What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-04-01 compared with 2025-04-02 · 368 added, 424 removed, 993 unchanged (44% of the section changed)

13 unchanged sentences

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of RH and its subsidiaries (the “Company”) as of February 1, 2025 and February 3, 2024, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended February 1, 2025, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of February 1.

2025 and February 3, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 1.

2025 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity, and the computation of net income per share for such instruments and contracts in fiscal 2022.

We have audited the accompanying consolidated balance sheets of RH and its subsidiaries (the “Company”) as of January 31, 2026 and February 1, 2025, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended January 31, 2026, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 31, 2026 and February 1, 2025, and the results of its operations and its cash flows for each of the three years in the period ended January 31, 2026 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of

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FORM 10-K | 65

and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

6 unchanged sentences

Leases that do not meet the definition of a finance lease are considered operating leases.

For the year ended February 1, 2025, lease right-of-use assets obtained in exchange for lease obligations - net of lease terminations totaled $102.4 million related to operating leases and $85.1 million related to finance leases, of which a significant portion of the operating and finance leases relates to new real estate leases.

For the year ended January 31, 2026, lease right-of-use assets obtained in exchange for lease obligations - net of lease terminations totaled $235.5 million related to operating leases and $106.8 million related to finance leases, of which a significant portion of the operating and finance leases relates to new real estate leases.

Lease characteristics that management evaluates to determine lease classification include, but are not limited to, the reasonably certain lease term, incremental borrowing rate of the leased asset, and fair value of the leased asset.

14 unchanged sentences

San Francisco, California

April 2, 2025

March 31, 2026

We have served as the Company’s auditor since 2008.

10 unchanged sentences

Operating lease right-of-use assets

Tradenames, trademarks and other intangible assets

Tradenames, trademarks and other intangible assets—net

Deferred tax assets

1 unchanged sentence

Other non-current assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Accounts payable and accrued expenses

Deferred revenue and customer deposits

Convertible senior notes due 2024—net

Operating lease liabilities

8 unchanged sentences

Deferred tax liabilities

Other non-current obligations

Other non-current liabilities

Total liabilities

Commitments and contingencies (Note 18)

Stockholders’ deficit:

Preferred stock—$ 0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of February 1, 2025 and February 3, 2024

Common stock— $ 0.0001 par value per share, 180,000,000 shares authorized, 18,726,116 shares issued and outstanding as of February 1, 2025;

Stockholders’ equity (deficit)

Preferred stock—$ 0.0001 par value per share, 10,000,000 shares authorized, no shares issued or outstanding as of January 31, 2026 and February 1, 2025

Common stock— $ 0.0001 par value per share, 180,000,000 shares authorized, 18,818,976 shares issued and outstanding as of January 31, 2026;

18,726,116 shares issued and outstanding as of February 1, 2025

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Accumulated deficit

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Total stockholders’ equity (deficit)

Total liabilities and stockholders’ equity (deficit)

The accompanying notes are an integral part of these Consolidated Financial Statements.

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PART II — FINANCIAL STATEMENTS

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CONSOLIDATED STATEMENTS OF INCOME

2 unchanged sentences

Selling, general and administrative expenses

Income from operations

Operating income

Other expenses

Interest expense—net

Loss on extinguishment of debt

Other expense—net

Other (income) expense—net

Total other expenses

Income before taxes and equity method investments

Income tax expense (benefit)

Income tax expense

Income before equity method investments

Share of equity method investments loss—net

Share of equity method investments net (income) loss

Weighted-average shares used in computing basic net income per share

24 unchanged sentences

Exercise of stock options

Repurchase of common stock—including excise tax

( 3,719,550 )

( 1,003,700 )

Retirement of treasury stock

( 3,719,550 )

Exercise of call option under bond hedge upon settlement of convertible senior notes

Settlement of convertible senior notes

Termination of common stock warrants

Termination of convertible note hedge

Impact of ASU 2020-06 adoption

Non-cash equity compensation related to consolidated variable interest entities

Net loss from foreign currency translation

Balances—January 28, 2023

Stock-based compensation

Issuance of restricted stock

Vested and delivered restricted stock units

Exercise of stock options

Settlement of convertible senior notes

Repurchase of common stock—including excise tax

14 unchanged sentences

Balances—February 1, 2025

Stock-based compensation

Issuance of restricted stock

Vested and delivered restricted stock units

Exercise of stock options

Net gain from foreign currency translation

Balances—January 31, 2026

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART II — FINANCIAL STATEMENTS

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PART II — FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOWS

6 unchanged sentences

Asset impairments

Non-cash compensation related to consolidated variable interest entities

Non-cash finance lease interest expense

Deferred income taxes

Loss on extinguishment of debt

Share of equity method investments loss—net

Share of equity method investments net (income) loss

Distribution of return on equity method investment

Other non-cash items

8 unchanged sentences

Current and non-current operating lease liabilities

Other non-current obligations

Other non-current liabilities

Net cash provided by operating activities

1 unchanged sentence

Capital expenditures

Acquisition of business

Equity method investments

Proceeds from sale of asset

Acquisition of intangible asset

Receipt of promissory note repayment from equity method investee

Distribution of return of equity method investment

Proceeds from insurance recoveries

Net cash used in investing activities

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PART II — FINANCIAL STATEMENTS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

3 unchanged sentences

Repayments under asset based credit facility

Borrowings under term loans

Repayments under term loans

Borrowings under real estate loans

Repayments under real estate loans

Repayments under promissory and equipment security notes

Repayments of convertible senior notes

Repayment under convertible senior notes repurchase obligation

Debt issuance costs

Debt extinguishment costs

Principal payments under finance lease agreements—net of tenant allowances

Proceeds from termination of convertible senior note hedges

Payments for termination of common stock warrants

Repurchases of common stock—inclusive of excise taxes paid

( 1,252,899 )

( 1,000,000 )

Proceeds from exercise of stock options

Tax withholdings related to issuance of stock-based awards

Other financing activities

Net cash provided by (used in) financing activities

1 unchanged sentence

Effects of foreign currency exchange rate translation on cash

Net decrease in cash and cash equivalents, restricted cash and restricted cash equivalents

Net increase (decrease) in cash and cash equivalents

( 1,388,075 )

2 unchanged sentences

Beginning of period—restricted cash

Beginning of period—restricted cash equivalents (acquisition related escrow deposits)

Beginning of period—cash and cash equivalents, restricted cash and restricted cash equivalents

Beginning of period—cash and cash equivalents and restricted cash

End of period—cash and cash equivalents

End of period—restricted cash

End of period—cash and cash equivalents and restricted cash

Cash paid for interest

Cash paid for taxes

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PART II — FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

Cash paid for income taxes (Note 13)

Non-cash transactions

2 unchanged sentences

Excise tax from share repurchases in accounts payable and accrued expenses at period-end

Property and equipment additions acquired under real estate loans

Shares issued on settlement of convertible senior notes

Shares received on exercise of call option under bond hedge upon settlement of convertible senior notes

Extinguishment of convertible senior notes related to repurchase obligation

Financing liability and embedded derivative arising from convertible senior notes repurchase

Conversion of loan receivables into equity of consolidated variable interest entities

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART II — FINANCIAL STATEMENTS

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PART II — FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

We offer merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby, child and teen furnishings.

As of February 1, 2025, we operated a total of 68 RH Galleries and 40 RH Outlet stores, one RH Guesthouse, one RH Interior Design Office and 14 Waterworks Showrooms throughout the United States, Canada, the United Kingdom, Germany, Belgium and Spain.

As of January 31, 2026, we operated a total of 74 RH Galleries and 44 RH Outlet stores, one RH Guesthouse, one RH Interior Design Studio and 14 Waterworks Showrooms throughout the United States, Canada and Europe.

We also have sourcing operations in Shanghai and Hong Kong.

14 unchanged sentences

As a result, our fiscal year may include 53 weeks.

Our fiscal years ended February 1, 2025 (“fiscal 2024”) and January 28, 2023 (“fiscal 2022”) consisted of 52 weeks.

Our fiscal years ended January 31, 2026 (“fiscal 2025”) and February 1, 2025 (“fiscal 2024”) consisted of 52 weeks.

Our fiscal year ended February 3, 2024 (“fiscal 2023”) consisted of 53 weeks.

4 unchanged sentences

We consider all highly liquid investments with original maturities of 90 days or less to be cash equivalents.

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Concentration of Credit Risk

4 unchanged sentences

Accounts receivable consists primarily of receivables from our credit card processors for sales transactions, receivables related to our Contract business and other miscellaneous receivables.

Accounts receivable is presented net of allowance for expected credit losses of $ 4.4 million and $ 3.2 million as of February 1, 2025 and February 3, 2024, respectively.

Accounts receivable is presented net of allowance for expected credit losses of $ 2.9 million and $ 4.4 million as of January 31, 2026 and February 1, 2025, respectively.

The allowance for expected credit losses is determined by considering a number of factors, including the length of time amounts are past due and the party’s financial condition and ability to pay the obligations.

6 unchanged sentences

Actual inventory shrinkage and obsolescence can vary from estimates due to various factors, including the volume of inventory movement and execution against loss prevention initiatives in our distribution centers, home delivery center locations, off-site storage locations and with our third-party transportation providers.

Our inventory reserves were $ 35 million and $ 46 million as of February 1, 2025 and February 3, 2024, respectively.

During fiscal 2022, we reserved for certain inventory of $ 11 million that was not considered saleable.

During fiscal 2024, we disposed of such inventory.

Our inventory reserves were $ 35 million as of both January 31, 2026 and February 1, 2025.

Supplier Finance Program

6 unchanged sentences

(in thousands)

Confirmed obligations outstanding at beginning of fiscal year

Outstanding at beginning of fiscal year

Invoices confirmed

Invoices paid

Confirmed obligations outstanding at end of fiscal year

PART II — FINANCIAL STATEMENTS

Outstanding at end of fiscal year

(1) The fiscal 2024 activity has been updated in the fiscal 2025 Form 10-K.

The amounts disclosed in the fiscal 2024 Form 10-K for invoices confirmed and invoices paid were ($ 415 ) million and $ 422 million, respectively.

There is no change to the outstanding invoices at the beginning or end of fiscal 2024 from the amounts disclosed in the fiscal 2024 Form 10-K.

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PART II — FINANCIAL STATEMENTS

Product Recalls

When necessary, we initiate product recalls for certain of our products, as well as adjust accruals related to certain product recalls previously initiated due to changes in estimates based on customer response and vendors and insurance recoveries.

The product recall accrual was $ 0.7 million and $ 3.8 million as of February 1, 2025 and February 3, 2024, respectively, and is included in other current liabilities on the consolidated balance sheets.

The product recall accrual was $ 1.3 million and $ 0.7 million as of January 31, 2026 and February 1, 2025, respectively, and is included in other current liabilities on the consolidated balance sheets.

Advertising Expenses

5 unchanged sentences

In the case of multiple printings of a Sourcebook, the creative costs are expensed in full upon the initial delivery of Sourcebooks to customers.

We had $ 30 million and $ 28 million of capitalized catalog costs as of February 1, 2025 and February 3, 2024, respectively, which are included in prepaid expense and other current assets on the consolidated balance sheets.

We had $ 23 million and $ 30 million of capitalized catalog costs as of January 31, 2026 and February 1, 2025, respectively, which are included in prepaid expense and other current assets on the consolidated balance sheets.

Website and Print Advertising

17 unchanged sentences

Land purchases are recorded at cost and are non-depreciable assets.

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PART II — FINANCIAL STATEMENTS

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Cloud Computing Costs

We incur costs to implement cloud computing arrangements that are hosted by third parties.

Cloud computing costs are presented net of accumulated amortization of $ 30 million and $ 19 million as of February 1, 2025 and February 3, 2024, respectively.

Cloud computing costs are presented net of accumulated amortization of $ 43 million and $ 30 million as of January 31, 2026 and February 1, 2025, respectively.

Such costs are capitalized during the application development phase and are included in prepaid expense and other current assets or other non-current assets on the consolidated balance sheets.

2 unchanged sentences

We lease nearly all of our retail and outlet locations, corporate headquarters, distribution centers and home delivery center locations, as well as other storage and office space.

The initial lease terms of our real estate leases generally range from ten to fifteen years , and certain leases contain renewal options for up to an additional 25 years , the exercise of which is at our sole discretion.

We also lease certain equipment with lease terms generally ranging from two to seven years .

The initial terms of our real estate leases generally range from ten to fifteen years , and certain leases contain renewal options for up to an additional twenty-five years , the exercise of which is at our sole discretion.

We also lease certain equipment with terms generally ranging from two to seven years .

Our lease agreements generally do not contain any material residual value guarantees or material restrictions or covenants.

5 unchanged sentences

Tenant allowances that are reasonably certain to be received under finance leases subsequent to lease commencement are reflected as a reduction of both the lease liabilities and right-of-use assets on the consolidated balance sheets at the commencement date.

In the case of leases with associated construction, tenant allowances are provided for us to design and build the leased asset.

In the case of leases with associated construction, tenant allowances are generally provided for us to design and build the leased asset.

Tenant allowances received from landlords during the construction phase of a leased asset and prior to lease commencement are recorded as cash and cash equivalents with an offset recorded in other non-current assets (to the extent we have incurred related capital expenditure for construction costs) or in other current liabilities (to the extent that payments are received prior to capital construction expenditures by us) on the consolidated balance sheets.

11 unchanged sentences

Factors considered include, but are not limited to, (i) the contractual terms, including renewal periods compared to estimated market rates, (ii) the uniqueness or importance of the asset or its location, (iii) the potential costs of obtaining an alternative asset, (iv) the potential costs of relocating or ceasing use of the asset, including the consideration of leasehold improvements and other invested capital, and (v) any potential tax consequences.

PART II — FINANCIAL STATEMENTS

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PART II — FINANCIAL STATEMENTS

The determination of the reasonably certain lease term affects the inclusion of rental payments utilized in the incremental borrowing rate calculations, the results of the lease classification test, and consideration of certain assets held for sale or planned for sale-leaseback.

The reasonably certain lease term may materially impact our financial position related to certain Design Galleries or distribution center facilities which typically have greater lease payments.

The reasonably certain lease term may materially affect our financial position related to certain Design Galleries or significant distribution center facilities, which typically have greater lease payments.

Although the above factors are considered in our analysis, the assessment involves subjectivity considering our strategy, expected future events and market conditions.

10 unchanged sentences

Such costs are typically subject to an annual reconciliation process and are included as variable lease payments in cost of goods sold and selling, general and administrative expenses on the consolidated statements of income based on our accounting policy.

We have a small group of real estate leases that include rental payments periodically adjusted for inflation (e.g., based on the consumer price index).

We have a small group of real estate leases that include rental payments periodically adjusted for inflation (e.g., based on the consumer price index or similar indices).

We include these variable payments in the initial measurement of the lease right-of-use asset and lease liability according to the index or rate at the commencement date and incorporate adjustments to rental payments in future periods if such increases have a minimum rent escalation (e.g., floor).

9 unchanged sentences

We determine the fair value of the underlying asset, considering lease components such as land and building, for purposes of determining the lease classification and allocating our contractual rental payments to the lease components.

The fair value of the underlying asset and lease components also impact the evaluation and accounting for assets held for sale and sale-leaseback transactions.

The fair value assessments may materially impact our financial position related to certain Design Galleries or distribution center facilities.

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The fair value of the underlying asset and lease components also impacts the evaluation and accounting for assets held for sale and sale-leaseback transactions.

The fair value assessments may materially affect our financial position related to certain Design Galleries and significant distribution center facilities.

PART II — FINANCIAL STATEMENTS

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The determination of fair value requires subjectivity and estimates, including the use of multiple valuation techniques and uncertain inputs, such as market price per square foot and assumed capitalization rates or the replacement cost of the assets, where applicable.

3 unchanged sentences

Upon construction commencement, we evaluate whether or not we, as lessee, control the asset being constructed and, depending on the extent to which we are involved, we may be the “deemed owner” of the leased asset for accounting purposes during the construction period under a build-to-suit arrangement.

If we are the “deemed owner” for accounting purposes during the construction period, upon construction commencement we are required to capitalize (i) costs incurred by us and (ii) the cash and non-cash assets contributed by the landlord for construction as property and equipment on our consolidated balance sheets as “build-to-suit property”, with an offsetting financing obligation under build-to-suit lease transactions.

If we are the “deemed owner” for accounting purposes during the construction period, upon construction commencement we are required to capitalize (i) costs incurred by us and (ii) the cash and non-cash assets contributed by the landlord for construction as “build-to-suit property” within property and equipment on our consolidated balance sheets, with an offset to financing obligation under build-to-suit lease transactions on our consolidated balance sheets.

The contributions by the landlord toward construction, including the building, existing site improvements at construction commencement and any amounts paid by the landlord for construction, are included within the non-cash section of the consolidated statements of cash flows.

Over the lease term, these non-cash additions to property and equipment do not impact our cash outflows, nor do they impact net income on the consolidated statements of income.

Over the lease term, these non-cash additions to property and equipment do not affect our cash outflows, nor do they impact net income on the consolidated statements of income.

Upon completion of the construction project where we are the deemed owner, we perform a sale-leaseback analysis to determine if we can derecognize the build-to-suit asset and corresponding financing obligation.

5 unchanged sentences

We occasionally enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell the property to a third-party and agree to lease the property back for a certain period of time.

To determine whether the transfer of the property should be accounted for as a sale, we evaluate whether we have transferred control to the third-party in accordance with the guidance set forth in Topic 606.

If the transfer of the asset is a sale at market terms, we recognize the transaction price for the sale based on the cash proceeds received, derecognize the carrying amount of the underlying asset and recognize a gain or loss in the consolidated statements of income for any difference between the carrying value of the asset and the transaction price.

7 unchanged sentences

Patents are amortized on a straight-line basis over the estimated useful life of the patent, which generally is fifteen years .

As of February 1, 2025, intangible assets are reported net of $ 0.1 million of patent amortization.

PART II — FINANCIAL STATEMENTS

Intangible assets are reported net of $ 0.2 million and $ 0.1 million of amortization as of January 31, 2026 and February 1, 2025, respectively.

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PART II — FINANCIAL STATEMENTS

Goodwill is initially recorded as of the acquisition date, is measured as any excess of the purchase price over the estimated fair value of the identifiable net assets acquired and is assigned to the applicable reporting unit.

A reporting unit is an operating segment, or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed.

As of February 1, 2025 and February 3, 2024, goodwill relates to the RH Segment only.

As of January 31, 2026 and February 1, 2025, goodwill relates to the RH Segment only.

Goodwill is not amortized, but rather is subject to impairment testing at least annually or more frequently if events or changes in circumstances indicate that the asset may be impaired.

12 unchanged sentences

Tradenames, Trademarks and Other Intangible Assets

We annually evaluate whether tradenames, trademarks and other intangible assets continue to have an indefinite life.

Intangible assets are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present.

We annually evaluate whether tradenames, trademarks and other intangible assets continue to have an indefinite life, except for patents, which typically have a useful life between ten to twenty years .

Intangible assets are reviewed for impairment annually in the fourth fiscal quarter and may be reviewed more frequently if indicators of impairment are present.

Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator.

6 unchanged sentences

Based on the qualitative tests performed in each fiscal year, we did not perform quantitative impairment tests in any year and did not recognize any impairment with respect to the assets.

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PART II — FINANCIAL STATEMENTS

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Long-Lived Assets

2 unchanged sentences

If the sum of the estimated undiscounted future cash flows over the remaining life of the primary asset is less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis of the asset or asset group.

The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our stores is generally the individual Gallery level.

The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our Galleries and Showrooms is generally the individual retail location level.

Since there is typically no active market for our long-lived assets, we estimate fair values based on the expected future cash flows of the asset or asset group, using a discount rate commensurate with the related risk.

The estimate of fair value requires judgments that may significantly affect the ending asset valuation.

Future cash flows are estimated considering the highest and best use of the assets, which may be based on a number of factors, including gallery-level historical results, current trends, operating cash flow projections or market-based rental rates.

Future cash flows are estimated considering the highest and best use of the assets, which may be based on a number of factors, including location level historical results, current trends, operating cash flow projections or market-based rental rates.

Our estimates are subject to uncertainty and may be affected by a number of factors outside our control, including general economic conditions and the competitive environment.

While we believe our estimates and judgments about future cash flows are reasonable, future impairment charges may be required if the expected cash flow estimates, as projected, do not occur or if events change requiring us to revise our estimates.

During the third quarter of fiscal 2024, we assessed two Design Galleries in Germany for impairment.

During fiscal 2024, we assessed two Design Galleries in Germany for impairment.

We first assessed the recoverability of the assets based on an undiscounted cash flow model.

Since the assets were not recoverable on an undiscounted cash flow basis, we determined the long-lived asset impairment as the amount by which the carrying value of the assets exceeded the related fair value over the respective remaining lease terms, both of which end in 2027.

As a result of this analysis, we recognized long-lived asset impairment charges of $ 19 million, comprising lease right-of-use asset impairment of $ 13 million and property and equipment impairment of $ 5.6 million, which is included in selling, general and administrative expenses on the consolidated statements of income.

As a result of this analysis, during fiscal 2024 we recognized long-lived asset impairment charges of $ 19 million, comprising lease right-of-use asset impairment of $ 13 million and property and equipment impairment of $ 5.6 million, which is included in selling, general and administrative expenses on the consolidated statements of income.

Except as noted above, we did not record impairments for long-lived assets at the individual retail location level in fiscal 2025, fiscal 2024 or fiscal 2023.

11 unchanged sentences

The determination of the power to direct the activities that most significantly impact economic performance requires judgement and is impacted by numerous factors, including the purpose of the VIE, rights and obligations of the variable interest holders, mechanisms for the resolution of disputes among the variable interest holders and other agreements with the legal entity and its variable interest holders.

PART II — FINANCIAL STATEMENTS

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PART II — FINANCIAL STATEMENTS

We account for investments in VIEs that are limited liability companies where we are not the primary beneficiary using the equity method of accounting.

12 unchanged sentences

We determined these assumptions based on entity specific considerations of (i) the primary expected future cash flows of property rents and expected debt and debt service payments, (ii) discount rates appropriate for the economic environment and anticipated future interest rates and (iii) expected volatility based on historical observed stock prices of publicly traded peer companies, including those involved in real estate development.

We had liability-classified compensation arrangements of approximately $ 1.0 million as of both January 31, 2026 and February 1, 2025, which are included in other non-current liabilities on the consolidated balance sheets.

Equity Method Investments

1 unchanged sentence

We account for such investments using the equity method of accounting.

Our investments are presented as equity method investments on the consolidated balance sheets and our proportionate share of earnings or losses of the equity method investments are included in share of equity method investments loss on the consolidated statements of income.

We do not elect the fair value option and the equity method investments are initially measured at cost.

2 unchanged sentences

If specialized expertise is required we obtain independent third-party appraisals to determine the fair value of the underlying assets and liabilities.

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PART II — FINANCIAL STATEMENTS

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The operating agreements for each equity method investment specify distributions from operations and upon liquidation that may be disproportionate to the members’ relative ownership percentages.

6 unchanged sentences

The difference between the carrying value of the equity method investment and its estimated fair value is recognized as an impairment charge when the loss in value is deemed other than temporary.

We did no t recognize any impairment in fiscal 2025, fiscal 2024 or fiscal 2023.

Deferred Financing Fees and Debt Issuance Costs

12 unchanged sentences

Costs of shipping and handling are included in cost of goods sold on the consolidated statements of income.

Sales tax or value added tax (VAT) collected is not recognized as revenue but is included in accounts payable and accrued expenses on the consolidated balance sheets as it is ultimately remitted to governmental authorities.

Sales tax, value added tax (VAT) or other equivalent tax collected is not recognized as revenue but is included in accounts payable and accrued expenses on the consolidated balance sheets as it is ultimately remitted to governmental authorities.

Our customers may return purchased items for a refund in accordance with our policies.

1 unchanged sentence

The allowance for sales returns is presented within other current liabilities and the estimated value of the right of return asset for merchandise is presented within prepaid expense and other assets on the consolidated balance sheets.

Merchandise exchanges of the same product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve.

PART II — FINANCIAL STATEMENTS

Merchandise exchanges of the same product and price are not considered merchandise returns and, therefore, are excluded when determining the allowance for sales returns.

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A summary of the allowance for sales returns is as follows:

PART II — FINANCIAL STATEMENTS

The allowance for sales returns was as follows:

(in thousands)

11 unchanged sentences

Custom order deposits are recognized as revenue when the customer obtains control of the merchandise.

We expect that substantially all of the deferred revenue and customer deposits as of February 1, 2025 will be recognized within the next six months as the performance obligations are satisfied, and membership fees will be recognized over the membership period.

We expect that substantially all of the deferred revenue and customer deposits as of January 31, 2026 will be recognized within the next six months as the performance obligations are satisfied, and membership fees will be recognized over the membership period.

We sell gift cards to our customers in our Galleries and through our websites and Sourcebooks.

2 unchanged sentences

During fiscal 2025, fiscal 2024 and fiscal 2023, we recognized $ 22 million, $ 20 million and $ 24 million, respectively, of revenue related to previous deferrals of gift cards.

Customer liabilities related to gift cards were $ 20 million and $ 25 million as of February 1, 2025 and February 3, 2024, respectively.

Customer liabilities related to gift cards were $ 18 million and $ 20 million as of January 31, 2026 and February 1, 2025, respectively.

We recognize breakage income associated with gift cards proportional to actual gift card redemptions in net revenues on the consolidated statements of income.

5 unchanged sentences

The projections involved in this process are subject to uncertainty related to the timing and amount of claims filed, levels of IBNR, fluctuations in health care costs and changes to regulatory requirements.

We had liabilities of $ 4.7 million and $ 3.2 million related to health care coverage as of February 1, 2025 and February 3, 2024, respectively.

We had liabilities of $ 3.7 million and $ 4.7 million related to health care coverage as of January 31, 2026 and February 1, 2025, respectively.

We carry workers’ compensation insurance subject to a deductible amount for which we are responsible for each claim.

We had liabilities of $ 6.1 million and $ 5.6 million related to workers’ compensation claims, primarily for claims that do not meet the per-incident deductible, as of February 1, 2025 and February 3, 2024, respectively.

84 | FORM 10-K

We had liabilities of $ 6.6 million and $ 6.1 million related to workers’ compensation claims, primarily for claims that do not meet the per-incident deductible, as of January 31, 2026 and February 1, 2025, respectively.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 83

Stock-Based Compensation

9 unchanged sentences

We determined these assumptions based on consideration of (i) future exercise behavior based on the historical observed exercise pattern of the award recipient, (ii) expected volatility based on our historical observed common stock prices measured over the full trading history of our common stock and implied volatility based on 180-day average trading prices of our common stock and (iii) a discount for illiquidity estimated using the Finnerty method.

Refer to Note 3— Consolidated Variable Interest Entities and Noncontrolling Interests for discussion of compensation expense related to noncontrolling interests recognized in fiscal 2022.

Cost of Goods Sold

13 unchanged sentences

Interest expense primarily relates to interest incurred on our term loans, asset based credit facility and finance lease arrangements.

Refer to Note 12— Credit Facilities and Note 10— Leases.

Refer to Note 11— Credit Facilities and Convertible Senior Notes and Note 10— Leases.

Interest income primarily represents interest received related to our cash and cash equivalent balances.

4 unchanged sentences

Interest expense—net

PART II — FINANCIAL STATEMENTS

84 | FORM 10-K

PART II — FINANCIAL STATEMENTS

Net Income Per Share

2 unchanged sentences

Potential dilutive securities are excluded from the computation of diluted net income per share if their effect is anti-dilutive.

The if-converted method is applicable for the convertible senior notes beginning in fiscal 2022 due to the adoption of ASU 2020-06 —Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

Treasury Stock

1 unchanged sentence

Upon retirement of treasury stock, we allocate the excess of the purchase price over par value to additional paid-in capital subject to certain limitations with any remaining purchase price allocated to retained earnings (accumulated deficit) .

The cost basis of treasury stock includes excise tax on share repurchases initiated on and after January 1, 2023 and any outstanding balance of excise tax is included in accounts payable and accrued expenses on the consolidated balance sheets.

The cost basis of treasury stock includes excise tax on share repurchases initiated and any outstanding balance of excise tax is included in accounts payable and accrued expenses on the consolidated balance sheets.

We account for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns.

3 unchanged sentences

Future taxable income and ongoing prudent and feasible tax planning are considered in determining the amount of the valuation allowance, and the amount of the allowance is subject to adjustment in the future.

Specifically, in the event we were to determine that it is not more likely than not able to realize our net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination is made.

Specifically, in the event we were to determine that it is not more likely than not that we are able to realize our net deferred tax assets in the future, an adjustment to the valuation allowance would decrease income in the period such determination is made.

This allowance does not alter our ability to utilize the underlying tax net operating loss and credit carryforwards in the future, the utilization of which is limited to achieving future taxable income.

1 unchanged sentence

Differences between tax positions taken in a tax return and amounts recognized in the financial statements generally result in an increase in liability for income taxes payable or a reduction of an income tax refund receivable, or a reduction in a deferred tax asset or an increase in a deferred tax liability, or both.

We recognize interest and penalties related to unrecognized tax benefits in income tax expense (benefit) on the consolidated statements of income.

We recognize interest and penalties related to unrecognized tax benefits in income tax expense on the consolidated statements of income.

Foreign Currency Matters

2 unchanged sentences

dollar currencies are translated at the rate of exchange prevailing on the date of the consolidated balance sheets, and revenues and expenses are translated at average rates of exchange for the period.

The related translation gains and losses are reflected in the accumulated other comprehensive loss section on the consolidated statements of stockholders’ equity (deficit), and net gain (loss) from foreign currency translation , which includes intercompany gains and losses, is presented net of tax on the consolidated statements of comprehensive income.

Transaction gains and losses resulting from intercompany balances of a long-term investment nature are also classified as accumulated other comprehensive loss on the consolidated balance sheets.

Foreign currency gains and losses resulting from foreign currency transactions denominated in a currency other than the subsidiary’s functional currency are included in other expense—net on the consolidated statements of income.

The related translation gains and losses are reflected in the accumulated other comprehensive income (loss) on the consolidated statements of stockholders’ equity (deficit), and net gain (loss) from foreign currency translation , which includes intercompany gains and losses, is presented net of tax on the consolidated statements of comprehensive income.

Transaction gains and losses resulting from intercompany balances of a long-term investment nature are classified as accumulated other comprehensive income (loss) on the consolidated balance sheets.

Foreign currency gains and losses resulting from foreign currency transactions denominated in a currency other than the subsidiary’s functional currency are included in other (income) expense—net on the consolidated statements of income.

Such foreign exchange gains and losses are due to the net impact of changes in foreign exchange rates as compared to the U.S.

1 unchanged sentence

dollars by our international subsidiaries other than those of a long-term investment nature, where repayment is not planned or anticipated in the foreseeable future.

86 | FORM 10-K

PART II — FINANCIAL STATEMENTS

FORM 10-K | 85

Recently Issued Accounting Standards

New Accounting Standards or Updates Adopted

Segment Reporting:

Improvements to Reportable Segment Disclosures

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07—Improvements to Reportable Segment Disclosures .

This new guidance is designed to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

We have adopted this ASU in the fourth quarter of fiscal 2024 on a retrospective basis.

Refer to Note 20— Segment Reporting .

New Accounting Standards or Updates Not Yet Adopted

Joint Venture Formations:

Recognition and Initial Measurement

In August 2023, the FASB issued ASU 2023-05—Business Combinations—Joint Venture Formations (Subtopic 805-60) :

In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05—Business Combinations—Joint Venture Formations (Subtopic 805-60) :

Recognition and Initial Measurement (“ASU 2023-05”).

1 unchanged sentence

The guidance does not impact accounting by the venturers.

The new guidance is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis.

While ASU 2023-05 is not currently applicable to us because our existing arrangements in variable interest entities do not meet the definition of joint ventures as described in the updated standard, we will apply this guidance in future reporting periods after the guidance is effective to any future arrangements we enter into that meet the definition of a joint venture.

We adopted this new guidance in the first quarter of fiscal 2025 on a prospective basis.

While ASU 2023-05 is not currently applicable to us because our existing arrangements in variable interest entities do not meet the definition of joint ventures in the updated standard, we will apply this guidance to any future arrangements we enter into that meet the definition of a joint venture.

Income Taxes:

3 unchanged sentences

The amendments of this update are related to the rate reconciliation and income taxes paid, requiring consistent categories and greater disaggregation of information in the rate reconciliation as well as income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are currently assessing the impact that adopting this ASU will have on our consolidated financial statements.

We adopted this ASU in the fourth quarter of fiscal 2025 on a prospective basis.

Refer to Note 13 —Income Taxes.

New Accounting Standards or Updates Not Yet Adopted

Income Statement:

6 unchanged sentences

We are currently assessing the impact that adopting this ASU will have on our consolidated financial statements.

PART II — FINANCIAL STATEMENTS

Financial Instruments:

Measurement of Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

This new guidance provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets.

ASU 2025-05 is effective for fiscal years beginning after December 15, 2025.

We are currently assessing the impact that adopting this ASU will have on our consolidated financial statements.

Intangibles—Goodwill and Other—Internal-Use Software:

Improvements to Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

This new guidance amends guidance related to accounting for internal-use software development costs and clarifies the criteria for capitalization.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027.

We are currently assessing the impact that adopting this ASU will have on our consolidated financial statements.

Interim Reporting:

Narrow-Scope Reporting

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Reporting (“ASU 2025-11”).

This new guidance clarifies and improves interim reporting guidance.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027.

We expect to comply with the amendments in this ASU beginning on the effective date.

86 | FORM 10-K

PART II — FINANCIAL STATEMENTS

NOTE 4—PREPAID EXPENSE AND OTHER ASSETS

1 unchanged sentence

(in thousands)

Capitalized catalog costs

Value added tax (VAT) receivable

Prepaid expenses

Federal and state tax receivable (1)

Vendor deposits

Tenant allowance receivable

Value added tax (VAT) receivable

Capitalized catalog costs

Federal and state tax receivable (1)

Capitalized cloud computing costs

Right of return asset for merchandise

Tenant allowance receivable

Promissory notes receivable, including interest (2)

1 unchanged sentence

Total prepaid expense and other current assets

(1) Includes $ 19 million as of both periods related to a federal tax receivable from a carryback claim.

(1) As of January 31, 2026 and February 1, 2025, includes $ 4.3 million and $ 19 million, respectively, related to a federal tax receivable from a carryback claim.

(2) Represents promissory notes, including principal and accrued interest, due from an affiliate of the managing member of the Aspen LLCs.

6 unchanged sentences

Other deposits

Vendor deposits—non-current

Deferred financing fees

Vendor deposits—non-current

Other non-current assets

Total other non-current assets

88 | FORM 10-K

PART II — FINANCIAL STATEMENTS

FORM 10-K | 87

NOTE 5—PROPERTY AND EQUIPMENT

12 unchanged sentences

(1) Refer to “Lease Accounting” within Note 3— Significant Accounting Policies and Note 10— Leases .

(2) Includes construction in progress of $ 13 million and $ 39 million as of February 1, 2025 and February 3, 2024, respectively.

(3) Includes $ 109 million and $ 126 million of owned buildings under construction related to future Design Galleries as of February 1, 2025 and February 3, 2024, respectively.

(4) Includes accumulated amortization related to finance lease right-of-use assets of $ 320 million and $ 268 million as of February 1, 2025 and February 3, 2024, respectively.

(2) Includes construction in progress of $ 37 million and $ 13 million as of January 31, 2026 and February 1, 2025, respectively.

(3) Includes $ 22 million and $ 109 million of owned buildings under construction related to future Design Galleries as of January 31, 2026 and February 1, 2025, respectively.

(4) Includes accumulated amortization related to finance lease right-of-use assets of $ 384 million and $ 320 million as of January 31, 2026 and February 1, 2025, respectively.

Refer to Note 10— Leases.

We recorded depreciation of property and equipment, excluding amortization for finance lease right-of-use assets, of $ 84 million, $ 76 million and $ 64 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

NOTE 6—BUSINESS COMBINATION

On July 8, 2025, we acquired a home furnishings business operating under the brand names of Formations and Dennis & Leen for total consideration of $ 32 million, funded through available cash.

The transaction was accounted for as a business combination under ASC 805— Business Combinations .

We believe that this addition to the RH platform further positions us as a leader in the luxury design market as we continue to enhance the RH product assortment.

During fiscal 2025, we incurred $ 2.3 million of acquisition-related costs associated with the transaction.

These costs include fees associated with financial, legal and accounting advisors, and are included in selling, general and administrative expenses on the consolidated statements of income.

88 | FORM 10-K

PART II — FINANCIAL STATEMENTS

The following table summarizes the purchase price allocation based on the fair value of the assets acquired and liabilities assumed as of July 8, 2025:

(in thousands)

Merchandise inventories

Property and equipment

Operating lease right-of-use assets

Deferred revenue and customer deposits

Operating lease liabilities

Other liabilities

(1) Goodwill of $ 3.2 million, included in the RH Segment, represents the expected synergies from integrating the acquired business into our operations and is expected to be deductible for tax purposes.

Results of operations of the acquired company have been included in our consolidated statements of income since July 8, 2025, the acquisition date.

Pro forma results of the acquired business have not been presented as the results were not considered material to our consolidated financial statements for all fiscal periods presented and would not have been material had the acquisition occurred at the beginning of fiscal 2023.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 89

6 unchanged sentences

(in thousands)

January 28, 2023

Foreign currency translation

February 3, 2024

1 unchanged sentence

February 1, 2025

Foreign currency translation

January 31, 2026

(1) Waterworks reporting unit goodwill of $ 51 million recognized upon acquisition in fiscal 2016 was fully impaired as of fiscal 2018.

6 unchanged sentences

In December 2024, we acquired 50 percent of the membership interests of one of the Member LLCs from the same development partner for no consideration.

As a result, we own 100 percent of the membership interests and this Member LLC is no longer a variable interest entity as of February 1, 2025.

As a result, we own 100 percent of the membership interests and this Member LLC was no longer a variable interest entity as of February 1, 2025.

No distribution to the former member of this entity was required as a result of the transaction.

As of February 1, 2025, of the remaining seven Member LLCs, we hold a 50 percent membership interest in six of the Member LLCs, and the remaining noncontrolling interest of 50 percent in each Member LLC is held by the same development partner.

In one Member LLC, we hold approximately 75 percent membership interest with the remaining noncontrolling interest of approximately 25 percent held by the same development partner as of February 1, 2025.

As of January 31, 2026, of the remaining seven Member LLCs, we hold a 50 percent membership interest in six of the Member LLCs, and the remaining noncontrolling interest of 50 percent in each Member LLC is held by the same development partner.

In one Member LLC, we hold approximately 75 percent membership interest with the remaining noncontrolling interest of approximately 25 percent held by the same development partner.

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PART II — FINANCIAL STATEMENTS

The Member LLCs are qualitatively determined to be VIEs due to their having insufficient equity investment at risk to finance their activities without additional subordinated financial support.

2 unchanged sentences

Accordingly, we are the primary beneficiary of the Member LLCs and we consolidate the results of operations, financial condition and cash flows of the Member LLCs in our consolidated financial statements.

Six locations represent current or future RH locations and are included in the RH Segment, three of which are operational as of February 1, 2025.

Six locations represent current or future RH locations and are included in the RH Segment, four of which are operational as of January 31, 2026.

One location represents property, the purpose of which is use by RH or others related to developing, operating and selling such property, and is part of the Real Estate segment.

90 | FORM 10-K

PART II — FINANCIAL STATEMENTS

In fiscal 2022, we recognized compensation expense of $ 4.5 million related to the equity interests given to the noncontrolling interest holders of the consolidated VIEs, of which $ 3.6 million was recorded to additional paid-in capital and $ 0.9 million was recorded to other non-current obligations on the consolidated balance sheets.

The additional paid-in capital portion relates to equity-classified compensation arrangements and represents the fair-value-based measure of the equity interests upon the noncontrolling interest holders being admitted as a member of the VIEs.

The other non-current obligations portion relates to liability-classified compensation arrangements and represents the fair-value-based measure of the equity interests at the end of the reporting period, which was $ 0.9 million as of both February 1, 2025 and February 3, 2024.

There are no explicit or implicit vesting conditions associated with these compensation arrangements.

We measure the noncontrolling interests in the consolidated variable interest entities using the distribution provisions set out in the operating agreements of each Member LLC.

As of February 1, 2025 and February 3, 2024, the noncontrolling interest holders had no claim to the net assets of each Member LLC based upon such distribution provisions.

Accordingly, we did not recognize any noncontrolling interests in fiscal 2024, fiscal 2023 and fiscal 2022.

As of January 31, 2026 and February 1, 2025, the noncontrolling interest holders had no claim to the net assets of each Member LLC based upon such distribution provisions.

Accordingly, we did not recognize any noncontrolling interests in fiscal 2025, fiscal 2024 or fiscal 2023.

The carrying amounts and classification of the VIEs’ assets and liabilities included in the consolidated balance sheets were as follows:

8 unchanged sentences

Total current liabilities

Real estate loans—net (2)

Other non-current obligations

Real estate loan—net (2)

Other non-current liabilities

Total liabilities

(1) Includes $ 54 million and $ 77 million of construction in progress as of February 1, 2025 and February 3, 2024, respectively, which is included in “building and building improvements” within property and equipment —net .

(2) Real estate loans are secured by the assets of each respective Member LLC and the associated creditors do not have recourse against RH’s general assets.

On August 3, 2022, a Member LLC as the borrower executed a Secured Promissory Note (the “Secured Promissory Note”) with a third-party in an aggregate principal amount equal to $ 2.0 million with a maturity date of August 1, 2032.

On December 1, 2024, the maturity date of the Secured Promissory Note was amended to December 1, 2025.

The Secured Promissory Note bears interest at a fixed rate per annum equal to 6.00 % .

In December 2024, we acquired the remaining 50 % membership interest of this Member LLC from our development partner, with the result of this entity becoming a wholly-owned subsidiary and not a VIE as of February 1, 2025.

Therefore, as of February 1, 2025, the real estate loan is no longer presented as a VIE liability in the table above.

The outstanding balance under this debt agreement is included in other current liabilities on the consolidated balance sheets as of February 1, 2025.

(1) Includes $ 21 million and $ 54 million of construction in progress as of January 31, 2026 and February 1, 2025, respectively, which is included in “building and building improvements” within property and equipment —net .

(2) On September 9, 2022, a Member LLC as the borrower executed a Promissory Note (the “Promissory Note”) with a third-party bank in an aggregate principal amount equal to $ 16 million with a maturity date of September 9, 2032.

The Promissory Note bears interest at a fixed rate per annum equal to 5.37 % until September 15, 2027, on which date the interest rate will reset based on the five-year treasury rate plus 2.00 % , subject to a total interest rate floor of 3.00 % .

The Promissory Note is secured by the assets of the Member LLC and the creditor does not have recourse against RH’s general assets.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 91

The current obligations of the real estate loans—net of $ 0.3 million and $ 0.1 million as of February 1, 2025 and February 3, 2024, respectively, are included in other current liabilities on the consolidated balance sheets.

Equity Method Investments

3 unchanged sentences

Accordingly, we account for these investments using the equity method of accounting.

As of February 1, 2025 and February 3, 2024, the aggregate balance of the investment in the Aspen LLCs was $ 124 million and $ 125 million, respectively.

As of February 1, 2025 and February 3, 2024, $ 3.7 million and $ 3.3 million, respectively, of a promissory notes receivable, inclusive of accrued interest, was outstanding with the managing member or entities affiliated with the managing member for the Aspen LLCs, which promissory notes were included in prepaid expense and other current assets on the consolidated balance sheets.

The promissory note related specifically to the Aspen LLCs is expected to be settled in cash and not converted into additional equity investment in the Aspen LLCs.

During fiscal 2024, fiscal 2023 and fiscal 2022, we recorded our proportionate share of equity method investments loss of $ 11 million, $ 11 million and $ 2.1 million, respectively, which is included on the consolidated statements of income with a corresponding decrease to the carrying value of equity method investments on the consolidated balance sheets as of February 1, 2025 and February 3, 2024.

We did not receive any distributions or have any undistributed earnings of equity method investments in any fiscal year.

We have previously made contractually required contributions to the Aspen LLCs in an aggregate amount of $ 135 million in prior periods.

As of February 1, 2025, we have made capital contributions of approximately $ 146 million to the Aspen LLCs.

Additionally, Waterworks has membership interests in two European entities that are equity method investments.

Our maximum exposure to loss with respect to these equity method investments is the carrying value of the equity method investments as of February 1, 2025.

As of January 31, 2026 and February 1, 2025, the aggregate balance of the investment in the Aspen LLCs was $ 115 million and $ 124 million, respectively.

We are the lessee for two lease arrangements within an Aspen LLC, one of which commenced as of January 31, 2026.

In March 2025, the Aspen LLC in which we hold a 70 percent interest sold its sole real estate property.

Subsequent to the property sale, we received $ 15 million from the Aspen LLC, which consisted of $ 2.9 million for the repayment of its outstanding promissory note to us, including accrued interest (refer to Note 4— Prepaid expenses and other assets ), and a capital distribution of $ 13 million.

Subsequent to the property sale, we received $ 15 million from the Aspen LLC, which consisted of $ 2.9 million for the repayment of its outstanding promissory note to us, including accrued interest (refer to Note 4— Prepaid Expense and Other A ssets ), and a capital distribution of $ 13 million.

The capital distribution of $ 13 million represented a return of our contributed capital of $ 7.9 million and a return on investment of $ 4.6 million.

As of January 31, 2026 and February 1, 2025, $ 1.2 million and $ 3.7 million, respectively, of promissory notes receivable, inclusive of accrued interest, were outstanding with the managing member or entities affiliated with the managing member for the Aspen LLCs, which promissory notes were included in prepaid expense and other current assets on the consolidated balance sheets.

The promissory note outstanding as of January 31, 2026 is expected to be settled in cash and not converted into additional equity investment in the Aspen LLCs.

Our proportionate share of equity method investments was income of $ 5.0 million in fiscal 2025 and a loss of $ 11 million in both fiscal 2024 and fiscal 2023, which is included on the consolidated statements of income.

Other than as described above, we did not receive any distributions or have any undistributed earnings of equity method investments in any fiscal year.

Additionally, Waterworks has 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 January 31, 2026.

We are not the primary beneficiary of either of these VIEs because we do not have the power to direct the activities of each VIE that most significantly impact the VIE’s economic performance.

Accordingly, we account for these investments using the equity method of accounting.

Our maximum exposure to loss with respect to these equity method investments is the carrying value of the equity method investments as of January 31, 2026.

92 | FORM 10-K

5 unchanged sentences

Accrued compensation

Accrued sales and use tax

Accrued sales, use and other indirect tax

Accrued occupancy

2 unchanged sentences

Accrued legal contingencies (1)

Accrued legal settlements (1)

Excise tax payable on share repurchases

Other accrued expenses

1 unchanged sentence

(1) Refer to Note 18 ¾ Commitments and Contingencies .

Reorganizations

We implemented and completed restructurings in the fourth quarter of fiscal 2024 and in the first quarter of fiscal 2023 that included workforce and expense reductions in order to improve and simplify our organizational structure, streamline certain aspects of our business operations and better position us for further growth.

The workforce reduction associated with the initiative included the elimination of numerous leadership and other positions throughout the organization.

During fiscal 2024 and fiscal 2023, we incurred total charges relating to the reorganizations of $ 4.4 million and $ 7.6 million, respectively, consisting primarily of severance costs and related taxes.

As of February 1, 2025, we had accruals of $ 3.4 million included within accounts payable and accrued expenses on the consolidated balance sheets related to the fiscal 2024 reorganization.

As of February 3, 2024, we had an immaterial amount accrued within accounts payable and accrued expenses on the consolidated balance sheets related to the fiscal 2023 reorganization, all of which was paid during fiscal 2024.

Other current liabilities consisted of the following:

3 unchanged sentences

Finance lease liabilities

Unredeemed gift card and merchandise credit liability

Federal tax payable

Unredeemed gift card and merchandise credit liability

Foreign tax payable

1 unchanged sentence

Total other current liabilities

Reorganizations

We implemented and completed restructurings in the second quarter of fiscal 2025 and in the fourth quarter of fiscal 2024 that included workforce and expense reductions in order to improve and simplify our organizational structure, streamline certain aspects of our business operations and better position us for further growth.

The workforce reduction associated with these initiatives included the elimination of numerous leadership and other positions throughout the organization.

During fiscal 2025 and fiscal 2024, we incurred total charges relating to the reorganizations of $ 1.2 million and $ 4.4 million, respectively, consisting primarily of severance costs and related taxes.

As of January 31, 2026 and February 1, 2025, we had accruals related to the reorganizations of $ 0.5 million and $ 3.4 million, respectively, which are included in accounts payable and accrued expenses on the consolidated balance sheets.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 93

NOTE 9—OTHER NON-CURRENT OBLIGATIONS

Other non-current obligations consisted of the following:

(in thousands)

Unrecognized tax benefits

Other non-current obligations

Total other non-current obligations

NOTE 10—LEASES

1 unchanged sentence

(in thousands)

Operating lease cost (1)

Operating lease costs (1)

Finance lease costs

7 unchanged sentences

(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.

Amounts include 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 for finance leases, which were not material in any period presented.

(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 in each of fiscal 2025, fiscal 2024 and fiscal 2023, as well as charges associated with common area maintenance of $ 11 million, $ 11 million and $ 9.1 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

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

2 unchanged sentences

Lease right-of-use assets and lease liabilities consisted of the following:

(in thousands)

BALANCE SHEET CLASSIFICATION

(in thousands)

Operating leases

15 unchanged sentences

(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.

(2) Recorded net of accumulated amortization of $ 384 million and $ 320 million as of January 31, 2026 and February 1, 2025, respectively.

(3) Includes $ 33 million and $ 35 million as of January 31, 2026 and February 1, 2025, 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 8— Variable Interest Entities .

2 unchanged sentences

FORM 10-K | 95

The maturities of lease liabilities were as follows as of February 1, 2025:

The maturities of lease liabilities were as follows as of January 31, 2026:

(in thousands)

1 unchanged sentence

Less—imputed interest (3)

( 1,141,874 )

Present value of lease liabilities

(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.

Total lease payments exclude $ 645 million of legally binding payments under the non-cancellable term for leases signed but not yet commenced under our accounting policy as of January 31, 2026, of which $ 26 million, $ 34 million, $ 36 million, $ 39 million and $ 40 million are expected to be paid in fiscal 2026, fiscal 2027, fiscal 2028, fiscal 2029 and fiscal 2030, respectively, and $ 470 million will be paid subsequent to fiscal 2030.

(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.

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Reclassification from other non-current assets to finance lease right-of-use assets

Reclassification from other non-current assets to operating lease right-of-use assets

Reclassification of finance lease right-of-use asset to property and equipment (3)

Reclassification of finance lease liability to property and equipment (3)

(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.

(1) Presented net of tenant allowances received subsequent to lease commencement of $ 15 million, $ 4.8 million and $ 2.4 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

(2) Right-of-use assets obtained in exchange for new operating lease liabilities exclude the impact from acquisitions of $ 4.3 million for fiscal 2025.

Refer to Note 6— Business Combinations .

(3) 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.

NOTE 11—CONVERTIBLE SENIOR NOTES

In June 2018, we issued in a private offering $ 300 million principal amount of 0.00 % convertible senior notes due 2023 and issued an additional $ 35 million principal amount in connection with the overallotment option granted to the initial purchasers as part of the offering (collectively, the “2023 Notes”).

In September 2019, we issued in a private offering $ 350 million principal amount of 0.00 % convertible senior notes due 2024 (the “2024 Notes” and, together with the 2023 Notes, the “Convertible Senior Notes” or the “Notes”).

As of February 1, 2025, there are no remaining obligations under the Convertible Senior Notes.

2023 Notes and 2024 Notes—Bond Hedge and Warrant Terminations and Note Repurchase

Bond Hedge and Warrant Terminations

During fiscal 2022, we entered into agreements with certain financial institutions (collectively, the “Counterparties”) to repurchase all of the warrants issued in connection with the 2023 Notes and 2024 Notes at an aggregate purchase price of $ 184 million and $ 203 million, respectively, subject to adjustment for a settlement feature based on pricing formulations linked to the trading price of our common stock over a volume weighted-average price measurement period of two or three days .

Upon entering into these agreements, the warrants were reclassified from stockholders’ equity to current liabilities on the consolidated balance sheets, and accordingly, we recognized a corresponding net loss on the fair value adjustment of the warrants of $ 4.2 million, which is classified within other expense—net on the consolidated statements of income.

Upon settlement of these agreements in April 2022, we paid an aggregate of $ 391 million in cash to terminate the warrants.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 97

During fiscal 2022, we entered into agreements with the Counterparties to terminate all of the convertible note bond hedges issued in connection with the 2023 Notes and 2024 Notes to receive an aggregate closing price of $ 56 million and $ 180 million, respectively, subject to adjustment for a settlement feature based on pricing formulations linked to the trading price of our common stock over a three day volume weighted-average price measurement period.

Upon entering into these agreements, the bond hedges were reclassified from stockholders’ equity to current assets on the consolidated balance sheets, and accordingly, we recognized a corresponding loss on the fair value adjustment of the settlement feature of $ 4.3 million, which is classified within other expense—net on the consolidated statements of income.

Upon settlement of these agreements in April 2022, we received an aggregate of $ 232 million in cash for the termination of the bond hedges.

Notes Repurchase

During the first quarter of fiscal 2022, we entered into individual privately negotiated transactions with a limited number of sophisticated investors that were holders of the 2023 Notes and/or the 2024 Notes to repurchase in cash $ 45 million and $ 135 million in aggregate principal amount of the 2023 Notes and 2024 Notes, respectively (the “Notes Repurchase”).

The Notes Repurchase provided for an estimated settlement cost of $ 325 million, subject to adjustment to the final settlement cost for an embedded feature based on pricing formulations linked to the trading price of our common stock over a five day volatility weighted-average price measurement period that ended on April 29, 2022.

Upon execution of these agreements, we determined that we had modified the debt substantially and applied an extinguishment accounting model.

Accordingly, we derecognized the aggregate principal amount of $ 180 million of the Convertible Senior Notes related to the extinguishment of such notes, and subsequently recognized a new financing liability with a fair value of $ 325 million.

An embedded derivative related to the conversion feature was bifurcated from the new financing liability and separately recognized with an initial fair value of $ 278 million, with the remaining $ 47 million classified as debt and recognized at its amortized cost basis.

Accordingly, we recognized a loss on extinguishment of debt of $ 146 million upon the execution of these agreements, inclusive of acceleration of amortization of debt issuance costs of $ 1.0 million.

Upon the remeasurement of the amount owed to the holders in terms of the embedded feature, a total of $ 314 million was paid in cash to the holders, representing the combined carrying value of the debt liability of $ 47 million, as well as the fair value of the bifurcated embedded equity derivative upon settlement of $ 267 million.

Accordingly, we recognized a gain on the fair value adjustment of the bifurcated embedded equity derivative of $ 11 million, which is classified within other expense — net on the consolidated statements of income.

During fiscal 2022, we entered into additional individual privately negotiated transactions with a limited number of sophisticated investors that were holders of the 2023 Notes and/or the 2024 Notes to repurchase in cash $ 18 million and $ 39 million in aggregate principal amount of the 2023 Notes and 2024 Notes, respectively (the “Additional Notes Repurchase”).

The Additional Notes Repurchase provided for an estimated settlement cost of $ 80 million, subject to adjustment to the final settlement cost for an embedded feature based on pricing formulations linked to the trading price of our common stock over a one day volatility weighted-average price measurement period occurring in July 2022.

Upon execution of these agreements, we determined that we had modified the debt substantially and applied an extinguishment accounting model.

Accordingly, we derecognized the aggregate principal amount of $ 57 million of the Convertible Senior Notes related to the extinguishment of such notes, and subsequently recognized a new financing liability with a fair value of $ 80 million.

An embedded derivative related to the conversion feature was bifurcated from the new financing liability and separately recognized with an initial fair value of $ 55 million, with the remaining $ 25 million classified as debt and recognized at its amortized cost basis.

Accordingly, we recognized a loss on extinguishment of debt of $ 23 million upon the execution of these agreements, inclusive of acceleration of amortization of debt issuance costs of $ 0.3 million.

Upon the remeasurement of the amount owed to the holders in terms of the embedded feature, a total of $ 82 million was paid in cash to the holders, representing the combined carrying value of the debt liability of $ 25 million, as well as the fair value of the bifurcated embedded equity derivative upon settlement of $ 57 million.

Accordingly, we recognized a loss on the fair value adjustment of the bifurcated embedded equity derivative of $ 1.5 million, which is classified within other expense—net on the consolidated statements of income.

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PART II — FINANCIAL STATEMENTS

$ 335 million 0.00 % Convertible Senior Notes due 2023

Prior to March 15, 2023 , the 2023 Notes were convertible only under the following circumstances:

(1) during any calendar quarter commencing after September 30, 2018, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130 % of the applicable conversion price on such trading day;

(2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $ 1,000 principal amount of 2023 Notes for such trading day was less than 98 % of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day;

or (3) upon the occurrence of specified corporate transactions.

The first condition was satisfied from the calendar quarter ended September 30, 2020 through the calendar quarter ended June 30, 2022 and, accordingly, holders were eligible to convert their 2023 Notes beginning in the calendar quarter ended December 31, 2020 and were eligible to convert their 2023 Notes through March 15, 2023 .

On and after March 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders were able to convert all or a portion of their 2023 Notes at any time, regardless of the foregoing circumstances.

During fiscal 2022, holders of $ 9.4 million in aggregate principal amount of the 2023 Notes elected to exercise the early conversion option and we elected to settle such conversions using combination settlement comprised of cash equal to the principal amount of the 2023 Notes converted and shares of our common stock for the remaining conversion value.

During fiscal 2022, we paid $ 9.4 million in cash and delivered 27,234 shares of common stock to settle the early conversion of these 2023 Notes.

We also received 27,208 shares of common stock from the exercise of a portion of the convertible bond hedge we purchased concurrently with the issuance of the 2023 Notes, and therefore, on a net basis issued 26 shares of our common stock in respect to such settlement of the converted 2023 Notes.

In June 2023, upon the maturity of the 2023 Notes, the remaining $ 1.7 million in aggregate principal amount of the 2023 Notes settled for $ 1.7 million in cash.

During fiscal 2023 through the maturity of the 2023 Notes, we issued in aggregate 1,931 shares at a par value of $ 0.0001 per share and, as a result, recognized $ 0 in additional paid-in capital on the consolidated statements of stockholders’ equity (deficit) upon settlement of the 2023 Notes.

$ 350 million 0.00 % Convertible Senior Notes due 2024

As of February 3, 2024, we had $ 42 million of 2024 Notes outstanding, which were classified as convertible senior notes due 2024—net within current liabilities.

Prior to June 15, 2024 , the 2024 Notes were convertible only under the following circumstances:

(1) during any calendar quarter commencing after December 31, 2019, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding calendar quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130 % of the applicable conversion price on such trading day;

(2) during the five consecutive business day period after any ten consecutive trading day period in which, for each day of that period, the trading price per $ 1,000 principal amount of 2024 Notes for such trading day was less than 98 % of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day;

or (3) upon the occurrence of specified corporate transactions.

The first condition was satisfied from the calendar quarter ended September 30, 2020 through the calendar quarter ended March 31, 2022.

However, this condition was not met for the calendar quarter ended June 30, 2022 through the calendar quarter ended June 30, 2023, but was met for the calendar quarter ended September 30, 2023.

This condition was not met for the calendar quarters ended December 31, 2023 or March 31, 2024.

On and after June 15, 2024 , until the close of business on the second scheduled trading day immediately preceding the maturity date, holders were able to convert all or a portion of their 2024 Notes at any time, regardless of the foregoing circumstances.

In September 2024, upon the maturity of the 2024 Notes, the $ 42 million in aggregate principal amount of the 2024 Notes settled for $ 42 million in cash and are no longer outstanding as of February 1, 2025.

During fiscal 2024 through the maturity of the 2024 Notes, we issued in aggregate 39,121 shares of common stock at a par value of $ 0.0001 per share and, as a result, recognized $ 0 in additional paid-in capital on the consolidated statements of stockholders’ equity (deficit) upon settlement of the 2024 Notes.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 99

NOTE 12—CREDIT FACILITIES

NOTE 11—CREDIT FACILITIES AND CONVERTIBLE SENIOR NOTES

The outstanding balances under our credit facilities were as follows:

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Total credit facilities

(1) Deferred financing fees associated with the asset based credit facility as of February 1, 2025 and February 3, 2024 were $ 1.5 million and $ 2.5 million, respectively, and are included in other non-current assets on the consolidated balance sheets.

(1) Deferred financing fees associated with the asset based credit facility as of January 31, 2026 and February 1, 2025 were $ 3.4 million and $ 1.5 million, respectively, and are included in other non-current assets on the consolidated balance sheets.

The deferred financing fees are amortized on a straight-line basis over the life of the revolving line of credit.

(2) Represents the Term Loan Credit Agreement (defined below), of which outstanding amounts of $ 1,915 million and $ 1,935 million were included in term loan—net on the consolidated balance sheets as of February 1, 2025 and February 3, 2024, respectively, and $ 20 million was included in other current liabilities on the consolidated balance sheets as of both February 1, 2025 and February 3, 2024.

(3) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $ 484 million and $ 489 million were included in term loan B-2—net on the consolidated balance sheets as of February 1, 2025 and February 3, 2024, respectively, and $ 5.0 million was included in other current liabilities on the consolidated balance sheets as of both February 1, 2025 and February 3, 2024.

In July 2025, Restoration Hardware, Inc.

entered into an amendment to the ABL Credit Agreement (defined below), which extended the maturity date of the revolving line of credit from July 29, 2026 to the earlier of (a) July 31, 2030 and (b) the date which is 91 days prior to the final stated maturity of the Term Loan Credit Agreement and any refinancing thereof.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 97

(2) Represents the Term Loan Credit Agreement (defined below), of which outstanding amounts of $ 1,895 million and $ 1,915 million were included in term loan B—net on the consolidated balance sheets as of January 31, 2026 and February 1, 2025, respectively, and $ 20 million of current maturities of long-term debt was included in other current liabilities on the consolidated balance sheets as of both January 31, 2026 and February 1, 2025.

(3) Represents the outstanding balance of the Term Loan B-2 (defined below) under the Term Loan Credit Agreement, of which outstanding amounts of $ 479 million and $ 484 million were included in term loan B-2—net on the consolidated balance sheets as of January 31, 2026 and February 1, 2025, respectively, and $ 5.0 million of current maturities of long-term debt was included in other current liabilities on the consolidated balance sheets as of both January 31, 2026 and February 1, 2025.

Asset Based Credit Facility

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On June 28, 2017, RHI entered into the Eleventh Amended and Restated Credit Agreement (as amended prior to July 29, 2021, the “11th A&R Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and the ABL Agent, which amended and restated the Original Credit Agreement.

On July 29, 2021, RHI entered into the Twelfth Amended and Restated Credit Agreement (as amended, the “ABL Credit Agreement”) by and among RHI, Restoration Hardware Canada, Inc., certain other subsidiaries of RH named therein as borrowers or guarantors, the lenders party thereto and the ABL Agent, which amended and restated the 11th A&R Credit Agreement.

The ABL Credit Agreement has a revolving line of credit with initial availability of up to $ 600 million, of which $ 10 million is available to Restoration Hardware Canada, Inc., and includes a $ 300 million accordion feature under which the revolving line of credit may be expanded by agreement of the parties from $ 600 million to up to $ 900 million if and to the extent the lenders revise their credit commitments to encompass a larger facility.

On July 31, 2025, RHI entered into an Amendment (the “Amendment”) to the Twelfth Amended and Restated Credit Agreement, (as amended prior to the Amendment, the “Existing ABL Credit Agreement” and as amended by the Amendment, the “ABL Credit Agreement”).

The Amendment, among other things, amends the ABL Credit Agreement to extend the maturity date of the ABL Credit Agreement to be the earlier of (a) July 31, 2030 and (b) the date which is 91 days prior to the final stated maturity of the Term Loan Credit Agreement and any refinancing thereof.

Under the ABL Credit Agreement, RHI has a revolving line of credit with initial availability of up to $ 600 million, of which (i) $ 10 million is available to the RH subsidiary, Restoration Hardware Canada, Inc., and (ii) $ 100 million is available to the RH subsidiary, RH Geneva Sàrl.

The ABL Credit Agreement includes a $ 300 million accordion feature under which the revolving line of credit may be expanded by agreement of the parties from $ 600 million to up to $ 900 million if and to the extent the lenders revise their credit commitments to encompass a larger facility.

The ABL Credit Agreement provides that the $ 300 million accordion, or a portion thereof, may be added as a first-in, last-out term loan facility if and to the extent the lenders revise their credit commitments for such facility.

The ABL Credit Agreement further provides that the borrowers may request a European sub-credit facility under the revolving line of credit or under the accordion feature for borrowing by certain European subsidiaries of RH if certain conditions set out in the ABL Credit Agreement are met.

The maturity date of the ABL Credit Agreement is July 29, 2026.

The availability of credit at any given time under the ABL Credit Agreement will be constrained by the terms and conditions of the ABL Credit Agreement, including the amount of collateral available, a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable, and other restrictions contained in the ABL Credit Agreement.

if certain conditions set out in the ABL Credit Agreement are met.

The availability of credit at any given time under the ABL Credit Agreement will be constrained by its terms and conditions, including the amount of collateral available, a borrowing base formula based upon numerous factors, including the value of eligible inventory and eligible accounts receivable, and other restrictions contained in the ABL Credit Agreement.

All obligations under the ABL Credit Agreement are secured by substantial assets of the loan parties, including inventory, receivables and certain types of intellectual property.

As a result, actual borrowing availability under the revolving line of credit could be less than the stated amount of the revolving line of credit (as reduced by the actual borrowings and outstanding letters of credit under the revolving line of credit).

Borrowings under the revolving line of credit (other than swing line loans, which are subject to interest at the base rate) bear interest, at the borrower’s option, at either the base rate or SOFR, subject to a 0.00 % SOFR floor (or, in the case of the Canadian borrowings, the “BA Rate” or the “Canadian Prime Rate”, as such terms are defined in the ABL Credit Agreement, for the Canadian borrowings denominated in Canadian dollars, or the “U.S.

Index Rate”, as such term is defined in the ABL Credit Agreement, or SOFR for Canadian borrowings denominated in U.S.

dollars) plus an applicable interest rate margin, in each case.

The ABL Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on granting certain liens, limitations on making certain loans or investments, limitations on incurring additional debt, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of a similar type and size.

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PART II — FINANCIAL STATEMENTS

Borrowings under the revolving line of credit (other than swing line loans, which are subject to interest at the base rate) bear interest, at the borrower’s option, at either the base rate or LIBOR subject to a 0.00 % LIBOR floor (or, in the case of the Canadian borrowings, the “BA Rate” or the “Canadian Prime Rate”, as such terms are defined in the ABL Credit Agreement, for the Canadian borrowings denominated in Canadian dollars, or the “U.S.

Index Rate”, as such term is defined in the ABL Credit Agreement, or LIBOR for Canadian borrowings denominated in United States dollars) plus an applicable interest rate margin, in each case.

The ABL Credit Agreement was amended in December 2022 to transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”).

The ABL Credit Agreement does not contain any significant financial ratio covenants or coverage ratio covenants other than a consolidated fixed charge coverage ratio (“FCCR”) covenant based on the ratio of (i) consolidated EBITDA to the amount of (ii) debt service costs plus certain other amounts, including dividends and distributions and prepayments of debt as defined in the ABL Credit Agreement (the “FCCR Covenant”).

1 unchanged sentence

The FCCR Covenant ratio is set at 1.0 and measured on a trailing twelve-month basis.

As of February 1, 2025, RHI was in compliance with the FCCR Covenant .

As of January 31, 2026, RHI was in compliance with the FCCR Covenant .

The ABL Credit Agreement requires a daily sweep of all cash receipts and collections to prepay the loans under the agreement while (i) an event of default exists or (ii) when the unused availability under the ABL Credit Agreement drops below the greater of (A) $ 40 million and (B) an amount based on 10 % of the total borrowing availability at the time.

The ABL Credit Agreement contains customary representations and warranties, events of default and other customary terms and conditions for an asset based credit facility.

As of February 1, 2025, RHI had $ 200 million in outstanding borrowings and $ 355 million of availability under the revolving line of credit, net of $ 45 million in outstanding letters of credit.

As a result of the FCCR Covenant that limits the last 10 % of borrowing availability, actual incremental borrowing available to RHI and the other affiliated parties under the revolving line of credit would be $ 295 million as of February 1, 2025.

As of January 31, 2026, RHI had $ 20 million in outstanding borrowings and $ 402 million of availability under the revolving line of credit, net of $ 43 million in outstanding letters of credit.

Term Loan Credit Agreement

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The Term Loan B-2 constitutes a separate class from the Term Loan B under the Term Loan Credit Agreement.

The Term Loan B-2 bears interest at an annual rate based on the SOFR subject to a 0.50 % SOFR floor plus an interest rate margin of 3.25 % plus a credit spread adjustment of 0.10 %.

The Term Loan B-2 bears interest at an annual rate based on SOFR subject to a 0.50 % SOFR floor plus an interest rate margin of 3.25 % plus a credit spread adjustment of 0.10 %.

Other than the terms relating to the Term Loan B-2, the terms of the Amended Term Loan Credit Agreement remain substantially the same as the terms of the existing Term Loan Credit Agreement, including representations and warranties, covenants and events of default.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 101

We incurred debt issuance costs of $ 28 million in fiscal 2022, in connection with the issuance of the Term Loan Credit Agreement.

No debt issuance costs were incurred in fiscal 2024 or fiscal 2023.

All obligations under the Term Loan B are guaranteed by certain domestic subsidiaries of RHI.

4 unchanged sentences

The borrowings under the Term Loan Credit Agreement may be prepaid in whole or in part at any time, subject to a prepayment premium of 1.0 % in connection with any repricing transaction within the six months following the closing date of the Term Loan Credit Agreement.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 99

The Term Loan Credit Agreement contains various restrictive and affirmative covenants, including required financial reporting, limitations on granting certain liens, limitations on making certain loans or investments, limitations on incurring additional debt, restricted payment limitations limiting the payment of dividends and certain other transactions and distributions, limitations on transactions with affiliates, along with other restrictions and limitations similar to those frequently found in credit agreements of a similar type and size, but provides for unlimited exceptions in the case of incurring indebtedness, granting of liens and making investments, dividend payments, and payments of material junior indebtedness, subject to satisfying specified leverage ratio tests.

1 unchanged sentence

The Term Loan Credit Agreement contains customary representations and warranties, events of default and other customary terms and conditions for a term loan credit agreement.

Convertible Senior Notes

As of February 1, 2025, there were no remaining obligations under the Convertible Senior Notes.

In June 2023, upon the maturity of the then remaining outstanding 2023 Notes, $ 1.7 million in aggregate principal amount of the 2023 Notes settled for $ 1.7 million in cash.

In September 2024, upon the maturity of the then remaining outstanding 2024 Notes, $ 42 million in aggregate principal amount of the 2024 Notes settled for $ 42 million in cash.

NOTE 12—FAIR VALUE MEASUREMENTS

12 unchanged sentences

The estimated fair value of the asset based credit facility approximates cost as the interest rate associated with the facility is variable and resets frequently (Level 2).

The estimated fair value and carrying value of the 2024 Notes, the Term Loan Credit Agreement and the real estate loans were as follows:

The estimated fair value and carrying value of the Term Loan Credit Agreement and the real estate loans were as follows:

(in thousands)

Convertible senior notes due 2024

Term loan B-2

Real estate loans

(1) The principal carrying value of the 2024 Notes excludes the discounts upon original issuance, discounts and commissions payable to the initial purchasers and third-party offering costs, as applicable.

(1) The principal carrying values of the Term Loan B and Term Loan B-2 represent the outstanding amount under each class and exclude discounts upon original issuance and third-party offering costs.

The real estate loans represent the outstanding principal balance and exclude debt issuance costs.

The fair value of the 2024 Notes was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the trading price of our convertible notes, when available, our stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2).

As of February 1, 2025, the fair values of the Term Loan B and Term Loan B-2 were derived from observable bid prices (Level 1).

As of February 3, 2024, the fair values of the Term Loan B and Term Loan B-2 were derived from discounted cash flows using risk-adjusted rates (Level 2).

The principal carrying value of the real estate loans represents the outstanding principal balance and excludes debt issuance costs.

The fair values of the Term Loan B and Term Loan B-2 were derived from observable bid prices (Level 1).

The fair values of the real estate loans were derived from discounted cash flows using risk-adjusted rates (Level 2).

Fair Value Measurements—Non-Recurring

The fair value of the non-cash compensation related to noncontrolling interests in the Member LLCs in fiscal 2022, as discussed in “Consolidated Variable Interest Entities and Noncontrolling Interests” within Note 3— Significant Accounting Policies and Note 7— Variable Interest Entities , were determined based on unobservable (Level 3) inputs and valuation techniques.

In fiscal 2022, upon settlement of our convertible senior notes, including the settlements in which holders of the 2023 Notes and 2024 Notes elected to exercise the early conversion option, we recognized a gain or loss on extinguishment of debt in the consolidated statements of income, which represents the difference between the carrying value and fair value of the convertible senior notes immediately prior to the settlement date.

The fair value of the 2024 Notes related to the settlement of the early conversions was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, including the trading price of our convertible notes, when available, our common stock price and interest rates based on similar debt issued by parties with credit ratings similar to ours (Level 2).

The fair values of long-lived assets, such as property and equipment and lease right-of-use assets, as discussed in “Impairment—Long-Lived Assets” within Note 3— Significant Accounting Policies , were determined based on unobservable (Level 3) inputs and valuation techniques.

1 unchanged sentence

Expected future cash flows are estimated based on the highest and best use of the asset and take into consideration multiple factors, including but not limited to, location-level historical results, current trends, operating cash flow projections and market-based rental rates.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 103

NOTE 13—INCOME TAXES

Our income before income taxes, inclusive of our share of equity method investments loss—net, was as follows:

Our income before taxes and equity method investments was as follows:

(in thousands)

Our income tax expense (benefit) consisted of the following:

PART II — FINANCIAL STATEMENTS

FORM 10-K | 101

Our income tax expense consisted of the following:

(in thousands)

1 unchanged sentence

Total deferred tax expense (benefit)

Total income tax expense (benefit)

Total income tax expense

A reconciliation of taxes at the federal statutory tax rate to our provision for income taxes for fiscal 2025, in accordance with our adoption of ASU 2023-09, was as follows:

JANUARY 31, 2026

(dollars in thousands)

Income taxes at U.S.

federal statutory tax rate

State and local income taxes—net of federal tax effect (1)

Foreign tax effects

Effect of cross-border tax laws

Nontaxable or nondeductible items

Executive compensation under U.S.

Internal Revenue Code Section 162(m)

Other adjustments

Income tax expense and effective tax rate

(1) California and New York comprise the majority, or greater than 50% , of such tax.

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PART II — FINANCIAL STATEMENTS

A reconciliation of the federal statutory tax rate to our effective tax rate was as follows:

A reconciliation of taxes at the federal statutory tax rate to our provision for income taxes for fiscal 2024 and fiscal 2023, prior to our adoption of ASU 2023-09, was as follows:

Provision at federal statutory tax rate

5 unchanged sentences

Federal rehabilitation tax credit

Tax impact of convertible senior notes repurchase

Tax rate adjustments and other

8 unchanged sentences

(in thousands)

Non-current deferred tax assets (liabilities)

Deferred tax assets (liabilities)

Lease liabilities

Interest expense carryforwards

Net operating loss carryforwards

Accrued expenses

Stock-based compensation

Accrued expenses

Merchandise inventories

Deferred revenue

Non-current deferred tax assets

Net operating loss carryforwards

Deferred tax assets

Valuation allowance

Non-current deferred tax assets—net

Property and equipment

Deferred tax assets—net

Lease right-of-use assets

Prepaid expense and other current assets

Tradename, trademarks and other intangible assets

Property and equipment

Prepaid expenses and other

Trademarks and other intangible assets

State benefit

Non-current deferred tax liabilities

Total non-current deferred tax assets—net

A reconciliation of our valuation allowance against deferred tax assets in certain state and foreign jurisdictions due to historical losses was as follows:

Deferred tax liabilities

Total deferred tax assets—net

Cash paid for income taxes by jurisdiction, net of refunds received, in accordance with our adoption of ASU 2023-09 was as follows:

(in thousands)

State and local

New York City

Other state and local

Other jurisdictions

Cash paid for income taxes—net of refunds received

(1) Inclusive of $ 15 million received related to a federal tax receivable from a carryback claim.

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PART II — FINANCIAL STATEMENTS

Cash paid for income taxes in fiscal 2024 and fiscal 2023 was $ 21 million and $ 14 million, respectively, and we received refunds of $ 9.1 million in fiscal 2024.

Refunds received in fiscal 2023 were immaterial.

A reconciliation of our valuation allowance against deferred tax assets in certain state and foreign jurisdictions was as follows:

(in thousands)

Balance at beginning of fiscal year

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Balance at end of fiscal year

As of February 1, 2025, we had federal, state and foreign net operating loss carryovers of $ 96 million, $ 104 million and $ 29 million, respectively.

The federal net operating losses do not expire.

The state net operating loss carryovers will begin to expire in 2025 and continue to expire at various times depending upon individual state carryforward rules.

The foreign net operating losses will begin to expire in 2028.

As of January 31, 2026, we had state and foreign net operating loss carryovers of $ 136 million and $ 27 million, respectively.

As of January 31, 2026, we had no federal net operating loss carryover.

The state net operating loss carryovers will begin to expire in fiscal 2026 and continue to expire at various times depending upon individual state carryforward rules.

The foreign net operating losses will begin to expire in fiscal 2045.

Internal Revenue Code Section 382 and similar state rules place a limitation on the amount of taxable income which can be offset by net operating loss carryforwards after a change in ownership (generally greater than 50 % change in ownership).

We cannot give any assurances that we will not undergo an ownership change in the future resulting in further limitations on utilization of net operating losses.

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PART II — FINANCIAL STATEMENTS

We cannot give any assurance that we will not undergo an ownership change in the future resulting in further limitations on utilization of net operating losses.

A reconciliation of the exposures related to unrecognized tax benefits was as follows:

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Balance at end of fiscal year

As of February 1, 2025, $ 2.7 million of our unrecognized tax benefits would reduce income tax expense and the effective tax rate, if recognized.

As of January 31, 2026, $ 2.8 million of our unrecognized tax benefits would reduce income tax expense and the effective tax rate, if recognized.

The remaining unrecognized tax benefits would offset other deferred tax assets, if recognized.

As of February 1, 2025, we have $ 0.4 million of exposures related to unrecognized tax benefits that are expected to decrease in the next 12 months .

In October 2017, we filed an amended federal tax return claiming a $ 5.4 million refund, however, no income tax benefit has been recorded in any fiscal year given the technical nature and amount of the refund claim.

As of the first quarter of fiscal 2024, we are no longer appealing this refund claim and have reversed the receivable and related reserve.

We are subject to taxation in the United States and various states and foreign jurisdictions.

As of February 1, 2025, we are subject to examination by the tax authorities for fiscal 2021 through fiscal 2024.

With few exceptions, as of February 1, 2025, we are no longer subject to U.S.

federal, state, local, or foreign examinations by tax authorities for years prior to fiscal 2021.

As of January 31, 2026, we are subject to examination by the tax authorities for fiscal 2022 through fiscal 2025 and are currently under federal audit for fiscal 2021 and 2022.

With few exceptions, as of January 31, 2026, we are no longer subject to U.S.

federal, state or local, or foreign examinations, by tax authorities for years prior to fiscal 2022.

We have not provided U.S.

income or foreign withholding taxes on the undistributed earnings of our foreign subsidiaries as of February 1, 2025 because we intend to permanently reinvest such earnings outside of the U.S.

income or foreign withholding taxes on the undistributed earnings of our foreign subsidiaries as of January 31, 2026 because we intend to permanently reinvest such earnings outside of the United States.

If these foreign earnings were to be repatriated in the future, the related U.S.

tax liability is expected to be immaterial, due to the participation exemption put in place in the Tax Cuts and Jobs Act of 2017.

The Organization for Economic Cooperation and Development (“OECD”) proposed model rules to ensure a minimal level of taxation (commonly referred to as Pillar II) and the European Union member states have agreed to implement Pillar II’s proposed global corporate minimum tax rate of 15 %.

Many countries are actively considering, have proposed or have enacted changes to their tax laws based upon the Pillar II proposals, which could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

To mitigate the administrative burden for multinational enterprises in complying with the OECD Global Anti-Base Erosion rules during the initial years of implementation, the OECD developed the temporary “Transitional Country-by-Country Safe Harbor.” We considered the applicable tax law changes from Pillar II implementation in the relevant countries in which we operate, and there is no material impact to our tax provision for fiscal 2024.

We will continue to evaluate the impact of these tax law changes in future reporting periods.

On July 4, 2025, the United States enacted tax legislation through the H.R.1 Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”), which implemented several corporate tax law changes taking effect in fiscal 2025, including, but not limited to, limitations on deductions for interest expense, changes to the taxation of foreign activity and reinstatement of one hundred percent bonus depreciation for eligible property.

A number of other provisions of the OBBBA will not take effect until fiscal 2026, including various changes to existing international tax provisions.

The impacts of the OBBBA are reflected in our results for the year ended January 31, 2026.

We will continue to monitor any future changes in our business or interpretations of the new tax law that could affect our tax position in subsequent periods.

PART II — FINANCIAL STATEMENTS

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Weighted-average shares—diluted

(1) The dilutive effect of the 2023 Notes and 2024 Notes is calculated under the if-conv erted method, which assumes share settlement of the entire convertible debt instrument.

(1) The dilutive effect of the 2023 Notes and 2024 Notes is calculated under the if-converted method, which assumes share settlement of the entire convertible debt instrument.

The 2023 Notes and 2024 Notes matured in June 2023 and September 2024, respectively, and did not have an impact on our diluted share count post-maturity.

Refer to Note 11— Convertible Senior Notes.

The following number of options and restricted stock units, as well as shares issuable under convertible senior notes, were excluded from the calculation of diluted net income per share because their inclusion would have been anti-dilutive:

Refer to Note 11— Credit Facilities and Convertible Senior Notes.

The following number of options and restricted stock units were excluded from the calculation of diluted net income per share because their inclusion would have been anti-dilutive:

Restricted stock units

Convertible senior notes

NOTE 15—SHARE REPURCHASE PROGRAM AND SHARE RETIREMENT

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On June 2, 2022, the Board of Directors authorized an additional $ 2,000 million for the purchase of shares of our outstanding common stock, increasing the total authorized size of the share repurchase program to $ 2,450 million (the “Share Repurchase Program”).

We did not repurchase any shares of our common stock under the Share Repurchase Program during fiscal 2024.

As of February 1, 2025, $ 201 million remains available for future share repurchases under this program.

In fiscal 2022, we repurchased 3,719,550 shares of our common stock under the Share Repurchase Program at an average price of $ 268.83 per share, for an aggregate repurchase amount of approximately $ 1,004 million, inclusive of $ 3.7 million of excise taxes.

We did no t repurchase any shares of our common stock under the Share Repurchase Program during fiscal 2025 or fiscal 2024.

As of January 31, 2026, $ 201 million remains available for future share repurchases under this program.

In fiscal 2023, we repurchased 3,887,965 shares of our common stock under the Share Repurchase Program at an average price of $ 321.28 per share, for an aggregate repurchase amount of approximately $ 1,261 million, inclusive of $ 12 million of excise taxes.

The excise tax liability of $ 12 million, which was included in accounts payable and accrued expenses on the consolidated balance sheets as of February 3, 2024, was paid in October 2024 and is no longer outstanding as of February 1, 2025.

Share Retirements

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As a result of this retirement, we reclassified a total of $ 10 million and $ 1,251 million from treasury stock to additional paid-in capital and retained earnings (accumulated deficit) , respectively, on the consolidated balance sheets and consolidated statements of stockholders’ equity (deficit).

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PART II — FINANCIAL STATEMENTS

In fiscal 2023, we retired 3,887,965 shares of common stock related to shares we repurchased under the Share Repurchase Program.

NOTE 16—STOCK-BASED COMPENSATION

The Restoration Hardware 2012 Stock Incentive Plan (the “Stock Incentive Plan”) was adopted on November 1, 2012.

The Stock Incentive Plan provides for the grant of incentive stock options to our employees, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

The Restoration Hardware 2012 Stock Option Plan (the “Option Plan”) was adopted on November 1, 2012 and on such date 6,829,041 fully vested options were granted under this plan to certain of our employees and advisors.

Aside from these options granted on November 1, 2012, no other awards were granted under the Option Plan.

The Stock Incentive Plan provided for the grant of incentive stock options to our employees and the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, cash-based awards and any combination thereof to our employees, directors and consultants and our parent and subsidiary corporations’ employees, directors and consultants.

The Restoration Hardware 2012 Stock Option Plan (the “Option Plan”) was adopted on November 1, 2012.

On November 1, 2022, both the Stock Incentive Plan and Option Plan expired.

Upon expiration of the Stock Incentive Plan, a total of 1,607,508 shares that were available for future issuance under the plan were cancelled and were no longer available for the grant of awards under the plan.

106 | FORM 10-K

PART II — FINANCIAL STATEMENTS

The RH 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”, together with the Stock Incentive Plan and Option Plan, “the Plans”) was approved by stockholders on April 4, 2023.

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Shares issued as a result of award exercises under the 2023 Stock Incentive Plan will be funded with the issuance of new shares.

As of February 1, 2025, a total of 2,235,091 shares were available for future issuance under the 2023 Stock Incentive Plan.

As of January 31, 2026, a total of 2,046,492 shares were available for future issuance under the 2023 Stock Incentive Plan.

Stock Options Under the Plans

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Outstanding—February 1, 2025

PART II — FINANCIAL STATEMENTS

FORM 10-K | 109

Outstanding—January 31, 2026

The fair value of stock options granted was estimated on the date of grant using the following weighted-average assumptions:

YEAR ENDED

Expected volatility

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Additional information about stock options was as follows:

YEAR ENDED

(in thousands, except per share amounts)

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Fair value of stock options vested

Information about stock options outstanding, vested or expected to vest, and exercisable as of February 1, 2025 was as follows:

PART II — FINANCIAL STATEMENTS

FORM 10-K | 107

Information about stock options outstanding, vested or expected to vest, and exercisable as of January 31, 2026 was as follows:

OPTIONS OUTSTANDING

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Vested or expected to vest

110 | FORM 10-K

PART II — FINANCIAL STATEMENTS

Stock Options Under the Plans

Options outstanding, vested or expected to vest, and exercisable as of February 1, 2025 were as follows:

Options outstanding, vested or expected to vest, and exercisable as of January 31, 2026 were as follows:

REMAINING TERM

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Stock-based compensation expense (1)

(1) On October 18, 2020, our Board of Directors granted Mr.

Friedman an option to purchase 700,000 shares of our common stock with an exercise price equal to $ 385.30 per share under the Stock Incentive Plan.

The option will result in aggregate non-cash stock compensation expense of $ 174 million.

Amounts presented include $ 4.5 million, $ 9.6 million and $ 18 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively, related to Mr.

(1) On October 18, 2020, our Board of Directors granted our Chairman and Chief Executive Officer, Gary Friedman, an option to purchase 700,000 shares of our common stock with an exercise price equal to $ 385.30 per share under the Stock Incentive Plan.

The option resulted in aggregate non-cash stock compensation expense of $ 174 million, of which, $ 0.9 million, $ 4.5 million and $ 9.6 million was recognized in fiscal 2025, fiscal 2024 and fiscal 2023, respectively, related to Mr.

Friedman’s option.

As of February 1, 2025, the total unrecognized compensation expense related to unvested options was $ 128 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 4.6 years.

In addition, as of February 1, 2025, the total unrecognized compensation expense related to the fully vested option grant made to Mr.

Friedman in October 2020 was $ 0.9 million, which will be recognized in the first quarter of fiscal 2025.

Compensation expense for this award was fully recognized as of fiscal 2025.

No stock-based compensation cost has been capitalized in the accompanying consolidated financial statements.

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PART II — FINANCIAL STATEMENTS

As of January 31, 2026, the total unrecognized compensation expense and weighted-average remaining term of unvested awards were as follows:

REMAINING TERM

(in thousands)

Unvested options

Unvested restricted stock and restricted stock units

Restricted Stock Awards Under the Plans

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Outstanding—February 1, 2025

Outstanding—January 31, 2026

Additional information about restricted stock awards was as follows:

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Grant date fair value of awards released (in thousands)

PART II — FINANCIAL STATEMENTS

FORM 10-K | 111

Stock-based compensation expense related to restricted stock awards, which is included in selling, general and administrative expenses on the consolidated statements of income, was as follows:

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Stock-based compensation expense

As of February 1, 2025, the total unrecognized compensation expense related to unvested restricted stock awards was $ 6.8 million, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.1 years.

Compensation Related to Consolidated VIEs

Refer to Note 7— Variable Interest Entities for details of non-cash compensation related to consolidated variable interest entities in fiscal 2022.

NOTE 17—EMPLOYEE BENEFIT PLANS

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We made no contributions to the 401(k) plan during fiscal 2025, fiscal 2024 or fiscal 2023.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 109

NOTE 18—COMMITMENTS AND CONTINGENCIES

We had no material off balance sheet commitments as of February 1, 2025.

We had no material off-balance sheet commitments as of January 31, 2026.

Contingencies

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In addition, we are subject to governmental and regulatory examinations, information requests, and investigations from time to time at the state and federal levels.

Certain legal proceedings that we currently face involve various class-action allegations, including cases related to our employment practices, the application of state wage-and-hour laws, product liability and other causes of action.

We currently face certain legal proceedings that involve complex litigation, including class action cases, matters related to our employment practices, the application of state wage-and-hour laws, product liability and other causes of action.

We have faced similar litigation in the past.

Due to the inherent difficulty of predicting the course of legal actions related to complex legal matters, including class-action allegations, such as the eventual scope, duration or outcome, we may be unable to estimate the amount or range of any potential loss that could result from an unfavorable outcome arising from such matters.

Due to the inherent difficulty of predicting the course of complex legal actions, including class-action allegations, such as the eventual scope, duration or outcome, we may be unable to estimate the amount or range of any potential loss that could result from an unfavorable outcome arising from such matters.

Our assessment of these legal proceedings, as well as other lawsuits, could change based upon the discovery of facts that are not presently known or developments during the course of the litigation.

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Accordingly, the ultimate costs to resolve litigation, including class action cases, may be substantially higher or lower than our estimates.

112 | FORM 10-K

PART II — FINANCIAL STATEMENTS

With respect to such contingencies, we review the need for any loss contingency reserves and establish reserves when, in the opinion of our senior leadership team, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated.

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Legal costs related to such matters are expensed as incurred.

110 | FORM 10-K

PART II — FINANCIAL STATEMENTS

NOTE 19—SEGMENT REPORTING

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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 variable interest entities and have operations that are not directly related to the activities of the retail operating segments.

The Real Estate segment represents operations associated with certain of our equity method investments and consolidated VIEs that have operations 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.

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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 expense—net, income tax expense (benefit) and our share of equity method investments loss—net.

Segment adjusted operating income excludes (i) certain asset impairments, (ii) legal settlements, (iii) non-cash compensation amortization related to an option grant made to Mr.

Friedman in October 2020, (iv) severance costs associated with a reorganization, (v) costs associated with product recalls, (vi) employer payroll tax expense related to option exercises by Mr.

Friedman, (vii) professional fees related to the 2023 Notes and 2024 Notes transactions (refer to Note 11— Convertible Senior Notes ), (viii) non-cash compensation attributed to the noncontrolling interests holder of our consolidated variable interest entities (refer to Note 7— Variable Interest Entities ), (ix) compensation settlements related to the Rollover Units and Profit Interest Units in the Waterworks subsidiary and (x) gain on sale of building and land.

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 net (income) loss.

Segment adjusted operating income excludes (i) certain asset impairments, (ii) product recall, (iii) severance costs associated with reorganizations, (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.

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Asset impairments

Non-cash compensation

Product recall

Reorganization related costs

Non-cash compensation

Contract termination settlement—net

Legal settlements—net

Recall accrual

Employer payroll taxes on option exercises

Professional fees

Non-cash compensation related to consolidated VIEs

Compensation settlements

Gain on sale of building and land

Income from operations

Operating income

Interest expense—net

Loss on extinguishment of debt

Other expense—net

Other (income) expense—net

Income before taxes and equity method investments

(1) All intercompany transactions are immaterial and have been eliminated.

(1) All intercompany transactions are not material 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 .

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PART II — FINANCIAL STATEMENTS

In fiscal 2024, fiscal 2023 and fiscal 2022, 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 $ 11 million, $ 11 million and $ 2.1 million, respectively.

The share of loss from equity method investments for the Waterworks segment was immaterial in all fiscal periods presented.

The Real Estate segment share of equity method investments operations, which is the measure of segment profitability reviewed by the CODM to evaluate performance internally for the Real Estate segment, was income of $ 4.3 million in fiscal 2025 and loss of $ 11 million in both fiscal 2024 and fiscal 2023.

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:

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Total depreciation and amortization

(1) There is no expense for the Real Estate segment since all assets represent construction in progress.

(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:

TRADEMARKS AND

OTHER INTANGIBLE

EQUITY METHOD

(in thousands)

Tradenames, trademarks and other intangible assets (2)

Equity method investments (3)

February 1, 2025

January 31, 2026

(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, whereby we hold a 50 percent membership interest in one entity and an approximately 25 percent membership interest in the other, and we are not the primary beneficiary of these VIEs.

Refer to Note 7— Variable Interest Entities related to the Real Estate segment equity method investments.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 113

We are domiciled in the United States and primarily operate our retail locations and outlets in the United States.

As of February 1, 2025, we operated the following number of retail locations and outlets outside the United States:

As of January 31, 2026, we operated the following number of retail locations and outlets outside the United States:

United Kingdom

(1) Geographic revenues generated outside of the United States did not exceed 10% of total consolidated net revenues in any fiscal period presented.

PART II — FINANCIAL STATEMENTS

FORM 10-K | 115

Long-lived assets by geographic location were as follows:

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Total long-lived assets (1)

(1) As of January 31, 2026 and February 1, 2025, includes $ 128 million and $ 148 million, respectively, of deferred tax assets, substantially all of which are related to North America.

NOTE 20—SUBSEQUENT EVENTS

In February 2026, we entered into a settlement agreement to resolve litigation pertaining to credit card interchange fees in which we received approximately $ 30 million, net of legal costs, in March 2026.

We expect to recognize this settlement as a gain within selling, general and administrative expenses on the consolidated statements of income in the first quarter of fiscal 2026.

In February 2026, the U.S.

Supreme Court invalidated certain tariffs imposed under the International Emergency Economic Powers Act (the “incremental tariffs”).

Subsequently, new tariffs were imposed pursuant to alternative statutory authority and are scheduled to expire after 150 days absent Congressional authorization.

Given the evolving trade policy environment, we continue to monitor the impact of these actions on our operations and consolidated financial statements, including our ability to recover incremental tariffs that we have paid.

114 | FORM 10-K

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data