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Segment Reporting (Tables)

6 Months Ended

Aug. 03, 2019

Summary of Statements of Income Metrics Reviewed by CODM to Evaluate Performance Internally or As required under ASC 280 - Segment Reporting

The following tables presents the statements of income metrics reviewed by the CODM to evaluate performance internally or as required under ASC 280—Segment Reporting (in thousands):


	Three Months Ended
	August 3,						August 4,
	2019						2018
	RH Segment		Waterworks		Total		RH Segment		Waterworks		Total
Net revenues	$	672,328	$	34,186	$	706,514	$	607,604	$	33,194	$	640,798
Gross profit		280,469		14,489		294,958		255,505		12,839		268,344
Depreciation and amortization		24,170		1,151		25,321		20,236		1,118		21,354


	Six Months Ended
	August 3,						August 4,
	2019						2018
	RH Segment		Waterworks		Total		RH Segment		Waterworks		Total
Net revenues	$	1,236,034	$	68,901	$	1,304,935	$	1,133,611	$	64,593	$	1,198,204
Gross profit		498,412		29,360		527,772		451,211		26,466		477,677
Depreciation and amortization		50,174		2,336		52,510		39,709		2,230		41,939

Summary of Balance Sheet Metrics as Required Under ASC 280 - Segment Reporting

The following table presents the balance sheet metrics as required under ASC 280—Segment Reporting (in thousands):


	August 3,						February 2,
	2019						2019
	RH Segment		Waterworks		Total		RH Segment		Waterworks		Total
Goodwill ⁽¹⁾	$	124,370	$	—	$	124,370	$	124,379	$	—	$	124,379
Tradenames, trademarks and domain names ⁽²⁾		48,563		37,459		86,022		48,563		37,459		86,022
Total assets		2,240,904		146,904		2,387,808		2,273,951		149,067		2,423,018

(1)	The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of February 2, 2019, with $17.4 million and $33.7 million impairment recorded in fiscal 2018 and fiscal 2017, respectively.

(2)	The Waterworks reporting unit tradename is presented net of an impairment charge of $14.6 million recorded in fiscal 2018.

Schedule of Segment Operating Income and Income Before Income Taxes

The following table presents segment operating income and income before income taxes (in thousands):


	Three Months Ended				Six Months Ended
	August 3,		August 4,		August 3,		August 4,
	2019		2018		2019		2018
Operating income:
RH Segment	$	104,093	$	75,804	$	173,493	$	124,852
Waterworks		920		(338)		2,014		(228)
Asset impairments and change in useful lives		(2,545)		—		(6,021)		—
Recall accrual		320		1,064		1,935		1,318
Legal settlements		1,193		7,204		1,193		5,289
Reorganization related costs		—		(1,721)		—		(1,721)
Impact of inventory step-up		—		(190)		—		(380)
Reversal of loss on asset disposal		—		—		—		840
Income from operations		103,981		81,823		172,614		129,970
Interest expense—net		24,513		15,467		45,631		30,565
(Gain) loss on extinguishment of debt		(954)		917		(954)		917
Income before income taxes	$	80,422	$	65,439	$	127,937	$	98,488

Net Revenues

Net revenues in each category were as follows (in thousands):


	Three Months Ended				Six Months Ended
	August 3,		August 4,		August 3,		August 4,
	2019		2018		2019		2018
Furniture	$	485,639	$	430,196	$	882,337	$	782,842
Non-furniture		220,875		210,602		422,598		415,362
Total net revenues	$	706,514	$	640,798	$	1,304,935	$	1,198,204