Segment Reporting (Tables)

6 Months Ended

Jul. 31, 2021

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

	THREE MONTHS ENDED
	JULY 31,						AUGUST 1,
	2021						2020
	RH SEGMENT		WATERWORKS		TOTAL		RH SEGMENT		WATERWORKS		TOTAL
Net revenues	$	947,618	$	41,241	$	988,859	$	681,387	$	27,895	$	709,282
Gross profit		467,067		20,609		487,676		320,481		11,938		332,419
Depreciation and amortization		21,484		1,186		22,670		24,234		1,108		25,342

	SIX MONTHS ENDED
	JULY 31,						AUGUST 1,
	2021						2020
	RH SEGMENT		WATERWORKS		TOTAL		RH SEGMENT		WATERWORKS		TOTAL
Net revenues	$	1,767,441	$	82,210	$	1,849,651	$	1,136,344	$	55,833	$	1,192,177
Gross profit		853,620		41,033		894,653		508,243		23,830		532,073
Depreciation and amortization		44,164		2,392		46,556		47,951		2,261		50,212

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):

	JULY 31,								JANUARY 30,
	2021								2021
					REAL ESTATE								REAL ESTATE
	RH SEGMENT		WATERWORKS		DEVELOPMENT		TOTAL		RH SEGMENT		WATERWORKS		DEVELOPMENT		TOTAL
Goodwill (1)	$	141,132	$	—	$	—	$	141,132	$	141,100	$	—	$	—	$	141,100
Tradenames, trademarks and other intangible assets (2)		55,584		17,000		—		72,584		54,663		17,000		—		71,663
Equity method investments		—		—		97,412		97,412		—		—		100,603		100,603
Total assets		3,215,534		154,206		97,412		3,467,152		2,659,944		137,766		100,603		2,898,313

(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 and $14.6 million recorded in fiscal 2020 and fiscal 2018, respectively.

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
	JULY 31,		AUGUST 1,		JULY 31,		AUGUST 1,
	2021		2020		2021		2020
Operating income:
RH Segment	$	257,242	$	153,350	$	445,252	$	202,867
Waterworks		5,413		1,573		11,655		123
Non-cash compensation		(5,864)		—		(11,728)		—
Asset impairments and lease losses		(7,354)		(1,339)		(7,354)		(9,810)
Recall accrual		—		(4,780)		(500)		(4,780)
Reorganization related costs		(449)		(2,884)		(449)		(7,027)
Loss on sale leaseback transaction		—		(9,352)		—		(9,352)
Income from operations		248,988		136,568		436,876		172,021
Interest expense—net		13,581		19,418		26,889		39,047
(Gain) loss on extinguishment of debt		3,166		(152)		3,271		(152)
Tradename impairment		—		—		—		20,459
Income before income taxes	$	232,241	$	117,302	$	406,716	$	112,667

Net Revenues

	THREE MONTHS ENDED				SIX MONTHS ENDED
	JULY 31,		AUGUST 1,		JULY 31,		AUGUST 1,
	2021		2020		2021		2020
Furniture	$	699,729	$	483,205	$	1,279,740	$	795,728
Non-furniture		289,130		226,077		569,911		396,449
Total net revenues	$	988,859	$	709,282	$	1,849,651	$	1,192,177