Name: Net Profit Margin

Definition: Net profit margin shows how much profit remains after paying all costs — including operating expenses, interest, and taxes — for every dollar of sales. A higher margin means the business is efficient and keeps more of its sales as bottom-line profit. Falling margins may signal rising costs or pricing pressure.

Interpretation:
• In '2022', RH's net profit margin was 18.3%, measuring the overall profitability of the company. Industry average for Other Specialty Stores in '2022' stood at -32.8%.
• In '2023', RH's net profit margin was 14.7%, measuring the overall profitability of the company. The decline from '2022' may indicate some operational or financial challenges. Industry average for Other Specialty Stores in '2023' stood at -17.4%. Industry average increased by 15.4% compared to previous year.
• In '2024', RH's net profit margin was 4.2%, measuring the overall profitability of the company. The decline from '2023' may indicate some operational or financial challenges. Industry average for Other Specialty Stores in '2024' stood at 10.3%. Industry average increased by 27.7% compared to previous year.
• In '2025', RH's net profit margin was 2.3%, measuring the overall profitability of the company. The decline from '2024' may indicate some operational or financial challenges. Industry average for Other Specialty Stores in '2025' stood at -0.9%. Industry average declined by 11.3% from previous year.
Overall, RH's net profit margin has been volatile but showed a downward trend over the past 4 years.

Formula: Net Profit Margin = Net Income / Revenue

Good Range: Ranges 5%-20% for many industries.