Segment Reporting (Tables)

3 Months Ended

May 02, 2020

Segment Reporting

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

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

	Three Months Ended
	May 2,						May 4,
	2020						2019
	RH Segment		Waterworks		Total		RH Segment		Waterworks		Total
Net revenues	$	454,957	$	27,938	$	482,895	$	563,706	$	34,715	$	598,421
Gross profit		187,762		11,892		199,654		217,943		14,871		232,814
Depreciation and amortization		23,717		1,153		24,870		26,004		1,185		27,189

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):

	May 2,						February 1,
	2020						2020
	RH Segment		Waterworks		Total		RH Segment		Waterworks		Total
Goodwill (1)	$	124,290	$	—	$	124,290	$	124,367	$	—	$	124,367
Tradenames, trademarks and domain names (2)		48,563		17,000		65,563		48,563		37,459		86,022
Total assets		2,310,111		119,782		2,429,893		2,301,823		143,871		2,445,694

(1) The Waterworks reporting unit goodwill of $51.1 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018, 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 $35.1 million, with $20.5 million recorded in the three months ended May 2, 2020 and $14.6 million recorded in fiscal 2018. Refer to “Waterworks Tradename Impairment” within Note 4—Goodwill, Trademarks, Trademarks and Domain Names.

Schedule of Segment Operating Income and Income Before Income Taxes

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

	Three Months Ended
	May 2,		May 4,
	2020		2019
Operating income (loss):
RH Segment	$	49,517	$	69,400
Waterworks		(1,450)		1,094
Asset impairments and change in useful lives		(8,471)		(3,476)
Reorganization related costs		(4,143)		—
Recall accrual		—		1,615
Income from operations		35,453		68,633
Interest expense—net		19,629		21,118
Tradename impairment		20,459		—
Income (loss) before income taxes	$	(4,635)	$	47,515

Net Revenues

We classify our sales into furniture and non-furniture product lines. Furniture includes both indoor and outdoor furniture. Non-furniture includes lighting, textiles, fittings, fixtures, surfaces, accessories and home décor, as well as hospitality. Net revenues in each category were as follows (in thousands):

	Three Months Ended
	May 2,		May 4,
	2020		2019
Furniture	$	316,779	$	396,698
Non-furniture		166,116		201,723
Total net revenues	$	482,895	$	598,421