Stock Analysis on Net

RH (NYSE:RH)

This company has been moved to the archive! The financial data has not been updated since May 26, 2023.

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Adjustments to Financial Statements for Operating Leases

RH, adjustments to financial statements

US$ in thousands

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Adjustment to Total Assets
Total assets (as reported) 5,309,289 5,540,470 2,898,313 2,445,694 1,806,034 1,732,866
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 364,304 380,773
Total assets (adjusted) 5,309,289 5,540,470 2,898,313 2,445,694 2,170,338 2,113,639
Adjustment to Total Debt
Total debt (as reported) 3,163,320 2,820,470 1,104,277 1,327,410 931,283 874,207
Add: Operating lease liability (before adoption of FASB Topic 842)2 364,304 380,773
Add: Current operating lease liabilities 80,384 73,834 71,524 58,924
Add: Non-current operating lease liabilities 505,809 540,513 448,169 409,930
Total debt (adjusted) 3,749,513 3,434,817 1,623,970 1,796,264 1,295,587 1,254,980

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

1, 2 Equal to total present value of future operating lease payments.


RH, Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

RH, adjusted financial ratios

Microsoft Excel
Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Total Asset Turnover1
Reported total asset turnover 0.68 0.68 0.98 1.08 1.39 1.41
Adjusted total asset turnover 0.68 0.68 0.98 1.08 1.15 1.15
Debt to Equity2
Reported debt to equity 4.03 2.41 2.47 71.17
Adjusted debt to equity 4.78 2.94 3.63 96.31
Return on Assets3 (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% 6.94% 0.10%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. RH adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. RH adjusted debt to equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. RH adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

RH, Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
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 revenues 3,590,477 3,758,820 2,848,626 2,647,437 2,505,653 2,440,174
Total assets 5,309,289 5,540,470 2,898,313 2,445,694 1,806,034 1,732,866
Activity Ratio
Total asset turnover1 0.68 0.68 0.98 1.08 1.39 1.41
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Net revenues 3,590,477 3,758,820 2,848,626 2,647,437 2,505,653 2,440,174
Adjusted total assets 5,309,289 5,540,470 2,898,313 2,445,694 2,170,338 2,113,639
Activity Ratio
Adjusted total asset turnover2 0.68 0.68 0.98 1.08 1.15 1.15

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

2023 Calculations

1 Total asset turnover = Net revenues ÷ Total assets
= 3,590,477 ÷ 5,309,289 = 0.68

2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 3,590,477 ÷ 5,309,289 = 0.68

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. RH adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
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)
Total debt 3,163,320 2,820,470 1,104,277 1,327,410 931,283 874,207
Stockholders’ equity (deficit) 784,661 1,170,277 447,026 18,651 (22,962) (7,336)
Solvency Ratio
Debt to equity1 4.03 2.41 2.47 71.17
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt 3,749,513 3,434,817 1,623,970 1,796,264 1,295,587 1,254,980
Stockholders’ equity (deficit) 784,661 1,170,277 447,026 18,651 (22,962) (7,336)
Solvency Ratio
Adjusted debt to equity2 4.78 2.94 3.63 96.31

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

2023 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity (deficit)
= 3,163,320 ÷ 784,661 = 4.03

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity (deficit)
= 3,749,513 ÷ 784,661 = 4.78

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. RH adjusted debt-to-equity ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Return on Assets (ROA)

Microsoft Excel
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 for Operating Leases
Selected Financial Data (US$ in thousands)
Net income 528,642 688,546 271,815 220,375 150,639 2,180
Adjusted total assets 5,309,289 5,540,470 2,898,313 2,445,694 2,170,338 2,113,639
Profitability Ratio
Adjusted ROA2 9.96% 12.43% 9.38% 9.01% 6.94% 0.10%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

2023 Calculations

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

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

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