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RH (NYSE:RH)

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

Common-Size Income Statement

RH, common-size consolidated income statement

Microsoft Excel
12 months ended: Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018
Net revenues 100.00 100.00 100.00 100.00 100.00 100.00
Cost of goods sold -49.53 -50.64 -53.47 -58.64 -60.06 -65.20
Gross profit 50.47% 49.36% 46.53% 41.36% 39.94% 34.80%
Selling, general and administrative expenses -30.35 -24.69 -30.14 -27.66 -28.40 -29.41
Income from operations 20.11% 24.67% 16.39% 13.70% 11.54% 5.38%
Interest expense -4.23 -1.78 -2.48 -3.34 -3.03 -2.59
Interest income 1.07 0.05 0.05 0.05 0.03 0.02
Interest expense, net -3.15% -1.73% -2.43% -3.29% -3.00% -2.56%
(Gain) loss on extinguishment of debt -4.72 -0.78 0.01 -0.24 -0.04 -0.20
Goodwill and tradename impairment 0.00 0.00 -0.72 0.00 -1.28 -1.38
Other expense, net 0.00 -0.07 0.00 0.00 0.00 0.00
Other expenses -7.88% -2.58% -3.14% -3.54% -4.31% -4.15%
Income before income taxes and equity method investments 12.24% 22.09% 13.25% 10.17% 7.23% 1.24%
Income tax (expense) benefit 2.54 -3.55 -3.67 -1.84 -1.22 -1.15
Income before equity method investments 14.78% 18.54% 9.57% 8.32% 6.01% 0.09%
Share of equity method investments losses -0.06 -0.22 -0.03 0.00 0.00 0.00
Net income 14.72% 18.32% 9.54% 8.32% 6.01% 0.09%

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).

The financial performance from 2018 to 2023 is characterized by a sustained expansion of gross margins and a significant overall increase in net profitability, despite a recent contraction in operating margins and an increase in non-operating expenses.

Gross Margin Expansion
A consistent and significant improvement in gross profit margins is observed, rising from 34.80% in 2018 to 50.47% in 2023. This trend is driven by a steady reduction in the cost of goods sold, which declined from 65.20% of net revenues to 49.53% over the same period. This suggests enhanced pricing power or improved supply chain efficiencies.
Operating Performance and Efficiency
Income from operations experienced a strong upward trajectory for the majority of the period, peaking at 24.67% of net revenues in 2022, compared to 5.38% in 2018. However, a decline to 20.11% occurred in 2023. This volatility is partially attributed to fluctuations in selling, general, and administrative expenses, which remained relatively stable between 24.69% and 30.35% but saw a notable increase to 30.35% in the final year of the analysis.
Non-Operating Expenses and Debt Impact
Net interest expenses remained relatively stable until 2023, where interest expense as a percentage of revenue peaked at 4.23%, although this was partially offset by a significant increase in interest income to 1.07%. A substantial impact was noted in 2023 regarding the loss on extinguishment of debt, which reached 4.72% of net revenues, contributing to a broader spike in other expenses that totaled 7.88% of revenues in the final year.
Net Income Trends
Net income exhibited a strong growth trend, moving from a marginal 0.09% of net revenues in 2018 to a peak of 18.32% in 2022. While net income decreased to 14.72% in 2023, the decline was mitigated by a significant income tax benefit of 2.54% of net revenues, which offset the increased operational and debt-related costs.

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