Name: RH (NYSE:RH) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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RH, consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018
Accounts payable	166,082)	242,035)	224,906)	180,714)	183,039)	195,313)
Accrued compensation	76,650)	96,859)	84,860)	64,659)	64,192)	47,534)
Accrued occupancy	28,830)	28,088)	17,671)	12,067)	10,784)	8,612)
Accrued sales taxes	18,900)	24,811)	23,706)	19,618)	18,354)	19,525)
Accrued freight and duty	17,497)	21,888)	29,754)	25,170)	20,787)	23,757)
Accrued interest	14,456)	5,185)	—)	—)	—)	—)
Accrued legal reserves	8,921)	1,398)	—)	—)	—)	—)
Accrued professional fees	7,447)	5,892)	5,383)	4,381)	2,050)	3,555)
Accrued catalog costs	4,596)	4,127)	4,354)	8,267)	10,276)	9,000)
Other accrued expenses	31,570)	12,096)	19,401)	15,433)	10,959)	11,469)
Deferred consideration for asset purchase	—)	—)	14,387)	—)	—)	—)
Accounts payable and accrued expenses	374,949)	442,379)	424,422)	330,309)	320,441)	318,765)
Deferred revenue and customer deposits	325,754)	387,933)	280,641)	162,433)	152,595)	149,404)
Convertible senior notes due 2024, net	—)	3,600)	—)	—)	—)	—)
Convertible senior notes due 2023, net	1,696)	9,389)	2,354)	—)	—)	—)
Convertible senior notes due 2020, net	—)	—)	—)	290,532)	—)	—)
Convertible senior notes due 2019, net	—)	—)	—)	—)	343,789)	—)
Current operating lease liabilities	80,384)	73,834)	71,524)	58,924)	—)	—)
Unredeemed gift card and merchandise credit liability	26,733)	22,712)	19,173)	16,625)	17,192)	24,138)
Current portion of term loans	25,000)	20,000)	—)	—)	—)	—)
Allowance for sales returns	20,747)	25,256)	25,559)	19,206)	19,821)	10,565)
Current finance lease liabilities	17,007)	15,511)	14,671)	9,188)	1,074)	471)
Foreign tax payable	4,365)	—)	—)	—)	—)	—)
Current portion of equipment promissory notes	1,160)	13,625)	22,747)	22,009)	892)	6,033)
Federal and state tax payable	—)	31,364)	49,539)	13,591)	—)	5,391)
Promissory notes on asset under construction	—)	—)	—)	53,000)	—)	—)
Provision for legal settlement	—)	—)	—)	—)	50,000)	—)
Other current liabilities	8,178)	18,155)	11,002)	7,095)	12,368)	4,568)
Other current liabilities	103,190)	146,623)	142,691)	140,714)	101,347)	51,166)
Current liabilities	885,973)	1,063,758)	921,632)	982,912)	918,172)	519,335)
Asset based credit facility	—)	—)	—)	—)	57,500)	199,970)
Term loan B, net	1,936,529)	1,953,203)	—)	—)	—)	—)
Term loan B-2, net	469,245)	—)	—)	—)	—)	—)
Term loan, net	—)	—)	—)	—)	—)	79,499)
Real estate loans	17,909)	—)	—)	—)	—)	—)
Convertible senior notes due 2024, net	41,724)	184,461)	281,454)	264,982)	—)	—)
Convertible senior notes due 2023, net	—)	59,002)	282,956)	266,658)	249,151)	—)
Convertible senior notes due 2020, net	—)	—)	—)	—)	271,157)	252,994)
Convertible senior notes due 2019, net	—)	—)	—)	—)	—)	327,731)
Non-current operating lease liabilities	505,809)	540,513)	448,169)	409,930)	—)	—)
Non-current finance lease liabilities	653,050)	560,550)	485,481)	442,988)	7,720)	7,509)
Deferred tax liabilities	6,315)	—)	—)	—)	—)	—)
Financing obligations under build-to-suit lease transactions	—)	—)	—)	—)	228,928)	229,323)
Deferred rent and lease incentives	—)	—)	—)	—)	53,742)	54,983)
Unrecognized tax benefits	2,962)	3,471)	3,114)	3,020)	2,992)	3,728)
Non-current portion of equipment promissory notes, net	—)	1,129)	14,614)	31,053)	—)	—)
Other non-current obligations	5,112)	4,106)	9,406)	25,500)	39,634)	65,130)
Deferred payroll taxes	—)	—)	4,461)	—)	—)	—)
Other non-current obligations	8,074)	8,706)	31,595)	59,573)	42,626)	68,858)
Non-current liabilities	3,638,655)	3,306,435)	1,529,655)	1,444,131)	910,824)	1,220,867)
Total liabilities	4,524,628)	4,370,193)	2,451,287)	2,427,043)	1,828,996)	1,740,202)
Preferred stock, $0.0001 par value per share, no shares issued or outstanding	—)	—)	—)	—)	—)	—)
Common stock, $0.0001 par value per share	2)	2)	2)	2)	2)	2)
Additional paid-in capital	247,076)	620,577)	581,897)	430,662)	356,422)	860,288)
Accumulated other comprehensive income (loss)	(2,403)	(1,410)	2,565)	(2,760)	(2,333)	(171)
Retained earnings (accumulated deficit)	539,986)	551,108)	(137,438)	(409,253)	(376,810)	152,394)
Treasury stock, at cost	—)	—)	—)	—)	(243)	(1,019,849)
Stockholders’ equity (deficit)	784,661)	1,170,277)	447,026)	18,651)	(22,962)	(7,336)
Total liabilities and stockholders’ equity (deficit)	5,309,289)	5,540,470)	2,898,313)	2,445,694)	1,806,034)	1,732,866)

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).

A significant expansion of the balance sheet is observed between February 2018 and January 2023, characterized by a substantial increase in total liabilities and a volatile but ultimately positive shift in stockholders' equity. Total liabilities grew from approximately 1.74 billion USD in 2018 to 4.52 billion USD by 2023, reflecting a strategic shift in financing and the recognition of long-term lease obligations.

Current Liabilities and Operational Obligations: Current liabilities peaked in January 2022 at 1.06 billion USD before moderating to 886 million USD in January 2023. A notable trend is found in deferred revenue and customer deposits, which increased from 149 million USD in 2018 to a peak of 388 million USD in 2022, suggesting an increase in customer prepayments and order volumes. Accounts payable and accrued expenses showed a general upward trend through 2022, reaching 442 million USD, before declining to 375 million USD in 2023.
Long-Term Debt and Financing Structure: The composition of non-current liabilities underwent a fundamental transformation. The company transitioned from a reliance on convertible senior notes—which were prevalent between 2018 and 2021—to a heavy reliance on term loans. Specifically, Term Loan B was introduced in 2022 with a balance of 1.95 billion USD, and Term Loan B-2 added 469 million USD by 2023. This represents a shift toward traditional bank debt. Simultaneously, lease liabilities grew substantially; non-current finance lease liabilities rose from 7.5 million USD in 2018 to 653 million USD in 2023, likely reflecting both expansion and the adoption of new accounting standards for lease recognition.
Stockholders' Equity and Retained Earnings: The equity position evolved from a deficit of 7.3 million USD in 2018 to a peak of 1.17 billion USD in 2022, ending at 785 million USD in 2023. This recovery was driven primarily by a reversal in retained earnings, which shifted from an accumulated deficit of 409 million USD in 2020 to a positive balance of 540 million USD by 2023, indicating a period of significant profitability. The volatility in additional paid-in capital and the disappearance of treasury stock after 2018 further suggest active capital management and restructuring of the equity base.
Overall Solvency and Leverage Trends: While total stockholders' equity improved significantly from the 2018-2019 deficit period, the total liability load increased by approximately 159% over the analyzed period. The balance sheet reflects a highly leveraged capital structure, where the growth in equity is outweighed by the scale of the long-term debt and lease obligations, particularly following the massive increase in term loans since 2022.

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