RH (RH)
Profitability ratios
Return on sales
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 48.97% | 51.20% | 50.57% | 47.72% | 42.69% |
| Operating profit margin | 12.91% | 20.40% | 25.27% | 16.81% | 14.15% |
| Pretax margin | 5.49% | 12.35% | 22.41% | 13.55% | 10.49% |
| Net profit margin | 4.50% | 14.94% | 18.77% | 9.78% | 8.59% |
The profitability ratios of RH, as indicated by the gross profit margin, operating profit margin, pre-tax margin, and net profit margin, have fluctuated over the past five years. The gross profit margin has generally shown a decreasing trend from 42.69% in 2020 to 48.97% in 2024, with fluctuations in between. This indicates the efficiency of the company in managing its production costs.
The operating profit margin, on the other hand, has displayed a more volatile pattern, with a peak of 25.27% in 2022 and a low of 12.91% in 2024. This metric reflects the company's ability to control its operating expenses and generate profits from its core business activities.
The pretax margin has also varied significantly, with a high of 22.41% in 2022 and a low of 5.49% in 2024. This ratio illustrates the company's profitability before accounting for taxes and indicates the overall financial health of the business.
Lastly, the net profit margin, which represents the percentage of revenue that translates into profit after all expenses have been deducted, has experienced fluctuations over the period under review. It ranged from 8.59% in 2020 to 14.94% in 2023, and then dropped to 4.50% in 2024. This metric is crucial as it indicates the company's bottom-line profitability.
Overall, the trend in these profitability ratios suggests that RH's profitability performance has been somewhat inconsistent over the past five years, with fluctuations in margins indicating varying levels of efficiency in cost management and revenue generation. It would be important for RH to analyze the underlying factors driving these changes in profitability to make informed strategic decisions moving forward.
Return on investment
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.83% | 13.60% | 16.73% | 16.11% | 14.84% |
| Return on assets (ROA) | 3.08% | 9.96% | 12.43% | 9.38% | 9.01% |
| Return on total capital | — | 68.59% | 75.73% | 96.54% | 716.96% |
| Return on equity (ROE) | — | 67.37% | 58.84% | 60.81% | 1,181.57% |
RH's profitability ratios show a fluctuating trend over the past five years. The Operating return on assets (Operating ROA) has declined from 16.73% in January 2022 to 8.83% in February 2024. This indicates a decrease in the company's ability to generate operating profit from its assets.
The Return on assets (ROA) also shows a downward trend, dropping from 12.43% in January 2022 to 3.08% in February 2024. This suggests a decline in RH's overall profitability as a percentage of its total assets.
Return on total capital, which was not available for the most recent year, shows high variability over the years, with significant fluctuations from 68.59% in January 2023 to 716.96% in February 2020. This ratio indicates how efficiently the company is generating profits from its total capital employed.
Return on equity (ROE) displays a similar pattern of inconsistency, with substantial changes from 58.84% in January 2022 to 1,181.57% in February 2020. ROE reflects the company's ability to generate profit from shareholders' equity.
In conclusion, RH's profitability ratios have shown varying performance over the past five years, indicating fluctuations in profitability and efficiency in generating returns for both shareholders and the total capital employed.