RH, adjustment to net income

US$ in thousands

12 months ended:	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Net income (as reported)	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Add: Net unrealized gains (losses) on investment securities	—)	—)	—)	—)	—)	11)
Net income (adjusted)	528,642)	688,546)	271,815)	220,375)	150,639)	2,191)

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RH, adjusted profitability ratios

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Net Profit Margin
Reported net profit margin	14.72%	18.32%	9.54%	8.32%	6.01%	0.09%
Adjusted net profit margin	14.72%	18.32%	9.54%	8.32%	6.01%	0.09%
Return on Equity (ROE)
Reported ROE	67.37%	58.84%	60.81%	1,181.57%	—	—
Adjusted ROE	67.37%	58.84%	60.81%	1,181.57%	—	—
Return on Assets (ROA)
Reported ROA	9.96%	12.43%	9.38%	9.01%	8.34%	0.13%
Adjusted ROA	9.96%	12.43%	9.38%	9.01%	8.34%	0.13%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	RH adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	RH adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	RH adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

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	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Net revenues	3,590,477)	3,758,820)	2,848,626)	2,647,437)	2,505,653)	2,440,174)
Profitability Ratio
Net profit margin¹	14.72%	18.32%	9.54%	8.32%	6.01%	0.09%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,191)
Net revenues	3,590,477)	3,758,820)	2,848,626)	2,647,437)	2,505,653)	2,440,174)
Profitability Ratio
Adjusted net profit margin²	14.72%	18.32%	9.54%	8.32%	6.01%	0.09%

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 528,642 ÷ 3,590,477 = 14.72%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × 528,642 ÷ 3,590,477 = 14.72%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	RH adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Stockholders’ equity (deficit)	784,661)	1,170,277)	447,026)	18,651)	(22,962)	(7,336)
Profitability Ratio
ROE¹	67.37%	58.84%	60.81%	1,181.57%	—	—
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,191)
Stockholders’ equity (deficit)	784,661)	1,170,277)	447,026)	18,651)	(22,962)	(7,336)
Profitability Ratio
Adjusted ROE²	67.37%	58.84%	60.81%	1,181.57%	—	—

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity (deficit)
= 100 × 528,642 ÷ 784,661 = 67.37%

² Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity (deficit)
= 100 × 528,642 ÷ 784,661 = 67.37%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	RH adjusted ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,180)
Total assets	5,309,289)	5,540,470)	2,898,313)	2,445,694)	1,806,034)	1,732,866)
Profitability Ratio
ROA¹	9.96%	12.43%	9.38%	9.01%	8.34%	0.13%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in thousands)
Adjusted net income	528,642)	688,546)	271,815)	220,375)	150,639)	2,191)
Total assets	5,309,289)	5,540,470)	2,898,313)	2,445,694)	1,806,034)	1,732,866)
Profitability Ratio
Adjusted ROA²	9.96%	12.43%	9.38%	9.01%	8.34%	0.13%

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 528,642 ÷ 5,309,289 = 9.96%

² Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 528,642 ÷ 5,309,289 = 9.96%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	RH adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

RH (NYSE:RH)

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