Return on Equity (ROE)
since 2013
Calculation
RH, ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss)1 | ÷ | Stockholders’ equity (deficit)1 | |
|---|---|---|---|---|---|---|---|
| Jan 28, 2023 | 67.37% | = | 100 | × | 528,642) | ÷ | 784,661) |
| Jan 29, 2022 | 58.84% | = | 100 | × | 688,546) | ÷ | 1,170,277) |
| Jan 30, 2021 | 60.81% | = | 100 | × | 271,815) | ÷ | 447,026) |
| Feb 1, 2020 | 1,181.57% | = | 100 | × | 220,375) | ÷ | 18,651) |
| Feb 2, 2019 | — | = | 100 | × | 150,639) | ÷ | (22,962) |
| Feb 3, 2018 | — | = | 100 | × | 2,180) | ÷ | (7,336) |
| Jan 28, 2017 | 0.59% | = | 100 | × | 5,401) | ÷ | 919,869) |
| Jan 30, 2016 | 10.28% | = | 100 | × | 91,103) | ÷ | 886,160) |
| Jan 31, 2015 | 12.95% | = | 100 | × | 91,002) | ÷ | 702,916) |
| Feb 1, 2014 | 3.34% | = | 100 | × | 18,195) | ÷ | 545,272) |
| Feb 2, 2013 | -2.83% | = | 100 | × | (12,789) | ÷ | 451,611) |
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
Financial performance between 2013 and 2023 is characterized by significant volatility in both net income and stockholders' equity, leading to erratic fluctuations in Return on Equity (ROE).
- Net Income Trends
- Net income transitioned from a loss of $12.7 million in 2013 to a period of stability between 2015 and 2016, with earnings hovering around $91 million. A sharp decline occurred in 2017 and 2018, where net income dropped to $5.4 million and $2.1 million, respectively. From 2019 onward, a period of aggressive growth was observed, with net income peaking at $688.5 million in 2022 before moderating to $528.6 million in 2023.
- Equity Position and Volatility
- Stockholders' equity grew consistently from 2013 through 2017, reaching $919.8 million. However, a critical shift occurred in 2018 and 2019, during which the company entered a deficit position, with equity falling to negative $7.3 million and negative $22.9 million. A recovery began in 2020, leading to a rapid expansion of the equity base that peaked at $1.17 billion in 2022, followed by a contraction to $784.6 million in 2023.
- Return on Equity (ROE) Interpretation
- The ROE trajectory is divided into three distinct phases. In the first phase (2013-2017), ROE moved from -2.83% to a peak of 12.95% before falling to 0.59%. The second phase (2018-2019) shows no recorded ROE, coinciding with the period of negative stockholders' equity. The third phase (2020-2023) began with an anomalous spike to 1,181.57% in 2020, a mathematical result of high net income against a very small positive equity base. Subsequently, ROE normalized but remained exceptionally high, stabilizing between 58.84% and 67.37% from 2021 through 2023.
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Comparison to Competitors
RH, ROE, long-term trends, comparison to competitors
| RH | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | TJX Cos. Inc. | |
|---|---|---|---|---|---|
| Jan 28, 2023 | 67.37% | 15.07% | 1,095.07% | — | 54.97% |
| Jan 29, 2022 | 58.84% | -1.86% | — | — | 54.69% |
| Jan 30, 2021 | 60.81% | 24.13% | 390.00% | 406.05% | 1.55% |
| Feb 1, 2020 | 1,181.57% | 22.84% | — | 217.09% | 55.01% |
| Feb 2, 2019 | — | 18.67% | — | 63.50% | 60.61% |
| Feb 3, 2018 | — | 23.13% | 593.54% | 58.69% | 50.66% |
| Jan 28, 2017 | 0.59% | 10.95% | 183.64% | 48.07% | 50.95% |
| Jan 30, 2016 | 10.28% | 12.29% | 110.97% | 33.26% | 52.88% |
| Jan 31, 2015 | 12.95% | 4.45% | 68.06% | 27.07% | 51.95% |
| Feb 1, 2014 | 3.34% | -2.24% | 43.00% | 19.29% | 50.53% |
| Feb 2, 2013 | -2.83% | 2.81% | 25.51% | 14.14% | 52.01% |
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, ROE, long-term trends, comparison to sector (consumer discretionary distribution & retail)
| RH | Consumer Discretionary Distribution & Retail | |
|---|---|---|
| Jan 28, 2023 | 67.37% | 29.39% |
| Jan 29, 2022 | 58.84% | 17.48% |
| Jan 30, 2021 | 60.81% | 35.05% |
| Feb 1, 2020 | 1,181.57% | 40.86% |
| Feb 2, 2019 | — | 40.77% |
| Feb 3, 2018 | — | 44.19% |
| Jan 28, 2017 | 0.59% | 38.11% |
| Jan 30, 2016 | 10.28% | 37.81% |
| Jan 31, 2015 | 12.95% | 32.09% |
| Feb 1, 2014 | 3.34% | 24.32% |
| Feb 2, 2013 | -2.83% | 19.26% |
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, ROE, long-term trends, comparison to industry (consumer discretionary)
| RH | Consumer Discretionary | |
|---|---|---|
| Jan 28, 2023 | 67.37% | 29.93% |
| Jan 29, 2022 | 58.84% | 20.78% |
| Jan 30, 2021 | 60.81% | 33.71% |
| Feb 1, 2020 | 1,181.57% | 24.49% |
| Feb 2, 2019 | — | 34.62% |
| Feb 3, 2018 | — | 34.33% |
| Jan 28, 2017 | 0.59% | 22.85% |
| Jan 30, 2016 | 10.28% | 28.74% |
| Jan 31, 2015 | 12.95% | 29.03% |
| Feb 1, 2014 | 3.34% | 20.60% |
| Feb 2, 2013 | -2.83% | 20.34% |
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).