related Party Transaction [Line Items] | |
Share of equity method investments losses | $ 2,095 |
Aspen LLC's | |
Related Party Transaction [Line Items] | |
Joint venture, percentage of ownership | 50.00% |
Number of privately held limited companies | item | 3 |
Share of equity method investments losses | $ 2,100 |
Aspen LLC's | Prepaid expenses and other current assets | Promissory notes receivable | |
Related Party Transaction [Line Items] | |
Contributed capital membership interest | $ 13,800 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Accounts payable | $ 231,901 | $ 224,906 |
Accrued compensation | 49,503 | 84,860 |
Accrued freight and duty | 33,698 | 29,754 |
Accrued sales taxes | 25,474 | 23,706 |
Accrued occupancy | 21,252 | 17,671 |
Accrued catalog costs | 6,460 | 4,354 |
Accrued professional fees | 4,532 | 5,383 |
Deferred consideration for asset purchase | 14,387 | |
Other accrued expenses | 16,591 | 19,401 |
Total accounts payable and accrued expenses | $ 389,411 | $ 424,422 |
Accounts Payable, Accrued Exp_4
Accounts Payable, Accrued Expenses and Other Current Liabilities - Other Current Liabilities (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Accounts Payable, Accrued Expenses and Other Current Liabilities | ||
Allowance for sales returns | $ 28,649 | $ 25,559 |
Current portion of equipment promissory notes | 28,067 | 22,747 |
Unredeemed gift card and merchandise credit liability | 18,574 | 19,173 |
Finance lease liabilities | 15,322 | 14,671 |
Product recall reserve | 7,012 | 8,181 |
Other current liabilities | 3,980 | 5,175 |
Total other current liabilities | $ 101,604 | $ 95,506 |
Accounts Payable, Accrued Exp_5
Accounts Payable, Accrued Expenses and Other Current Liabilities - Contract Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Contract Liabilities | ||
Revenue recognized on membership period | 1 year | |
Gift card breakage recorded | $ 0.4 | $ 0.6 |
Gift card and merchandise credits | ||
Contract Liabilities | ||
Revenue related to previous deferrals related to gift cards | $ 4.9 | $ 4.1 |
Percentage of remaining revenue recognized on gift card | 75.00% |
Other Non-Current Obligations_2
Other Non-Current Obligations (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Other Non-Current Obligations. | ||
Deferred payroll taxes | $ 4,461 | $ 4,461 |
Rollover units and profit interests | 3,597 | 3,490 |
Unrecognized tax benefits | 3,324 | 3,114 |
Other noncurrent obligations | 4,445 | 5,916 |
Total other non-current obligations | $ 15,827 | $ 16,981 |
Leases - Lease Costs-Net (Detai
Leases - Lease Costs-Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Lease costs-net: | ||
Operating lease cost | $ 23,567 | $ 20,726 |
Finance lease costs | ||
Amortization of leased assets | 10,918 | 9,588 |
Interest on lease liabilities | 6,150 | 5,781 |
Variable lease costs | 8,427 | 3,560 |
Sublease income | (1,182) | (2,575) |
Total lease cost-net | 47,880 | 37,080 |
Variable lease payments | 6,300 | 2,000 |
Common area maintenance | $ 2,100 | $ 1,600 |
Leases - Lease Right-of-Use Ass
Leases - Lease Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Assets and Liabilities, Lessee [Abstract] | ||
Operating leases | $ 541,841 | $ 456,164 |
Balance Sheet Classification, Operating lease right-of-use assets | Operating leases | Operating leases |
Finance leases | $ 718,001 | $ 711,804 |
Balance Sheet Classification, Property and equipment-net | Property and equipment-net | Property and equipment-net |
Total lease right-of-use assets | $ 1,259,842 | $ 1,167,968 |
Liabilities, Current | ||
Operating leases, current | $ 72,442 | $ 71,524 |
Balance Sheet Classification, Operating lease liabilities | Operating leases, current | Operating leases, current |
Finance leases, current | $ 15,322 | $ 14,671 |
Balance Sheet Classification, Other current liabilities | Other current liabilities | Other current liabilities |
Total lease liabilities-current | $ 87,764 | $ 86,195 |
Liabilities, Non-current | ||
Operating leases, noncurrent | $ 532,142 | $ 448,169 |
Balance Sheet Classification, Non-current operating lease liabilities | Operating leases, noncurrent | Operating leases, noncurrent |
Finance leases, noncurrent | $ 501,118 | $ 485,481 |
Balance Sheet Classification, Non-current finance lease liabilities | Finance leases, noncurrent | Finance leases, noncurrent |
Total lease liabilities-non-current | $ 1,033,260 | $ 933,650 |
Total lease liabilities | 1,121,024 | 1,019,845 |
Finance lease right-of-use assets, accumulated amortization | $ 144,000 | $ 133,000 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | Jan. 30, 2021 | |
Leases | ||
2021 | $ 24,100 | |
2022 | 32,500 | |
2023 | 37,300 | |
2024 | 38,700 | |
2025 | 40,000 | |
2026 | 39,800 | |
Thereafter | 455,000 | |
Maturities of lease liabilities, Operating Leases | ||
Remainder of fiscal 2021 | 72,017 | |
2022 | 88,706 | |
2023 | 80,696 | |
2024 | 74,575 | |
2025 | 74,475 | |
2026 | 71,741 | |
Thereafter | 276,516 | |
Total lease payments | 738,726 | |
Less-imputed interest | (134,142) | |
Present value of lease liabilities | 604,584 | |
Maturities of lease liabilities, Finance Leases | ||
Remainder of fiscal 2021 | 29,966 | |
2022 | 40,352 | |
2023 | 40,771 | |
2024 | 41,169 | |
2025 | 42,385 | |
2026 | 43,164 | |
Thereafter | 575,649 | |
Total lease payments | 813,456 | |
Less-imputed interest | (297,016) | |
Present value of lease liabilities | 516,440 | |
Total maturities of lease liabilities | ||
Remainder of fiscal 2021 | 101,983 | |
2022 | 129,058 | |
2023 | 121,467 | |
2024 | 115,744 | |
2025 | 116,860 | |
2026 | 114,905 | |
Thereafter | 852,165 | |
Total lease payments | 1,552,182 | |
Less-imputed interest | (431,158) | |
Present value of lease liabilities | 1,121,024 | $ 1,019,845 |
Legally binding payments for leases signed but not yet commenced | 667,400 | |
Future commitments under short-term lease agreements | $ 1,800 | |
Short-term lease agreements, commitments | true |
Leases - Supplemental Informati
Leases - Supplemental Information Related to Leases (Detail) | May 01, 2021 | May 02, 2020 |
Weighted-average remaining lease term (years) | ||
Operating leases, years | 9 years 6 months | 8 years 8 months 12 days |
Finance leases, years | 18 years 2 months 12 days | 18 years 4 months 24 days |
Weighted-average discount rate | ||
Operating leases, percent | 4.00% | 3.82% |
Finance leases, percent | 4.99% | 5.25% |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ (25,456) | $ (10,786) |
Operating cash flows from finance leases | (6,253) | (2,437) |
Financing cash flows from finance leases | (3,671) | (2,068) |
Total cash outflows from leases | (35,380) | (15,291) |
Lease right-of-use assets obtained in exchange for lease obligations-net of lease terminations (non-cash) | ||
Operating leases | 103,088 | 1,198 |
Finance leases | $ 19,611 | $ 58 |
Leases - Long-lived Asset Impai
Leases - Long-lived Asset Impairment (Detail) - RH Baby & Child and TEEN Gallery and Waterworks Showroom $ in Millions | 3 Months Ended |
May 02, 2020USD ($) | |
Sale Leaseback Transaction [Line Items] | |
Impairment charge on long-lived assets | $ 3.5 |
Property Plant and Equipment Other Than Leased Assets | |
Sale Leaseback Transaction [Line Items] | |
Impairment charge on long-lived assets | 1.5 |
Leased Assets | |
Sale Leaseback Transaction [Line Items] | |
Impairment charge on long-lived assets | $ 2 |
Convertible Senior Notes - $350
Convertible Senior Notes - $350 million 0.00% Convertible Senior Notes due 2024 (Detail) | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2019USD ($)$ / shares | May 01, 2021USD ($)$ / shares | May 02, 2020USD ($) | Jan. 30, 2021USD ($) | |
Debt default conditions | ||||
Amortization of debt discount | $ 8,670,000 | $ 12,916,000 | ||
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, conversion description | The initial conversion rate applicable to the 2024 Notes is 4.7304 shares of common stock per $1,000 principal amount of 2024 Notes, or a total of approximately 1.656 million shares for the total $350 million principal amount. This initial conversion rate is equivalent to an initial conversion price of approximately $211.40 per share, which represents a 25% premium to the $169.12 closing share price on the day the 2024 Notes were priced. | |||
Debt default, failure to pay due indebtedness, threshold amount | $ 20,000,000 | |||
Debt default, failure to pay due indebtedness, threshold period | 30 days | |||
Percentage of aggregate principal amount of notes outstanding | 25.00% | |||
Debt instrument, initial conversion rate | 100 | |||
Debt instrument, conversion principal amount | $ 1,000 | |||
Debt instrument, total conversion rate | 1,656,000 | |||
Debt instrument, convertible earliest date | Jun. 15, 2024 | |||
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 | $ 200,000 | 200,000 | ||
Amortization of debt discount | $ 4,100,000 | $ 3,900,000 | ||
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 | 20 | |||
Debt instrument, convertible consecutive trading days | 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 | 5 | |||
Debt instrument, convertible consecutive trading days | 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 | May 01, 2021 | Jan. 30, 2021 | Sep. 30, 2019 |
Liability component | |||
Principal | $ 350,000 | $ 350,000 | $ 350,000 |
Less: Debt discount | (61,720) | (65,818) | $ (3,500) |
Net carrying amount | 288,280 | 284,182 | |
Equity component | $ 87,252 | $ 87,252 |
Convertible Senior Notes - 2024
Convertible Senior Notes - 2024 Notes-Convertible Bond Hedge and Warrant Transactions (Detail) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | May 01, 2021USD ($)$ / shares | |
Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Deferred tax asset | $ | $ 22,700 | |
Convertible senior notes due 2024 | ||
Debt Instrument | ||
Debt instrument, issuance date | Sep. 30, 2019 | |
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 |
Deferred tax liability | $ | $ 21,700 | |
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 | shares | 1,656 | |
Conversion price per share | $ / shares | $ 211.40 | |
Convertible note hedge, number of shares | $ | 1,656 | |
Total cost of convertible note hedge transactions | $ | $ 91,400 | |
Warrants price per share | $ / shares | $ 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 | shares | 3,300 | |
Common Stock | Convertible senior notes due 2024 | ||
Debt Instrument | ||
Conversion price per share | $ / shares | $ 211.40 |
Convertible Senior Notes - $335
Convertible Senior Notes - $335 million 0.00% Convertible Senior Notes due 2023 (Detail) | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2020USD ($) | Jun. 30, 2018USD ($)$ / shares | May 01, 2021USD ($)$ / sharesshares | May 02, 2020USD ($)shares | May 31, 2021USD ($) | Jan. 30, 2021USD ($) | |
Debt default conditions | ||||||
Debt amount settled in cash | $ 2,035,000 | |||||
(Gain) Loss on extinguishment of debt | (105,000) | |||||
Amortization of debt discount | 8,670,000 | $ 12,916,000 | ||||
Common Stock | ||||||
Debt default conditions | ||||||
Shares acquired from notes settlement | shares | 600 | |||||
Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, principal amount | 332,644,000 | $ 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 | |||||
Conversion price per share | $ / shares | $ 309.84 | |||||
Deemed elected combination settlement amount per note to be received upon conversion | $ 1,000 | $ 30,800,000 | ||||
Debt instrument, effective interest rate | 6.35% | |||||
Debt amount settled in cash | $ 2,400,000 | $ 2,400,000 | ||||
Convertible debt expected to be settled in cash | $ 30,800,000 | |||||
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 | 300,000 | $ 200,000 | ||||
Amortization of debt discount | $ 4,600,000 | $ 4,300,000 | ||||
Convertible senior notes due 2023 | Convertible debt instrument conversion period one | ||||||
Debt default conditions | ||||||
Debt instrument, convertible trading days | 20 | |||||
Debt instrument, convertible consecutive trading days | 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 | 5 | |||||
Debt instrument, convertible consecutive trading days | 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, 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 | $ 1,000,000 | |||||
Conversion price per share | $ / shares | $ 193.65 | $ 193.65 | ||||
Convertible bond hedge and warrant transactions | Convertible senior notes due 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, issuance date | Jun. 30, 2018 | |||||
Debt default conditions | ||||||
Shares issued upon conversion | shares | 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 | May 01, 2021 | Jan. 30, 2021 | Jun. 30, 2018 |
Liability component | |||
Principal | $ 332,644 | $ 335,000 | |
Less: Debt discount | (42,171) | (47,064) | $ (1,700) |
Net carrying amount | 290,473 | 287,936 | |
Equity component | $ 90,756 | $ 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 | 3 Months Ended |
Jun. 30, 2018USD ($)$ / shares$ / derivativeshares | May 01, 2021USD ($)$ / sharesshares | |
Convertible bond hedge and warrant transactions | ||
Debt Instrument | ||
Deferred tax asset | $ 22,700 | |
Convertible senior notes due 2023 | ||
Debt Instrument | ||
Shares issued upon conversion | shares | 7,307 | |
Conversion price per share | $ / shares | $ 309.84 | |
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 | |
Total cost of convertible note hedge transactions | $ 91,900 | |
Convertible note hedge, number of shares | 1,730 | |
Convertible note hedge, price per share | $ / derivative | 193.65 | |
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 |
Credit Facilities - Outstanding
Credit Facilities - Outstanding Balances (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Line of Credit Facility | ||
Outstanding Amount | $ 31,942 | $ 37,532 |
Unamortized Debt Issuance Costs | (136) | (171) |
Net Carrying Amount | 31,806 | 37,361 |
Equipment promissory notes | ||
Line of Credit Facility | ||
Outstanding Amount | 31,942 | 37,532 |
Unamortized Debt Issuance Costs | (136) | (171) |
Net Carrying Amount | $ 31,806 | $ 37,361 |
Credit Facilities - Asset Based
Credit Facilities - Asset Based Credit Facility (Detail) - USD ($) $ in Thousands | Apr. 04, 2019 | Jun. 28, 2017 | May 01, 2021 | May 02, 2020 | Jan. 30, 2021 |
Line of Credit Facility | |||||
Outstanding amount | $ 31,942 | $ 37,532 | |||
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 | ||||
Availability under revolving line of credit for extensions of credit, fixed amount | $ 40,000 | ||||
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. | ||||
Loss on extinguishment of debt | $ 105 | ||||
Outstanding revolving line of credit | $ 31,806 | 37,361 | |||
Restoration Hardware Canada, Inc. | |||||
Line of Credit Facility | |||||
Outstanding amount | $ 120,000 | ||||
Interest rate greater than interest rate under the revolving credit facility | 1.25% | ||||
Credit Agreement | |||||
Line of Credit Facility | |||||
Agreement, date | Jun. 28, 2017 | ||||
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 | $ 1,300 | 1,500 | |||
Repaid amount of loan | $ 61,100 | ||||
Revolving Credit Facility | |||||
Line of Credit Facility | |||||
Aggregate amounts outstanding | 0 | ||||
Availability under the revolving line of credit | 285,600 | ||||
Outstanding letters of credit | 20,100 | ||||
Revolving Credit Facility | Credit Agreement | Scenario, Plan Subject to Satisfaction of Conditions | |||||
Line of Credit Facility | |||||
Increase in revolving line of credit | $ 200,000 | ||||
Revolving Credit Facility | Credit Agreement | Maximum | |||||
Line of Credit Facility | |||||
Line of credit facility, maximum borrowing capacity | 600,000 | ||||
Revolving Credit Facility | Credit Agreement | Maximum | Scenario, Plan Subject to Satisfaction of Conditions | |||||
Line of Credit Facility | |||||
Line of credit | 800,000 | ||||
Revolving Credit Facility | Credit Agreement | Minimum | |||||
Line of Credit Facility | |||||
Line of credit facility, maximum borrowing capacity | 600,000 | ||||
Revolving Credit Facility | Credit Agreement | Restoration Hardware Canada, Inc. | |||||
Line of Credit Facility | |||||
Availability under the revolving line of credit | 10,000 | ||||
LILO Term Loan Facility | Credit Agreement | |||||
Line of Credit Facility | |||||
Line of credit facility, maximum borrowing capacity | $ 80,000 | ||||
Equipment promissory notes | |||||
Line of Credit Facility | |||||
2022 | 2,600 | ||||
2024 | 1,200 | ||||
Outstanding amount | 31,942 | 37,532 | |||
Outstanding revolving line of credit | 31,806 | $ 37,361 | |||
Equipment promissory notes | Other current liabilities | |||||
Line of Credit Facility | |||||
Aggregate amounts outstanding | 28,100 | ||||
Equipment promissory notes | Equipment promissory notes, net | |||||
Line of Credit Facility | |||||
Aggregate amounts outstanding | $ 3,800 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value and Carrying Value of Notes (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Convertible senior notes due 2023 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | $ 325,556 | $ 301,794 |
Convertible senior notes, Carrying Value | 290,473 | 287,936 |
Convertible senior notes due 2024 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions | ||
Convertible senior notes, Fair Value | 307,193 | 286,161 |
Convertible senior notes, Carrying Value | $ 288,280 | $ 284,182 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Income Taxes | ||
Income tax expense | $ 41,724 | $ (1,423) |
Effective income tax rate | 24.20% | 30.70% |
Unrecognized tax benefits | $ 8,600 | |
Tax expense and the effective tax rate, if recognized | 7,800 | |
Exposures related to unrecognized tax benefits | $ 6,200 | |
Period of unrecognized tax benefits change | 12 months |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share (Detail) - shares | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Net Income (Loss) Per Share | ||
Weighted-average shares-basic | 21,003,244 | 19,242,641 |
Effect of dilutive stock-based awards | 6,716,485 | |
Effect of dilutive convertible senior notes | 3,490,282 | |
Weighted-average shares-diluted | 31,210,011 | 19,242,641 |
Net Income (Loss) Per Share -_2
Net Income (Loss) Per Share - Schedule of Weighted-Average Shares Used for Net Income per Share Footnotes (Detail) - USD ($) $ / shares in Units, $ in Thousands | May 01, 2021 | Jan. 30, 2021 | Sep. 30, 2019 | Jun. 30, 2018 |
Convertible senior notes due 2020 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 300,000 | |||
Convertible senior notes due 2020 | Common Stock | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 118.13 | |||
Convertible senior notes due 2020 | Warrant | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 189 | |||
Convertible senior notes due 2023 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 332,644 | $ 335,000 | ||
Conversion price per share | $ 309.84 | |||
Convertible senior notes due 2023 | Common Stock | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 193.65 | $ 193.65 | ||
Convertible senior notes due 2023 | Warrant | ||||
Earnings Per Share Diluted | ||||
Conversion price per share | $ 309.84 | |||
Convertible senior notes due 2024 | ||||
Earnings Per Share Diluted | ||||
Principal | $ 350,000 | $ 350,000 | $ 350,000 | |
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 (Loss) Per Share - A
Net Income (Loss) Per Share - Anti-Dilutive Securities Excluded from Diluted Net Income per Share (Detail) - shares | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options were excluded from calculation of diluted net earnings share | 55,273 | 5,202,490 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options were excluded from calculation of diluted net earnings share | 55,273 | 4,436,083 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options were excluded from calculation of diluted net earnings share | 177,312 | |
Convertible senior notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options were excluded from calculation of diluted net earnings share | 589,095 |
Share Repurchase Program (Detai
Share Repurchase Program (Detail) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 12 Months Ended | ||
May 02, 2020 | Feb. 01, 2020 | Feb. 02, 2019 | May 01, 2021 | |
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program | $ 72 | |||
$950 Million Repurchase Program | ||||
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program, shares | 2.2 | |||
Shares of common stock purchased at an average price per share under repurchase program | $ 115.36 | |||
Shares of common stock purchased under repurchase program | $ 250,000 | |||
Share repurchase program authorized amount | $ 950,000 | |||
Amount of shares available under repurchase program | $ 450,000 | |||
Fiscal 2018 $700 million repurchase program | ||||
Share Repurchase Program and Equity Plans | ||||
Shares of common stock purchased under repurchase program, shares | 2 | |||
Shares of common stock purchased at an average price per share under repurchase program | $ 122.10 | |||
Shares of common stock purchased under repurchase program | $ 250,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 18, 2020 | May 01, 2021 | May 02, 2020 | Jan. 30, 2021 | Oct. 31, 2020 |
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Stock-based compensation expense | $ 15,307 | $ 5,828 | |||
Stock-based compensation cost capitalized | 0 | 0 | |||
Rollover units and profit interests | 3,597 | $ 3,490 | |||
Selling, general and administrative expenses | $ 219,089 | 164,201 | |||
Design Investors WW Acquisition Company, LLC | Profit interests | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Profit interest expected life | 5 years | ||||
Selling, general and administrative expenses | $ 100 | $ 100 | |||
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 | 2,100 | 2,000 | |||
Stock Options | Chairman and Chief Executive Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Option to purchase of common stock | 700,000 | ||||
Exercise price of option granted | $ 385.30 | ||||
Appreciation rights | Design Investors WW Acquisition Company, LLC | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Rollover units and profit interests | 1,500 | $ 1,500 | |||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Stock Options | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Unrecognized compensation expense related to unvested options | $ 114,700 | ||||
Unrecognized compensation expense with weighted-average period | 4 years 8 months 4 days | ||||
Aggregate intrinsic value of options outstanding | $ 4,951,300 | ||||
Aggregate intrinsic value of options vested or expected to vest | 4,755,800 | ||||
Aggregate intrinsic value of options exercisable | $ 4,059,200 | ||||
Outstanding shares | 8,508,074 | ||||
Options outstanding, weighted-average exercise price per share | $ 106.07 | ||||
Weighted-average remaining contractual life of options exercisable | 3 years 7 months 28 days | ||||
Numbers of options vested | 6,780,119 | ||||
Vested weighted-average exercise price per share | $ 89.33 | ||||
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 | $ 5,900 | ||||
Unrecognized compensation expense related to unvested options | 50,700 | $ 50,700 | |||
2012 Stock Incentive Plan and 2012 Stock Option Plan | Restricted stock and restricted stock unit | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Unrecognized compensation expense related to unvested options | $ 2,800 | ||||
Unrecognized compensation expense with weighted-average period | 8 months 4 days | ||||
Restricted stock awards outstanding | 89,830 | ||||
Restricted stock awards outstanding with weighted-average grant date fair value per share | $ 73.51 | ||||
Weighted-average fair value per share of awards granted | $ 51.23 | ||||
Vested restricted stock unit | 4,420 | ||||
Time-Based Restrictions and Performance-Based Restrictions | Chairman and Chief Executive Officer | |||||
Share Based Compensation Arrangement By Share Based Payment Award | |||||
Aggregate non-cash stock compensation expense | $ 173,600 |
Commitments and Contingencies (
Commitments and Contingencies (Detail) | May 01, 2021USD ($) |
Commitments and Contingencies. | |
Material off balance sheet commitments | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Detail) | 3 Months Ended | |
May 01, 2021customerstoresegment | May 02, 2020customer | |
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 |
Sales | Customer concentration risk | ||
Segment Reporting Information | ||
Portion of specified customers portion in total revenues | 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 | |
May 01, 2021 | May 02, 2020 | |
Segment Reporting Information | ||
Net revenues | $ 860,792 | $ 482,895 |
Gross profit | 406,977 | 199,654 |
Depreciation and amortization | 23,886 | 24,870 |
Share of equity method investments losses | 2,095 | |
RH Segment | ||
Segment Reporting Information | ||
Net revenues | 819,823 | 454,957 |
Gross profit | 386,553 | 187,762 |
Depreciation and amortization | 22,680 | 23,717 |
Waterworks | ||
Segment Reporting Information | ||
Net revenues | 40,969 | 27,938 |
Gross profit | 20,424 | 11,892 |
Depreciation and amortization | 1,206 | $ 1,153 |
Real Estate Investments | ||
Segment Reporting Information | ||
Share of equity method investments losses | $ 2,100 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Metrics as Required Under ASC 280 (Detail) - USD ($) $ in Thousands | May 01, 2021 | Jan. 30, 2021 |
Segment Reporting Information | ||
Goodwill | $ 141,152 | $ 141,100 |
Tradenames, trademarks and other intangible assets | 72,237 | 71,663 |
Equity method investments | 99,131 | 100,603 |
Total assets | 3,237,317 | 2,898,313 |
RH Segment | ||
Segment Reporting Information | ||
Goodwill | 141,152 | 141,100 |
Tradenames, trademarks and other intangible assets | 55,237 | 54,663 |
Total assets | 2,992,647 | 2,659,944 |
Waterworks | ||
Segment Reporting Information | ||
Tradenames, trademarks and other intangible assets | 17,000 | 17,000 |
Total assets | 145,539 | 137,766 |
Real Estate Development | ||
Segment Reporting Information | ||
Equity method investments | 99,131 | 100,603 |
Total assets | $ 99,131 | $ 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 01, 2021 | May 02, 2020 | Jan. 30, 2021 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Segment Reporting Information | ||||||
Tradename impairment | $ 20,459 | |||||
Waterworks | ||||||
Segment Reporting Information | ||||||
Goodwill impairment | $ 51,100 | $ 17,400 | $ 33,700 | $ 51,100 | ||
Tradename impairment | $ 35,100 | $ 20,500 | $ 20,500 | $ 14,600 |
Segment Reporting - Segment Ope
Segment Reporting - Segment Operating Income (Loss) and Income (Loss) Before Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Segment Reporting Information | ||
Non-cash compensation | $ (5,864) | |
Recall accrual | (500) | |
Asset impairments and change in useful lives | $ (8,471) | |
Reorganization related costs | (4,143) | |
Income from operations | 187,888 | 35,453 |
Interest expense-net | 13,308 | 19,629 |
Loss on extinguishment of debt | 105 | |
Tradename impairment | 20,459 | |
Income (loss) before income taxes | 174,475 | (4,635) |
Operating segments | RH Segment | ||
Segment Reporting Information | ||
Income from operations | 188,010 | 49,517 |
Operating segments | Waterworks | ||
Segment Reporting Information | ||
Income from operations | $ 6,242 | $ (1,450) |
Segment Reporting - Net Revenue
Segment Reporting - Net Revenues, Categories (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2021 | May 02, 2020 | |
Segment Reporting Information | ||
Total net revenues | $ 860,792 | $ 482,895 |
Furniture | ||
Segment Reporting Information | ||
Total net revenues | 580,011 | 312,523 |
Non-furniture | ||
Segment Reporting Information | ||
Total net revenues | $ 280,781 | $ 170,372 |