XML 46 R33.htm IDEA: XBRL DOCUMENT

LEASES (Tables)

6 Months Ended

Aug. 03, 2024

LEASES

Summary of lease costs-net


			THREE MONTHS ENDED						SIX MONTHS ENDED
			AUGUST 3,			JULY 29,			AUGUST 3,			JULY 29,
			2024			2023			2024			2023

			(in thousands)
Operating lease cost⁽¹⁾			$	33,357		$	27,454		$	66,238		$	53,754
Finance lease costs
Amortization of leased assets⁽¹⁾				12,913			13,641			25,318			27,345
Interest on lease liabilities⁽²⁾				7,922			8,794			15,329			17,280
Variable lease costs⁽³⁾				6,478			5,997			13,121			12,165
Sublease income⁽⁴⁾				(1,179)			(1,420)			(2,333)			(2,966)
Total lease costs—net			$	59,491		$	54,466		$	117,673		$	107,578

(1)	Operating lease costs and amortization of finance lease right-of-use assets are included in cost of goods sold or selling, general and administrative expenses on the condensed consolidated statements of income based on our accounting policy.

(2)	Included in interest expense—net on the condensed consolidated statements of income.

(3)

Represents variable lease payments under operating and finance lease agreements, primarily associated with contingent rent based on a percentage of retail sales over contractual levels of $3.6 million and $3.7 million for the three months ended August 3, 2024 and July 29, 2023, respectively, and $7.5 million and $7.6 million for the six months ended August 3, 2024 and July 29, 2023, respectively, as well as charges associated with common area maintenance of $2.9 million and $2.3 million for the three months ended August 3, 2024 and July 29, 2023, respectively, and $5.6 million and $4.6 million for the six months ended August 3, 2024 and July 29, 2023, respectively. Other variable costs, which include single lease cost related to variable lease payments based on an index or rate that were not included in the measurement of the initial lease liability and right-of-use asset, were not material in any period presented.

(4)	Included in selling, general and administrative expenses on the condensed consolidated statements of income.

Summary of lease right-of-use assets and lease liabilities


				AUGUST 3,			FEBRUARY 3,
				2024			2024

				(in thousands)
		Balance Sheet Classification
Assets
Operating leases		Operating lease right-of-use assets		$	624,641		$	625,801
Finance leases^(1)(2)(3)		Property and equipment—net			877,301			836,814
Total lease right-of-use assets				$	1,501,942		$	1,462,615
Liabilities
Current⁽⁴⁾
Operating leases		Operating lease liabilities		$	86,106		$	85,523
Finance leases		Other current liabilities			15,755			14,668
Total lease liabilities—current					101,861			100,191
Non-current
Operating leases		Non-current operating lease liabilities			573,204			576,166
Finance leases		Non-current finance lease liabilities			584,677			566,829
Total lease liabilities—non-current					1,157,881			1,142,995
Total lease liabilities				$	1,259,742		$	1,243,186

(1)	Includes capitalized amounts related to our completed construction activities to design and build leased assets, which are reclassified from other non-current assets upon lease commencement.

(2)	Recorded net of accumulated amortization of $293 million and $268 million as of August 3, 2024 and February 3, 2024, respectively.

(3)	Includes $36 million and $37 million as of August 3, 2024 and February 3, 2024, respectively, related to an RH Design Gallery lease with a landlord that is an affiliate of the managing member of the Aspen LLCs. Refer to Note 5—Variable Interest Entities.

(4)	Current portion of lease liabilities represents the reduction of the related lease liability over the next 12 months.

Summary of maturities of lease liabilities

The maturities of lease liabilities are as follows as of August 3, 2024:


				OPERATING			FINANCE
FISCAL YEAR				LEASES			LEASES			TOTAL

				(in thousands)
Remainder of fiscal 2024				$	53,793		$	20,615		$	74,408
2025					124,837			50,533			175,370
2026					116,388			51,300			167,688
2027					109,207			52,107			161,314
2028					75,534			51,292			126,826
2029					63,793			50,799			114,592
Thereafter					339,049			745,649			1,084,698
Total lease payments⁽¹⁾⁽²⁾					882,601			1,022,295			1,904,896
Less—imputed interest⁽³⁾					(223,291)			(421,863)			(645,154)
Present value of lease liabilities				$	659,310		$	600,432		$	1,259,742

(1)

Total lease payments include future obligations for renewal options that are reasonably certain to be exercised and are included in the measurement of the lease liability. Total lease payments exclude $727 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of August 3, 2024, of which $14 million, $40 million, $38 million, $40 million, $41 million and $44 million will be paid in the remainder of fiscal 2024, fiscal 2025, fiscal 2026, fiscal 2027, fiscal 2028 and fiscal 2029, respectively, and $510 million will be paid subsequent to fiscal 2029.

(2)	Excludes an immaterial amount of future commitments under short-term lease agreements.

(3)	Calculated using the discount rate for each lease at lease commencement.

Summary of supplemental information related to leases


			SIX MONTHS ENDED
			AUGUST 3,				JULY 29,
			2024				2023
Weighted-average remaining lease term (years)
Operating leases				8.9				8.1
Finance leases				19.7				21.5
Weighted-average discount rate
Operating leases				5.5	%			4.3	%
Finance leases				5.3	%			5.3	%

Summary of other information related to leases


			SIX MONTHS ENDED
			AUGUST 3,			JULY 29,
			2024			2023

			(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases			$	(64,645)		$	(53,745)
Operating cash flows from finance leases				(15,329)			(17,280)
Financing cash flows from finance leases—net⁽¹⁾				(11,957)			(5,454)
Total cash outflows from leases			$	(91,931)		$	(76,479)
Non-cash transactions:
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations
Operating leases			$	45,747		$	45,219
Finance leases				28,278			750
Reclassification from other non-current assets to finance lease right-of-use assets				38,182			—

(1)	Represents the principal portion of lease payments, partially offset by tenant allowances received subsequent to lease commencement of $2.4 million for the six months ended July 29, 2023. No such amounts were received from landlords during the six months ended August 3, 2024.