Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
RH, profitability ratios
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | RH gross profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | RH operating profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | RH net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | RH ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
| ROA | A profitability ratio calculated as net income divided by total assets. | RH ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Gross Profit Margin
RH, gross profit margin calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 1,811,985) | 1,855,411) | 1,325,531) | 1,095,011) | 1,000,847) | 849,067) | |
| Net revenues | 3,590,477) | 3,758,820) | 2,848,626) | 2,647,437) | 2,505,653) | 2,440,174) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 50.47% | 49.36% | 46.53% | 41.36% | 39.94% | 34.80% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | 46.98% | 43.81% | 42.03% | 39.57% | 40.99% | — | |
| Home Depot Inc. | 33.53% | 33.63% | 33.95% | 34.09% | 34.34% | — | |
| Lowe’s Cos. Inc. | 33.23% | 33.30% | 33.01% | 31.80% | 32.12% | — | |
| TJX Cos. Inc. | 27.61% | 28.50% | 23.66% | 28.46% | 28.59% | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × 1,811,985 ÷ 3,590,477 = 50.47%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | RH gross profit margin ratio improved from 2021 to 2022 and from 2022 to 2023. |
Operating Profit Margin
RH, operating profit margin calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Income from operations | 722,157) | 927,181) | 466,858) | 362,831) | 289,230) | 131,301) | |
| Net revenues | 3,590,477) | 3,758,820) | 2,848,626) | 2,647,437) | 2,505,653) | 2,440,174) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 20.11% | 24.67% | 16.39% | 13.70% | 11.54% | 5.38% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | 6.41% | 2.38% | 5.30% | 5.93% | 5.18% | — | |
| Home Depot Inc. | 15.27% | 15.24% | 13.84% | 14.37% | 14.35% | — | |
| Lowe’s Cos. Inc. | 10.47% | 12.56% | 10.77% | 8.75% | 5.63% | — | |
| TJX Cos. Inc. | 9.73% | 9.79% | 1.81% | 10.59% | 10.82% | — | |
| Operating Profit Margin, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 8.63% | 6.44% | 7.38% | 8.11% | 7.68% | — | |
| Operating Profit Margin, Industry | |||||||
| Consumer Discretionary | 9.12% | 8.47% | 8.79% | 6.48% | 7.63% | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Operating profit margin = 100 × Income from operations ÷ Net revenues
= 100 × 722,157 ÷ 3,590,477 = 20.11%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | RH operating profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |
Net Profit Margin
RH, net profit margin calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 528,642) | 688,546) | 271,815) | 220,375) | 150,639) | 2,180) | |
| Net revenues | 3,590,477) | 3,758,820) | 2,848,626) | 2,647,437) | 2,505,653) | 2,440,174) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 14.72% | 18.32% | 9.54% | 8.32% | 6.01% | 0.09% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Amazon.com Inc. | 5.29% | -0.53% | 7.10% | 5.53% | 4.13% | — | |
| Home Depot Inc. | 10.87% | 10.87% | 9.74% | 10.20% | 10.28% | — | |
| Lowe’s Cos. Inc. | 6.63% | 8.77% | 6.51% | 5.93% | 3.25% | — | |
| TJX Cos. Inc. | 7.00% | 6.76% | 0.28% | 7.84% | 7.85% | — | |
| Net Profit Margin, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 6.54% | 3.14% | 7.21% | 6.58% | 5.63% | — | |
| Net Profit Margin, Industry | |||||||
| Consumer Discretionary | 7.92% | 5.15% | 9.20% | 5.24% | 5.92% | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 528,642 ÷ 3,590,477 = 14.72%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | RH net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Return on Equity (ROE)
RH, ROE calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 528,642) | 688,546) | 271,815) | 220,375) | 150,639) | 2,180) | |
| Stockholders’ equity (deficit) | 784,661) | 1,170,277) | 447,026) | 18,651) | (22,962) | (7,336) | |
| Profitability Ratio | |||||||
| ROE1 | 67.37% | 58.84% | 60.81% | 1,181.57% | — | — | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Amazon.com Inc. | 15.07% | -1.86% | 24.13% | 22.84% | 18.67% | — | |
| Home Depot Inc. | 1,095.07% | — | 390.00% | — | — | — | |
| Lowe’s Cos. Inc. | — | — | 406.05% | 217.09% | 63.50% | — | |
| TJX Cos. Inc. | 54.97% | 54.69% | 1.55% | 55.01% | 60.61% | — | |
| ROE, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 29.39% | 17.48% | 35.05% | 40.86% | 40.77% | — | |
| ROE, Industry | |||||||
| Consumer Discretionary | 30.61% | 21.65% | 34.37% | 25.29% | 34.62% | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity (deficit)
= 100 × 528,642 ÷ 784,661 = 67.37%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | RH ROE deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level. |
Return on Assets (ROA)
RH, ROA calculation, comparison to benchmarks
| Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 528,642) | 688,546) | 271,815) | 220,375) | 150,639) | 2,180) | |
| Total assets | 5,309,289) | 5,540,470) | 2,898,313) | 2,445,694) | 1,806,034) | 1,732,866) | |
| Profitability Ratio | |||||||
| ROA1 | 9.96% | 12.43% | 9.38% | 9.01% | 8.34% | 0.13% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Amazon.com Inc. | 5.76% | -0.59% | 7.93% | 6.64% | 5.14% | — | |
| Home Depot Inc. | 22.38% | 22.86% | 18.23% | 21.94% | 25.27% | — | |
| Lowe’s Cos. Inc. | 14.73% | 18.91% | 12.49% | 10.85% | 6.71% | — | |
| TJX Cos. Inc. | 12.34% | 11.53% | 0.29% | 13.55% | 21.36% | — | |
| ROA, Sector | |||||||
| Consumer Discretionary Distribution & Retail | 8.50% | 4.19% | 9.17% | 9.20% | 8.83% | — | |
| ROA, Industry | |||||||
| Consumer Discretionary | 7.66% | 4.94% | 8.07% | 4.42% | 5.57% | — | |
Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).
1 2023 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 528,642 ÷ 5,309,289 = 9.96%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | RH ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level. |