RH (NYSE:RH)

Goodwill

The goodwill value shows a decreasing trend from 141,893 thousand US dollars in February 2018 to 124,367 thousand in February 2020. Subsequently, it increases to 141,100 thousand in January 2021 and remains relatively stable around this level through January 2023, with a slight decline to 141,048 thousand by the end of the period.

Tradenames, trademarks and other intangible assets

This category experienced a noticeable decline from 100,702 thousand US dollars in February 2018 to 71,663 thousand in January 2021. Following this low point, there is a marginal recovery to 74,633 thousand by January 2023, indicating a stabilization but only partial rebound compared to initial levels.

Combined Goodwill, tradenames, trademarks and other intangible assets

The total of goodwill, tradenames, trademarks, and other intangible assets decreased substantially from 242,595 thousand US dollars in February 2018 to 210,389 thousand in February 2020. From 2020 onwards, the figure remained relatively steady, showing a slight upward trend to 215,681 thousand by January 2023. This suggests overall stabilization after an initial decline in intangible asset values over the measured period.

Over the observed period, the total assets of the company exhibited a consistent upward trend with a notable acceleration in growth starting around the 2021 fiscal year. Reported total assets increased from approximately US$1.73 billion in early 2018 to a peak near US$5.54 billion in early 2022, followed by a slight decline to about US$5.31 billion in early 2023. Adjusted total assets, which exclude goodwill, closely mirrored this pattern, rising from roughly US$1.59 billion to US$5.40 billion over the same time frame, with a minor decrease in the latest period.

Stockholders’ equity showed more volatility across the years. The reported figures started with deficits in 2018 and 2019, measured at negative values, before turning positive in 2020 and exhibiting strong growth through 2021 and early 2022, reaching over US$1.17 billion. However, the reported equity declined notably in 2023 to approximately US$785 million. The adjusted equity followed a similar trajectory: starting with larger deficits and negative values in the first three years, improving substantially to positive values from 2021 onward, but also declining in 2023 to approximately US$644 million.

Net income displayed a significant increase over time, highlighting strong profitability growth from early 2018 to early 2022. Reported net income rose from around US$2.18 million in 2018 to a high of about US$688.5 million in 2022, then decreased to approximately US$529 million in 2023. Adjusted net income consistently exceeded reported net income in the initial years due to adjustments eliminating goodwill impacts, converging from 2020 onward and following the same pattern of growth and decline in the latter years.

Overall, the data indicate substantial expansion in asset base and profitability up to 2022, followed by a modest contraction in assets and equity and a decrease in net income in the latest fiscal period. The adjustments for goodwill reduce the asset and equity amounts, particularly in earlier years, but the underlying trends remain consistent. The decrease in stockholders’ equity and net income in 2023 may warrant further analysis to understand the underlying factors contributing to this downturn after multiple years of growth.

The analysis of the financial data reveals several notable trends and variations over the periods reported.

Net Profit Margin

Both reported and adjusted net profit margins show a generally increasing trend from 2018 through 2022, peaking notably in 2022 at 18.32%. In 2018, margins were minimal, with reported net profit margin at 0.09% and adjusted at 1.47%. The margins improved significantly by 2022 but decreased in 2023 to 14.72% for both reported and adjusted figures, indicating some decline in profitability after a peak year.

Total Asset Turnover

Reported total asset turnover steadily declined from 1.41 in 2018 to 0.68 in 2022 and remained stable in 2023. Adjusted total asset turnover also declined but maintained slightly higher ratios than reported, from 1.53 in 2018 to 0.69 in 2023. This indicates a consistent decrease in efficiency in utilizing assets to generate revenue over the years.

Financial Leverage

Financial leverage data is incomplete for the earlier years and becomes available from 2020 onward. The reported financial leverage dropped drastically from an exceptionally high 131.13 in 2020 to more modest levels of around 4.73–6.77 in the following years. Adjusted financial leverage shows a less extreme pattern, decreasing from 9.01 in 2020 to 5.25 in 2022, then rising again to 8.03 in 2023. This suggests considerable adjustment impacts and possibly volatility in leverage management during this period.

Return on Equity (ROE)

The reported ROE shows extreme volatility, spiking to 1181.57% in 2020 before normalizing to a range between approximately 59% and 67% in subsequent years. Adjusted ROE similarly peaks at 88.85% in 2020, then fluctuates between 66.9% and 82.14% through 2023. These figures indicate unusually high returns in 2020 potentially due to non-recurring factors or accounting adjustments, with continued strong performance afterward.

Return on Assets (ROA)

ROA trends indicate a general improvement over the years. The reported ROA starts very low at 0.13% in 2018, rising to a peak of 12.43% in 2022 before declining to 9.96% in 2023. The adjusted ROA shows a similar trajectory but with higher values, beginning at 2.26% in 2018 and peaking at 12.75% in 2022, then slightly falling to 10.23% in 2023. This suggests increased efficiency in asset use for profit generation over the period, with some recent moderation.

Overall, the data shows improvement in profitability and returns over time with notable fluctuations in leverage and efficiency measures. The adjustments to goodwill appear to moderate some of the more extreme values, especially in leverage and ROE, providing a more consistent view of financial performance. Despite decreasing asset turnover, the company experienced improved returns on both equity and assets, likely driven by higher margins and capital management. The decline in net profit margin and ROA in 2023 could warrant closer examination for underlying causes.

The financial data over the six-year period displays a significant evolution in both reported and adjusted net income alongside their respective profit margins. The analysis focuses on understanding the trends and variations in these key profitability metrics.

Net Income Trends

Reported net income shows a marked increase from a modest $2.18 million in early 2018 to a peak of $688.55 million by early 2022, followed by a decline to $528.64 million in early 2023. This represents a substantial growth trajectory with a notable contraction in the most recent year.

Adjusted net income, which accounts for goodwill adjustments, starts significantly higher than reported net income at $35.88 million in 2018, converging with reported figures from 2020 onwards. It mirrors the reported net income’s growth pattern, peaking in early 2022 before decreasing in 2023.

Profit Margin Trends

The reported net profit margin exhibits a comparable uptrend, beginning at a low 0.09% in 2018 and rising steadily to 18.32% in 2022. The margin then contracts to 14.72% in 2023, highlighting improved profitability with some recent erosion.

The adjusted net profit margin parallels the reported margin closely, starting higher at 1.47% in 2018 and matching the reported margin values from 2020 onwards. The same pattern of increase until 2022 and subsequent decrease in 2023 is evident here.

Observations and Insights

The initial disparity between reported and adjusted net income and profit margin in 2018 suggests the presence of one-time items or impairments such as goodwill write-downs, which were significant at that time but diminished in impact in later years.

The convergence of reported and adjusted values from 2020 forward indicates stabilized accounting adjustments and possibly improved operating performance or fewer non-recurring items influencing the earnings.

The peak in earnings and margins in 2022 followed by a decline in 2023 may warrant further examination to determine underlying causes, such as changes in revenues, expenses, market conditions, or other operational factors affecting profitability.

Overall, the data reveals a company that experienced substantial financial growth and margin enhancement over the period, with adjusted figures providing a clearer view of sustainable earnings apart from accounting anomalies.

The analysis of the reported and goodwill adjusted financial data over the six-year period reveals several notable trends and patterns related to total assets and total asset turnover ratios.

Total Assets

Reported total assets increased steadily from 1,732,866 thousand US dollars in 2018 to a peak of 5,540,470 thousand US dollars in 2022, followed by a slight decrease to 5,309,289 thousand US dollars in 2023. This indicates a robust expansion in the asset base over the period, with the largest growth occurring between 2021 and 2022.

Goodwill adjusted total assets exhibit a similar growth pattern, rising from 1,590,973 thousand US dollars in 2018 to 5,399,370 thousand US dollars in 2022 before decreasing slightly to 5,168,241 thousand US dollars in 2023. The adjusted figures are consistently lower than the reported totals, reflecting the removal or adjustment of goodwill from total assets.

Total Asset Turnover

The reported total asset turnover ratio shows a declining trend, starting at 1.41 in 2018 and decreasing gradually to 0.68 by 2022, remaining at the same level in 2023. This suggests a reduction in the company's efficiency in generating sales from its assets over time.

Similarly, the adjusted total asset turnover ratio declined from 1.53 in 2018 to 0.69 in 2023. Despite slight variations year-to-year, the overall trend mirrors that of the reported ratio, indicating a consistent decrease in asset utilization efficiency even after adjusting for goodwill.

Insights and Implications

The significant increase in total assets between 2018 and 2022, followed by a slight reduction in 2023, may indicate strategic acquisitions, investments, or asset revaluations contributing to growth, while the slight dip in the last year might reflect asset disposals or adjustments.

The steady decline in both reported and adjusted total asset turnover ratios points to decreasing efficiency in leveraging the asset base to generate revenues or sales. This trend could imply challenges in optimizing asset use, potential overinvestment in assets, or changes in the business model affecting asset productivity.

The close alignment between reported and adjusted figures for both total assets and turnover ratios highlights that goodwill adjustments have a consistent effect but do not alter the overall trends identified.

The financial data reveals several notable trends in the company’s asset base, equity position, and leverage ratios over the given periods.

Total Assets

There is a consistent upward trend in both reported and adjusted total assets from 2018 through 2023, with a significant acceleration starting from the fiscal year 2021. Reported total assets increased sharply from approximately US$2.9 billion in 2021 to over US$5.5 billion in 2022, though slightly declining to about US$5.3 billion in 2023. Adjusted total assets follow a similar pattern, rising from approximately US$2.8 billion in 2021 to nearly US$5.4 billion in 2022, then slightly decreasing to US$5.2 billion in 2023. This suggests substantial asset growth primarily in the years 2021 and 2022, with a minor contraction or stabilization in 2023.

Stockholders’ Equity (Deficit)

The reported stockholders’ equity shows a marked improvement over the period, transitioning from negative equity in 2018 and 2019 (approximately -US$7.3 million and -US$23 million respectively) to a positive and growing equity position starting in 2020. The equity surged to over US$447 million in 2021 and continued rising to about US$1.17 billion in 2022 before contracting to approximately US$785 million in 2023. The adjusted equity follows a similar trajectory but remains negative until 2020, with a notable turnaround in 2021, reaching over US$305 million and further climbing to approximately US$1.03 billion in 2022 before decreasing to about US$644 million in 2023. These trends indicate a significant recovery and strengthening of the equity base starting in 2020, followed by some decline in 2023, potentially reflecting operational or market challenges.

Financial Leverage

Financial leverage ratios exhibit substantial fluctuations. Reported financial leverage is extremely high at 131.13 in 2020, which indicates very high debt relative to equity during that year. However, the ratio decreases sharply to 6.48 in 2021 and further to 4.73 in 2022, suggesting considerable deleveraging or equity appreciation. The ratio rises again to 6.77 in 2023. Adjusted financial leverage data, available from 2021 onwards, shows a declining trend from 9.01 in 2021 to 5.25 in 2022, followed by an increase to 8.03 in 2023. This pattern aligns with the reported data and implies fluctuating leverage, possibly due to changes in debt levels or equity adjustments. The elevated leverage ratios in 2023 may warrant close monitoring for financial risk assessment.

The financial data reveals significant growth and volatility in several key metrics over the reported periods. The reported net income exhibits a sharp increase from a modest 2.18 million USD in early 2018 to a peak of approximately 688.5 million USD by early 2022, followed by a decline to 528.6 million USD in early 2023. Adjusted net income follows a similar pattern, closely aligning with reported figures from 2020 onward, indicating consistent adjustments becoming less material in recent periods.

Stockholders’ equity shows considerable fluctuation and an overall positive trend. The reported equity starts negative, at -7.3 million USD in 2018, deteriorating further into negative territory in 2019. It then turns positive from 2020 onwards, reaching a high of about 1.17 billion USD in early 2022 before retracting to around 785 million USD in early 2023. The adjusted stockholders’ equity is persistently more negative than reported values through 2020 but similarly turns positive afterwards, peaking at nearly 1.03 billion USD in 2022 before falling to about 644 million USD in 2023. This adjustment suggests notable goodwill or intangible asset influences prior to 2020.

Return on equity (ROE) metrics reveal extreme variability and improved profitability over time. Reported ROE data is missing for the earliest years but shows a dramatic spike to an unusually high 1181.57% in 2020, which then stabilizes at approximately 60-67% in subsequent years. The adjusted ROE, available from 2021, shows a more moderated but still elevated range from 66.9% to 82.14%. These figures signal exceptional returns relative to equity base in recent years, possibly impacted by shifts in accounting for goodwill.

In summary, the data indicates a pronounced growth trajectory in net income and equity positions beginning in 2020, supported by improved profitability as demonstrated by robust ROE figures. The significant differences between reported and adjusted equity figures prior to 2020 highlight the impact of accounting adjustments, likely related to goodwill. Despite fluctuations and a slight pullback in the most recent year, the overall financial position and performance exhibit strong upward trends during the reviewed periods.

Net Income Trends

Substantial growth from 2018 through 2022 followed by a moderate decrease in 2023.

Close alignment of reported and adjusted net income from 2020 onward.

Stockholders’ Equity Trends

Negative equity balances in early years transition to large positive values starting 2020.

Adjusted equity figures are more negative initially but converge with reported values after 2020.

Return on Equity (ROE)

Reported ROE shows extreme variability with normalization post-2020.

Adjusted ROE, starting in 2021, indicates strong and consistent profitability.

Overall Insights

Consistent equity and income growth after 2019.

Accounting for goodwill adjustments influenced equity figures notably before 2020.

Stable yet high profitability from 2021 onward, based on adjusted metrics.

The financial data over the periods from February 2018 to January 2023 reveals several notable trends in net income, total assets, and return on assets (ROA), both on a reported and goodwill-adjusted basis.

Net Income

Reported net income experienced significant growth from 2.18 million USD in early 2018 to a peak of approximately 688.5 million USD in early 2022. However, a decline followed in the latest period, falling to about 528.6 million USD by early 2023. The adjusted net income, which starts higher at 35.9 million USD due to adjustments, mirrors this trajectory exactly from 2019 onward, showing robust profitability growth through 2022 and a subsequent decrease in 2023.

Total Assets

Reported total assets grew steadily from approximately 1.73 billion USD in early 2018 to over 5.54 billion USD by early 2022, before slightly contracting to about 5.31 billion USD in the most recent period. The adjusted total assets follow a similar pattern, but with consistently lower figures, reflecting asset adjustments. This indicates overall asset base expansion until early 2022, followed by a modest reduction.

Return on Assets (ROA)

The reported ROA shows a substantial increase from 0.13% in 2018 to 12.43% in 2022, indicating improved efficiency in generating profits from assets. This was followed by a decrease to 9.96% in 2023. Adjusted ROA starts higher at 2.26% in 2018 and consistently remains above the reported figures across all years. It reaches its peak of 12.75% in 2022 before dropping to 10.23% in 2023.

Overall, the data suggests a strong growth phase for both profitability and asset base through 2022, with signs of cooling in 2023. Adjustments related to goodwill affect the net income and asset base values, generally elevating profitability ratios and providing a slightly more conservative asset valuation. The trends highlight the firm's increasing operational efficiency followed by a recent moderation in financial performance and asset size.