Rh (0KTF.L) Q1 2025 Earnings Report

Revenue and margin fundamentals:
- Revenue: $813,952,000; YoY change: -1.89%; QoQ change: +0.19%
- Gross Profit: $355,333,000; Gross Margin: 43.66%; YoY margin change: -5.18%; QoQ: -2.06%
Profitability profile:
- Operating Income: $55,911,000; Operating Margin: 6.87%; YoY: -41.84%; QoQ: -20.50%
- Net Income: $8,039,000; Net Margin: 0.99%; YoY: -72.23%; QoQ: -42.24%
- EPS: $0.43; Diluted EPS: $0.40; YoY EPS: -72.61%; QoQ: -42.67%
Cash flow and capital allocation:
- Operating Cash Flow: $86,641,000
- Capital Expenditures: $-55,334,000
- Free Cash Flow: $31,307,000
- Net Change in Cash: $15,671,000; Cash at End of Period: $46,084,000; Cash at Beginning: $30,413,000
Balance sheet and liquidity:
- Total Assets: $4,650,256,000; Total Liabilities: $4,761,024,000; Total Stockholders’ Equity: $(110,768,000)
- Current Assets: $1,279,933,000 vs Current Liabilities: $934,094,000 → Current Ratio ~1.37x
- Inventory: $1,007,843,000; Accounts Receivable: $114,525,000; Cash & Equivalents: $46,084,000
- Long-Term Debt: $3,802,754,000; Short-Term Debt: $135,360,000; Net Debt: ~$3,892,030,000
- Equity quality: Negative shareholders’ equity, indicating a levered capital structure despite sizable asset base
Notes on efficiency and leverage:
- Inventory constitutes a significant portion of current assets, contributing to a modest quick ratio (~0.29x) but a healthier current ratio due to inventory carrying.
- Heavy interest expense (~$58.18 million in the quarter) and net non-operating charges weigh on earnings despite positive operating cash flow.
- The company maintains a robust asset base (PPE and goodwill) but a mismatched debt/equity position highlights solvency and refinancing risk.