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SEGMENT REPORTING | 9 Months Ended
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Nov. 01, 2025
SEGMENT REPORTING |
SEGMENT REPORTING | NOTE 15—SEGMENT REPORTING We define reportable and operating segments on the same basis that we use to evaluate our performance internally by the chief operating decision maker (“CODM”), which we have determined is our Chief Executive Officer. We have three operating segments: RH Segment, Waterworks and Real Estate. The RH Segment and Waterworks operating segments (the “retail operating segments”) include all sales channels accessed by our customers, including sales through retail locations and outlets, including hospitality, websites, Sourcebooks, and the Trade and Contract channels. The Real Estate segment represents operations associated with certain of our equity method investments and consolidated VIEs that have operations, which are not directly related to the activities of the retail operating segments. The retail operating segments are strategic business units that offer products for the home furnishings customer. While RH Segment and Waterworks have a shared senior leadership team and customer base, we have determined that their results cannot be aggregated as they do not share similar economic characteristics, as well as due to other quantitative factors. Segment Information The CODM uses segment adjusted operating income to evaluate segment profitability for the retail operating segments and to allocate resources and analyze variances of actual performance to our forecasts when making decisions. Operating income is defined as net income before interest expense—net, other (income) expense—net, income tax expense and our share of equity method investments (income) loss—net. Segment adjusted operating income excludes (i) certain asset impairments, (ii) product recall, (iii) severance costs associated with a reorganization, (iv) non-cash compensation amortization related to an option grant made to Mr. Friedman in October 2020, (v) contract termination settlement—net and (vi) legal settlements—net. These items are excluded from segment adjusted operating income in order to provide better transparency of segment operating results. Accordingly, these items are not presented by segment because they are excluded from the segment profitability measure that the CODM and our senior leadership team review. Segment net revenues, which represent our disaggregated net revenues in accordance with ASC 606, significant segment expenses and segment adjusted operating income, by reportable segment, were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | THREE MONTHS ENDED | ​ | NINE MONTHS ENDED
​ | ​ | NOVEMBER 1, | ​ | NOVEMBER 2, | ​ | NOVEMBER 1, | ​ | NOVEMBER 2,
​ |  | 2025 | ​ | 2024 | ​ | 2025 | ​ | 2024
​ | ​ | RH SEGMENT | ​ | WATERWORKS | ​ | TOTAL(1) | ​ | RH SEGMENT | ​ | WATERWORKS | ​ | TOTAL(1) | ​ | RH SEGMENT | ​ | WATERWORKS | ​ | TOTAL(1) | ​ | RH SEGMENT | ​ | WATERWORKS | ​ | TOTAL(1)
​ | ​ | (in thousands)
Net revenues | ​ | $ | 835,821 | ​ | $ | 47,989 | ​ | $ | 883,810 | ​ | $ | 768,063 | ​ | $ | 43,669 | ​ | $ | 811,732 | ​ | $ | 2,447,536 | ​ | $ | 149,377 | ​ | $ | 2,596,913 | ​ | $ | 2,226,054 | ​ | $ | 142,293 | ​ | $ | 2,368,347
Cost of goods sold | ​ | ​ | 472,171 | ​ | ​ | 21,903 | ​ | ​ | 494,074 | ​ | ​ | 429,121 | ​ | ​ | 21,271 | ​ | ​ | 450,392 | ​ | ​ | 1,373,186 | ​ | ​ | 69,399 | ​ | ​ | 1,442,585 | ​ | ​ | 1,248,680 | ​ | ​ | 67,532 | ​ | ​ | 1,316,212
Advertising expense | ​ | ​ | 35,976 | ​ | ​ | 775 | ​ | ​ | 36,751 | ​ | ​ | 16,040 | ​ | ​ | 852 | ​ | ​ | 16,892 | ​ | ​ | 99,064 | ​ | ​ | 2,433 | ​ | ​ | 101,497 | ​ | ​ | 93,770 | ​ | ​ | 2,564 | ​ | ​ | 96,334
Other segment expenses(2) | ​ | ​ | 230,525 | ​ | ​ | 19,905 | ​ | ​ | 250,430 | ​ | ​ | 204,112 | ​ | ​ | 18,462 | ​ | ​ | 222,574 | ​ | ​ | 697,932 | ​ | ​ | 59,963 | ​ | ​ | 757,895 | ​ | ​ | 632,856 | ​ | ​ | 56,848 | ​ | ​ | 689,704
Segment adjusted operating income(1) | ​ | ​ | 97,149 | ​ | ​ | 5,406 | ​ | ​ | 102,555 | ​ | ​ | 118,790 | ​ | ​ | 3,084 | ​ | ​ | 121,874 | ​ | ​ | 277,354 | ​ | ​ | 17,582 | ​ | ​ | 294,936 | ​ | ​ | 250,748 | ​ | ​ | 15,349 | ​ | ​ | 266,097
Asset impairments | ​ |  | ​ | ​ |  | ​ | ​ |  | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 19,545 | ​ |  | ​ | ​ | ​ | ​ | ​ |  | 3,597 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 19,545
Product recall | ​ |  | ​ | ​ |  | ​ | ​ |  | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | — | ​ |  | ​ | ​ | ​ | ​ | ​ |  | 1,913 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | —
Reorganization related costs | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 1,233 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | —
Non-cash compensation | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 861 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 851 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 3,669
Contract termination settlement—net | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (3,375) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (3,375) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | —
Legal settlements—net | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | — | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | (9,375)
Operating income | ​ |  | ​ | ​ |  | ​ | ​ |  | 105,930 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 101,468 | ​ |  | ​ | ​ | ​ | ​ | ​ |  | 290,717 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 252,258
Interest expense—net | ​ |  | ​ | ​ |  | ​ | ​ |  | 57,152 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 57,590 | ​ |  | ​ | ​ | ​ | ​ | ​ |  | 171,113 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 173,624
Other (income) expense—net | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | 694 | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 27 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (3,533) | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | 529
Income before taxes and equity method investments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 48,084 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 43,851 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 123,137 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 78,105
(1) | All intercompany transactions are immaterial and have been eliminated.
(2) | Other segment expenses primarily include compensation and occupancy costs classified as selling, general and administrative expenses, and other general and administrative expenses.
In the three months ended November 1, 2025 and November 2, 2024, the Real Estate segment share of equity method investments loss, which is the measure of segment profitability reviewed by the CODM to evaluate performance internally for the Real Estate segment, was $0.4 million and $1.8 million, respectively. In the nine months ended November 1, 2025 and November 2, 2024, the Real Estate segment share of equity method investment operations was income of $6.2 million and loss of $8.5 million, respectively. The share of (income) loss from equity method investments for the Waterworks segment was immaterial in all fiscal periods presented. Depreciation and amortization for our segments was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | THREE MONTHS ENDED | ​ | NINE MONTHS ENDED
​ | ​ | NOVEMBER 1, | ​ | NOVEMBER 2, | ​ | NOVEMBER 1, | ​ | NOVEMBER 2,
​ |  | 2025 |  | 2024 |  | 2025 |  | 2024
​ | ​ | (in thousands)
RH Segment | ​ | $ | 37,207 | ​ | $ | 31,428 | ​ | $ | 103,947 | ​ | $ | 91,429
Waterworks | ​ | ​ | 1,169 | ​ | ​ | 1,570 | ​ | ​ | 4,294 | ​ | ​ | 4,653
Real Estate(1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Total depreciation and amortization |  | $ | 38,376 |  | $ | 32,998 |  | $ | 108,241 |  | $ | 96,082
(1) | There is no depreciation and amortization for the Real Estate segment since all assets represent construction in progress.
Balance sheet information for our segments consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | NOVEMBER 1, | ​ | FEBRUARY 1,
​ | ​ | 2025 | ​ | 2025
​ |  | RH SEGMENT |  | WATERWORKS |  | REAL ESTATE |  | TOTAL |  | RH SEGMENT |  | WATERWORKS |  | REAL ESTATE |  | TOTAL
​ | ​ | (in thousands)
Goodwill(1) | ​ | $ | 143,755 | ​ | $ | — | ​ | $ | — | ​ | $ | 143,755 | ​ | $ | 140,943 | ​ | $ | — | ​ | $ | — | ​ | $ | 140,943
Tradenames, trademarks and other intangible assets(2) | ​ |  | 62,708 | ​ |  | 17,000 | ​ |  | — | ​ |  | 79,708 | ​ |  | 59,118 | ​ |  | 17,000 | ​ |  | — | ​ |  | 76,118
Equity method investments(3) | ​ | ​ | — | ​ | ​ | 4,153 | ​ | ​ | 117,251 | ​ | ​ | 121,404 | ​ | ​ | — | ​ | ​ | 3,276 | ​ | ​ | 123,633 | ​ | ​ | 126,909
Total assets | ​ |  | 4,472,820 | ​ | ​ | 166,900 | ​ | ​ | 154,021 | ​ |  | 4,793,741 | ​ |  | 4,228,829 | ​ |  | 165,442 | ​ |  | 160,418 | ​ |  | 4,554,689
(1) | The Waterworks reporting unit goodwill of $51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018.
(2) | The Waterworks reporting unit tradename is presented net of an impairment charge of $35 million recognized in prior fiscal years.
(3) | The Waterworks segment balance represents membership interests in two European entities, one entity in which we hold a 50 percent membership interest and another entity in which we increased our membership interest from approximately 25 percent as of February 1, 2025 to approximately 28 percent as of November 1, 2025. We are not the primary beneficiary of either of these VIEs.
We are domiciled in the United States and primarily operate our retail locations and outlets in the United States. As of November 1, 2025, we operated the following number of retail locations and outlets outside the United States: ​
​ | ​ | ​
​ | ​ | COUNT
Canada | ​ | 5
United Kingdom | ​ | 3
Germany | ​ | 2
Belgium | ​ | 1
France | ​ | 1
Spain | ​ | 1
Total(1) | ​ | 13
(1) | Geographic revenues generated outside of the United States did not exceed 10% of total consolidated net revenues in either fiscal period presented.

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- Definition The entire disclosure for reporting segments including data and tables. 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