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LEASES (Tables)

12 Months Ended

Feb. 01, 2025

LEASES

Summary of lease costs-net


		YEAR ENDED
		FEBRUARY 1,			FEBRUARY 3,			JANUARY 28,
		2025			2024			2023

		(in thousands)
Operating lease cost⁽¹⁾		$	132,377		$	116,553		$	100,646
Finance lease costs
Amortization of leased assets⁽¹⁾			52,725			54,596			52,346
Interest on lease liabilities⁽²⁾			31,896			33,822			32,051
Variable lease costs⁽³⁾			24,565			23,517			27,848
Sublease income⁽⁴⁾			(4,701)			(5,544)			(4,455)
Total lease costs—net		$	236,862		$	222,944		$	208,436

(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 consolidated statements of income based on our accounting policy. Refer to Note 3—Significant Accounting Policies.

(2)	Included in interest expense—net on the 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 $14 million, $14 million and $19 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively, as well as charges associated with common area maintenance of $11 million, $9.1 million and $9.3 million in fiscal 2024, fiscal 2023 and fiscal 2022, 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 consolidated statements of income.

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


				FEBRUARY 1,			FEBRUARY 3,
				2025			2024

				(in thousands)
		Balance Sheet Classification
Assets
Operating leases		Operating lease right-of-use assets		$	617,103		$	625,801
Finance leases^(1)(2)(3)		Property and equipment—net			1,007,088			836,814
Total lease right-of-use assets				$	1,624,191		$	1,462,615
Liabilities
Current⁽⁴⁾
Operating leases		Operating lease liabilities		$	100,944		$	85,523
Finance leases		Other current liabilities			21,135			14,668
Total lease liabilities—current					122,079			100,191
Non-current
Operating leases		Non-current operating lease liabilities			573,468			576,166
Finance leases		Non-current finance lease liabilities			630,655			566,829
Total lease liabilities—non-current					1,204,123			1,142,995
Total lease liabilities				$	1,326,202		$	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 $320 million and $268 million as of February 1, 2025 and February 3, 2024, respectively.

(3)	Includes $35 million and $37 million as of February 1, 2025 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 7—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 were as follows as of February 1, 2025:


				OPERATING			FINANCE
FISCAL YEAR				LEASES			LEASES			TOTAL

				(in thousands)
2025				$	133,569		$	54,991		$	188,560
2026					127,383			55,758			183,141
2027					116,486			56,564			173,050
2028					82,354			55,749			138,103
2029					70,506			55,439			125,945
Thereafter					394,421			888,434			1,282,855
Total lease payments⁽¹⁾⁽²⁾					924,719			1,166,935			2,091,654
Less—imputed interest⁽³⁾					(250,307)			(515,145)			(765,452)
Present value of lease liabilities				$	674,412		$	651,790		$	1,326,202

(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 $884 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of February 1, 2025, of which $40 million, $41 million, $48 million, $50 million and $53 million will be paid in fiscal 2025, fiscal 2026, fiscal 2027, fiscal 2028 and fiscal 2029, respectively, and $652 million will be paid subsequent to fiscal 2029.

(2)	Excludes an immaterial amount of future commitments under short-term lease agreements as of February 1, 2025.

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

Summary of supplemental information related to leases


			FEBRUARY 1,				FEBRUARY 3,
			2025				2024


Weighted-average remaining lease term (years)
Operating leases				9.1				8.7
Finance leases				20.2				19.7
Weighted-average discount rate
Operating leases				5.8	%			5.2	%
Finance leases				5.8	%			5.1	%

Summary of other information related to leases


		YEAR ENDED
		FEBRUARY 1,			FEBRUARY 3,			JANUARY 28,
		2025			2024			2023

		(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases		$	(121,128)		$	(122,220)		$	(101,513)
Operating cash flows from finance leases			(28,028)			(37,819)			(32,090)
Financing cash flows from finance leases—net⁽¹⁾			(20,752)			(13,972)			(10,146)
Total cash outflows from leases		$	(169,908)		$	(174,011)		$	(143,749)
Non-cash transactions
Lease right-of-use assets obtained in exchange for lease obligations—net of lease terminations
Operating leases		$	102,387		$	170,542		$	49,702
Finance leases			85,116			1,648			109,015
Reclassification from other non-current assets to finance lease right-of-use assets			139,567			—			220,236
Reclassification of finance lease right-of-use asset to property and equipment⁽²⁾			—			188,515			—
Reclassification of finance lease liability to property and equipment⁽²⁾			—			(71,612)			—

(1)	Represents the principal portion of lease payments, partially offset by tenant allowances received subsequent to lease commencement of $4.8 million, $2.4 million and $4.7 million in fiscal 2024, fiscal 2023 and fiscal 2022 respectively.

(2)

During fiscal 2023, we purchased the building and land of our RH Guesthouse New York location and terminated the lease associated with the property. As a result, we reclassified the right-of-use asset and lease liability to property and equipment—net on the consolidated balance sheets as of the purchase date.