Restoration Hardware 2015 Annual Report Download - page 44

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(6) Leased selling square footage is retail space at our stores used to sell our products. Leased selling square footage excludes
backrooms at retail stores used for storage, office space or similar matters, as well as exterior sales space located outside a store,
such as courtyards, gardens and rooftops. Leased selling square footage for fiscal 2013 and fiscal 2014 includes approximately
5,000 square feet related to one owned store location. Leased selling square footage for fiscal 2015 includes approximately
13,000 square feet related to two owned store locations.
(7) Weighted-average leased selling and total square footage is calculated based on the number of days a gallery location was
opened during the period divided by the total number of days in the period.
(8) Retail sales per leased selling square foot is calculated by dividing total net revenues for all retail stores, comparable and non-
comparable, by the weighted-average leased selling square footage for the period.
(9) Capital expenditures include the acquisition of buildings and land. Additionally, during fiscal 2015 and fiscal 2014 we made
payments of $20.0 million and $9.3 million, respectively, to escrow accounts for future construction of next generation Design
Galleries.
The following table sets forth our consolidated statements of income as a percentage of total net revenues.
Year Ended
January 30, January 31, February 1,
2016 2015 2014
Statements of Income: 
N
et revenues ........................................................................... 100.0% 100.0 %
 100.0%
Cost of goods sold .................................................................. 64.3 63.0  64.1
Gross profit ....................................................................... 35.7 37.0  35.9
Selling, general and administrative expenses ......................... 26.9 28.1  32.4
Income from operations .................................................... 8.8 8.9  3.5
Interest expense—net ............................................................. 1.7 1.0  0.3
Income before income taxes .............................................. 7.1 7.9  3.2
Income tax expense ................................................................ 2.8 3.0  2.0
Net income ........................................................................ 4.3% 4.9 %
 1.2%
We operate a fully integrated distribution model through our stores, catalogs and websites. The following table shows a
summary of our stores net revenues, which include all sales for orders placed in galleries, as well as sales through outlet stores, and
our direct net revenues, which include sales through our catalogs and websites.
Year Ended
January 30, January 31, February 1,
2016 2015 2014
(in thousands)
Stores ...................................................................................... $ 1,083,600 $ 933,179 $ 818,372
Direct ...................................................................................... 1,025,406 934,243 732,589
Net revenues ...................................................................... $ 2,109,006 $ 1,867,422 $ 1,550,961
Fiscal 2015 Compared to Fiscal 2014
Net revenues
Net revenues increased $241.6 million, or 12.9%, to $2,109.0 million in fiscal 2015 compared to $1,867.4 million in fiscal 2014.
Comparable brand revenue growth was 11% in fiscal 2015. We had 69 and 67 retail stores open at January 30, 2016 and January 31,
2015, respectively. Stores sales increased $150.4 million, or 16.1%, to $1,083.6 million in fiscal 2015 compared to $933.2 million in
fiscal 2014. Direct sales increased $91.2 million, or 9.8%, to $1,025.4 million in fiscal 2015 compared to $934.2 million in fiscal
2014. The increase in net revenues was due to a combination of the expansion of existing product assortment and the introduction of
new products. In addition, we believe the increase in our weighted-average leased selling square footage from 572,000 square feet in
fiscal 2014 to 641,000 square feet in fiscal 2015 contributed to our net revenue growth. We believe the introduction of experiential
brand enhancing products and services, such as expanded design ateliers, interior design services and cafes, is increasing our brand
awareness, and has allowed us to further disrupt the highly fragmented home furnishings landscape and achieve market share gains.