Return on Assets (ROA)
since 2013
Calculation
RH, ROA, long-term trends, calculation
| ROA | = | 100 | × | Net income (loss)1 | ÷ | Total assets1 | |
|---|---|---|---|---|---|---|---|
| Jan 28, 2023 | 9.96% | = | 100 | × | 528,642) | ÷ | 5,309,289) |
| Jan 29, 2022 | 12.43% | = | 100 | × | 688,546) | ÷ | 5,540,470) |
| Jan 30, 2021 | 9.38% | = | 100 | × | 271,815) | ÷ | 2,898,313) |
| Feb 1, 2020 | 9.01% | = | 100 | × | 220,375) | ÷ | 2,445,694) |
| Feb 2, 2019 | 8.34% | = | 100 | × | 150,639) | ÷ | 1,806,034) |
| Feb 3, 2018 | 0.13% | = | 100 | × | 2,180) | ÷ | 1,732,866) |
| Jan 28, 2017 | 0.25% | = | 100 | × | 5,401) | ÷ | 2,192,520) |
| Jan 30, 2016 | 4.36% | = | 100 | × | 91,103) | ÷ | 2,088,472) |
| Jan 31, 2015 | 5.96% | = | 100 | × | 91,002) | ÷ | 1,525,999) |
| Feb 1, 2014 | 1.77% | = | 100 | × | 18,195) | ÷ | 1,025,103) |
| Feb 2, 2013 | -1.62% | = | 100 | × | (12,789) | ÷ | 789,613) |
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), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).
1 US$ in thousands
Analysis of the financial performance from February 2013 to January 2023 reveals a cyclical progression of profitability and asset utilization, characterized by an initial recovery phase, a period of significant contraction, and a subsequent phase of aggressive expansion.
- Return on Assets (ROA) Trends
- The ROA exhibited notable volatility over the eleven-year period. After starting at -1.62% in 2013, the ratio improved to a mid-term peak of 5.96% in 2015. A sharp decline followed between 2017 and 2018, with the ratio falling to 0.25% and 0.13% respectively, indicating a period of minimal efficiency in generating profit from the asset base. A sustained recovery began in 2019, with the ROA climbing steadily to reach a peak of 12.43% in 2022, before moderating to 9.96% in 2023.
- Net Income Dynamics
- Profitability transitioned from a net loss of US$ 12.79 million in 2013 to substantial positive returns. A significant period of instability is observed in 2017 and 2018, where net income dropped to US$ 5.40 million and US$ 2.18 million. This was followed by a phase of exponential growth starting in 2019, during which net income rose from US$ 150.64 million to a peak of US$ 688.55 million in 2022, reflecting a substantial increase in the company's earning capacity.
- Asset Base Evolution
- Total assets grew from US$ 789.61 million in 2013 to US$ 5.31 billion in 2023. The most aggressive expansion occurred between 2021 and 2022, where total assets increased from US$ 2.90 billion to US$ 5.54 billion. The synchronization of this asset growth with the surge in net income during the 2019-2022 period accounts for the significant improvement in asset productivity observed during those years.
- Correlation Between Growth and Efficiency
- The data indicates that while asset growth was relatively steady in the early years, the leap in efficiency occurred when net income growth began to outpace asset expansion starting in 2019. The decline in ROA during 2017-2018 was driven by a collapse in net income rather than a reduction in assets, as total assets remained above US$ 1.7 billion during that window.
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Comparison to Competitors
RH, ROA, long-term trends, comparison to competitors
| RH | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | TJX Cos. Inc. | |
|---|---|---|---|---|---|
| Jan 28, 2023 | 9.96% | 5.76% | 22.38% | 14.73% | 12.34% |
| Jan 29, 2022 | 12.43% | -0.59% | 22.86% | 18.91% | 11.53% |
| Jan 30, 2021 | 9.38% | 7.93% | 18.23% | 12.49% | 0.29% |
| Feb 1, 2020 | 9.01% | 6.64% | 21.94% | 10.85% | 13.55% |
| Feb 2, 2019 | 8.34% | 5.14% | 25.27% | 6.71% | 21.36% |
| Feb 3, 2018 | 0.13% | 6.19% | 19.38% | 9.77% | 18.55% |
| Jan 28, 2017 | 0.25% | 2.31% | 18.52% | 8.99% | 17.84% |
| Jan 30, 2016 | 4.36% | 2.84% | 16.47% | 8.14% | 19.81% |
| Jan 31, 2015 | 5.96% | 0.91% | 15.88% | 8.48% | 19.91% |
| Feb 1, 2014 | 1.77% | -0.44% | 13.29% | 6.98% | 20.95% |
| Feb 2, 2013 | -1.62% | 0.68% | 11.04% | 6.00% | 20.05% |
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), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).
Comparison to Sector (Consumer Discretionary Distribution & Retail)
RH, ROA, long-term trends, comparison to sector (consumer discretionary distribution & retail)
| RH | Consumer Discretionary Distribution & Retail | |
|---|---|---|
| Jan 28, 2023 | 9.96% | 8.50% |
| Jan 29, 2022 | 12.43% | 4.19% |
| Jan 30, 2021 | 9.38% | 9.17% |
| Feb 1, 2020 | 9.01% | 9.20% |
| Feb 2, 2019 | 8.34% | 8.83% |
| Feb 3, 2018 | 0.13% | 9.65% |
| Jan 28, 2017 | 0.25% | 7.39% |
| Jan 30, 2016 | 4.36% | 8.42% |
| Jan 31, 2015 | 5.96% | 7.99% |
| Feb 1, 2014 | 1.77% | 6.94% |
| Feb 2, 2013 | -1.62% | 7.03% |
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), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).
Comparison to Industry (Consumer Discretionary)
RH, ROA, long-term trends, comparison to industry (consumer discretionary)
| RH | Consumer Discretionary | |
|---|---|---|
| Jan 28, 2023 | 9.96% | 7.57% |
| Jan 29, 2022 | 12.43% | 4.81% |
| Jan 30, 2021 | 9.38% | 7.99% |
| Feb 1, 2020 | 9.01% | 4.36% |
| Feb 2, 2019 | 8.34% | 5.57% |
| Feb 3, 2018 | 0.13% | 5.96% |
| Jan 28, 2017 | 0.25% | 4.05% |
| Jan 30, 2016 | 4.36% | 5.57% |
| Jan 31, 2015 | 5.96% | 6.25% |
| Feb 1, 2014 | 1.77% | 4.75% |
| Feb 2, 2013 | -1.62% | 5.52% |
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), 10-K (reporting date: 2017-01-28), 10-K (reporting date: 2016-01-30), 10-K (reporting date: 2015-01-31), 10-K (reporting date: 2014-02-01), 10-K (reporting date: 2013-02-02).