Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data
RH, common-size consolidated balance sheet: liabilities and stockholders’ equity (quarterly data)
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 capital structure exhibits a significant transition from a period of extreme leverage and equity deficits toward a more stabilized financial position. Between 2017 and 2019, the entity experienced sustained periods of negative stockholders' equity, with total liabilities frequently exceeding 100% of total assets and equity. This instability peaked in mid-2019 before a consistent recovery phase began, characterized by the restoration of positive retained earnings and a reduction in the relative weight of total liabilities, which settled between 78% and 85% by early 2023.
- Debt Composition and Refinancing Trends
- A fundamental shift in long-term funding strategy is observed. The period between 2017 and 2021 was characterized by heavy reliance on convertible senior notes, with various tranches due in 2019, 2020, 2023, and 2024 constituting a substantial portion of non-current liabilities. Beginning in late 2021, there was a marked transition toward term loan financing. Term Loan B emerged as a primary funding source, maintaining a weight of approximately 33% to 36% of the total balance sheet through April 2023, complemented by the introduction of Term Loan B-2 in late 2022 at approximately 8%.
- Equity and Retained Earnings Recovery
- Stockholders' equity underwent a volatile cycle, moving from 31.96% in April 2017 to a deficit reaching -9.72% by May 2019. This decline was mirrored by retained earnings, which shifted from positive values to a peak deficit of -22.20% in August 2019. A subsequent recovery trend saw retained earnings return to positive territory by July 2021, ending at 10.94% in April 2023. This trajectory indicates a transition from accumulated losses to a strengthened internal capital base.
- Management of Short-Term Obligations
- Current liabilities exhibited significant volatility, peaking at 50.84% in February 2019 before entering a long-term downward trend. By April 2023, current liabilities were reduced to 16.01% of the total balance sheet. Accounts payable and accrued expenses, a primary component of these obligations, decreased from a peak of 18.40% in February 2018 to 6.05% by April 2023, suggesting a reduction in short-term operating leverage.
- Lease and Other Non-Current Obligations
- Non-current operating and finance lease liabilities were highly prominent between 2019 and 2021, with each often representing 15% to 18% of the total capital structure. Over the subsequent period, these obligations decreased and stabilized, with non-current operating leases settling around 9.48% and finance leases around 12.20% by April 2023. Additionally, financing obligations under build-to-suit lease transactions, which were significant in 2017 (peaking at 13.23%), were eliminated entirely by May 2019.
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