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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.

Common-Size Income Statement
Quarterly Data

RH, common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019 Feb 2, 2019 Nov 3, 2018 Aug 4, 2018 May 5, 2018 Feb 3, 2018 Oct 28, 2017 Jul 29, 2017 Apr 29, 2017
Net revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of goods sold -52.98 -52.18 -51.58 -47.24 -47.92 -49.54 -49.80 -50.68 -52.72 -52.60 -51.62 -53.13 -58.65 -57.43 -58.06 -58.25 -61.10 -60.84 -60.02 -57.62 -61.96 -61.41 -63.83 -66.55 -69.71
Gross profit 47.02% 47.82% 48.42% 52.76% 52.08% 50.46% 50.20% 49.32% 47.28% 47.40% 48.38% 46.87% 41.35% 42.57% 41.94% 41.75% 38.90% 39.16% 39.98% 42.38% 38.04% 38.59% 36.17% 33.45% 30.29%
Selling, general and administrative expenses -33.59 -33.29 -28.83 -29.12 -30.64 -26.34 -23.12 -24.14 -25.45 -24.80 -35.20 -27.61 -34.00 -27.38 -28.77 -27.03 -27.44 -23.77 -32.60 -29.06 -28.42 -28.28 -28.89 -31.48 -29.06
Income from operations 13.43% 14.52% 19.59% 23.64% 21.44% 24.12% 27.08% 25.18% 21.83% 22.60% 13.18% 19.25% 7.34% 15.19% 13.17% 14.72% 11.47% 15.39% 7.39% 13.32% 9.62% 10.31% 7.29% 1.97% 1.23%
Interest expense, net -5.39 -4.49 -3.62 -2.65 -2.18 -2.75 -1.31 -1.37 -1.55 -1.79 -1.85 -2.74 -4.06 -3.00 -3.18 -3.47 -3.53 -3.16 -3.04 -2.73 -3.06 -2.55 -3.19 -2.34 -2.17
Goodwill and tradename impairment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -4.24 0.00 0.00 0.00 0.00 -4.78 0.00 0.00 0.00 -5.03 0.00 0.00 0.00
(Gain) loss on extinguishment of debt 0.00 0.00 0.00 -2.37 -15.26 -0.81 -1.84 -0.32 -0.01 0.00 0.00 0.02 0.00 -0.09 -1.01 0.14 0.00 0.00 0.00 -0.14 0.00 0.00 -0.82 0.00 0.00
Other expense, net 0.09 0.62 -0.23 -0.32 0.04 -0.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other expenses -5.30% -3.87% -3.84% -5.34% -17.41% -3.87% -3.15% -1.69% -1.56% -1.79% -1.85% -2.72% -8.30% -3.09% -4.19% -3.33% -3.53% -7.94% -3.04% -2.87% -3.06% -7.57% -4.02% -2.34% -2.17%
Income (loss) before income taxes and equity method investments 8.13% 10.66% 15.75% 18.30% 4.04% 20.25% 23.93% 23.49% 20.27% 20.81% 11.32% 16.54% -0.96% 12.10% 8.98% 11.38% 7.94% 7.45% 4.34% 10.45% 6.56% 2.74% 3.27% -0.37% -0.94%
Income tax (expense) benefit -2.24 2.65 -4.16 -5.69 17.07 -3.81 -5.40 -0.30 -4.85 -4.68 -5.82 -2.66 0.29 -1.80 -1.23 -2.36 -1.97 -2.06 -0.82 -0.46 -1.53 -2.70 -1.05 -0.91 0.34
Income (loss) before equity method investments 5.88% 13.31% 11.59% 12.62% 21.11% 16.43% 18.52% 23.18% 15.42% 16.13% 5.50% 13.88% -0.67% 10.29% 7.74% 9.02% 5.97% 5.38% 3.52% 9.99% 5.03% 0.04% 2.22% -1.28% -0.60%
Share of equity method investments losses -0.22 0.53 -0.22 -0.28 -0.14 -0.15 -0.23 -0.25 -0.24 -0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net income (loss) 5.67% 13.84% 11.36% 12.33% 20.97% 16.29% 18.29% 22.93% 15.18% 16.03% 5.50% 13.88% -0.67% 10.29% 7.74% 9.02% 5.97% 5.38% 3.52% 9.99% 5.03% 0.04% 2.22% -1.28% -0.60%

Based on: 10-Q (reporting date: 2023-04-29), 10-K (reporting date: 2023-01-28), 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29).

The financial performance over the observed period is characterized by a significant long-term expansion in gross margins and operating profitability, followed by a moderate contraction in the most recent quarters. A clear trajectory of efficiency gains was evident from 2017 through early 2022, with a subsequent shift toward compressed margins in 2023.

Gross Profitability and Cost Management
A sustained improvement in gross profit margins is observed, rising from 30.29% in April 2017 to a peak of 52.76% in July 2022. This expansion was driven by a consistent reduction in the cost of goods sold, which decreased from 69.71% of net revenues to a low of 47.24% during the same peak period. However, a reversal began in late 2022, with gross profit margins declining to 47.02% by April 2023.
Operating Margin and Expense Trends
Income from operations exhibited a strong upward trend, growing from 1.23% in April 2017 to a peak of 27.08% in October 2021. Selling, general, and administrative expenses remained relatively volatile, generally fluctuating between 23% and 35% of net revenues. While operating margins remained robust through 2021, they entered a downward trend starting in 2022, falling to 13.43% by April 2023, coinciding with an increase in SG&A expenses to 33.59%.
Non-Operating Items and Net Income
Net income margins showed significant volatility, transitioning from negative values in early 2017 to a peak of 22.93% in July 2021. This volatility was influenced by sporadic goodwill and tradename impairments and significant fluctuations in debt extinguishment gains or losses, most notably a substantial impact of -15.26% in January 2022. Interest expenses also trended upward in the final year of the period, reaching 5.39% of net revenues by April 2023.
Bottom Line Trajectory
The overall profitability profile shifted from a break-even or loss-making position in 2017 to high profitability between 2020 and 2022. The net income margin reached its zenith in mid-2021 but subsequently declined, ending the period at 5.67% in April 2023. This decline reflects the combined pressure of rising cost of goods sold, increasing SG&A expenses, and higher net interest costs.

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