Williams-Sonoma, Inc. announces fourth quarter and fiscal year 2016 results
Q4 GAAP EPS of $1.63 and non-GAAP EPS of $1.55
Q4 gross margin expands 100bps; merchandise inventories decrease 0.1%
Authorizes 5% dividend increase and provides financial guidance for Q1 and fiscal year 2017
Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the fourth fiscal quarter (“Q4 16”) and fiscal year 2016
(“FY 16”) ended January 29, 2017 versus the fourth fiscal quarter (“Q4 15”) and fiscal year 2015 (“FY 15”) ended January 31,
2016.
4 th QUARTER 2016 RESULTS
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Q4 16 net revenues decreased 0.3% to $1.582 billion versus $1.586 billion in Q4 15
with comparable brand revenue decreasing 0.9%. |
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Q4 16 operating margin was 13.6% versus 14.0% in Q4 15. |
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Q4 16 diluted earnings per share (“EPS”) was $1.63 versus $1.55 in Q4 15. Excluding
the net benefit of approximately $0.08 per diluted share from a one-time favorable tax adjustment, non-GAAP EPS was $1.55 in Q4
16. See Exhibit 1 for a reconciliation of GAAP to non-GAAP EPS. |
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Cash returned to stockholders totaled $69 million, comprising $36 million in stock
repurchases and $33 million in dividends. |
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FISCAL YEAR 2016 RESULTS
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FY 16 net revenues grew 2.2% to $5.084 billion versus $4.976 billion in FY 15 with
comparable brand revenue growth of 0.7%. |
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FY 16 operating margin was 9.3% versus 9.8% in FY 15. Excluding severance-related
reorganization charges, non-GAAP operating margin was 9.6% in FY 16. See Exhibit 1 for a reconciliation of GAAP to non-GAAP
operating margin. |
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FY 16 diluted earnings per share (“EPS”) was $3.41 versus $3.37 in FY 15. Excluding
severance-related reorganization charges of approximately $0.10 per diluted share and the net benefit of approximately $0.08
per diluted share from a one-time favorable tax adjustment, non-GAAP EPS was $3.43 in FY 16. See Exhibit 1. |
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Cash returned to stockholders totaled $285 million, comprising $151 million in stock
repurchases and $134 million in dividends. |
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Laura Alber, President and Chief Executive Officer, commented: “In 2016, we delivered revenues of over $5 billion, which
included another year of double-digit growth across West Elm, our newer businesses Rejuvenation and Mark and Graham, and our
company-owned global operations. Additionally, from an operational perspective, we executed one of our best holiday seasons and
delivered an improved customer experience which is at the center of everything we do.”
Alber continued, “Entering 2017, we will continue to improve performance and increase our competitive advantage, with a focus on
innovation in e-commerce, our products and service, and the retail experience. We will also remain relentlessly focused on
operational excellence throughout our supply chain, driving strategies that will improve our customers’ experience across all of
our brands. We are optimistic about the future and believe we have the infrastructure, strategies and talent in place to drive
long-term profitable growth for our shareholders.”
4 th QUARTER 2016 RESULTS
Net revenues decreased 0.3% to $1.582 billion in Q4 16 from $1.586 billion in Q4 15.
Comparable brand revenue in Q4 16 decreased 0.9% compared to 0.8% growth in Q4 15 as shown in the table below:
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4 th Quarter Comparable Brand Revenue Growth by Concept*
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Q4 16 |
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Q4 15 |
Pottery Barn |
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(4.1%) |
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(2.0%) |
Williams Sonoma |
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1.4% |
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0.9% |
West Elm |
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6.5% |
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12.8% |
Pottery Barn Kids |
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(4.9%) |
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0.1% |
PBteen |
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(8.1%) |
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(12.2%) |
Total |
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(0.9%) |
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0.8% |
* See the Company’s 10-K and 10-Q filings for the definition of
comparable brand revenue. |
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E-commerce net revenues in Q4 16 increased 2.2% to $809 million from $792 million in Q4 15. E-commerce net revenues
generated 51.1% of total company net revenues in Q4 16 and 49.9% of total company net revenues in Q4 15.
Retail net revenues in Q4 16 decreased 2.7% to $773 million from $794 million in Q4 15.
Operating margin in Q4 16 was 13.6% compared to 14.0% in Q4 15:
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Gross margin was 39.3% in Q4 16 versus 38.3% in Q4 15. |
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Selling, general and administrative (“SG&A”) expenses were $406 million, or 25.7%
of net revenues in Q4 16, versus $385 million, or 24.3% of net revenues in Q4 15. |
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The effective income tax rate in Q4 16 was 33.0% versus 36.6% in Q4 15, reflecting a one-time favorable tax adjustment.
Excluding this adjustment, the effective tax rate in Q4 16 was 36.5%. See Exhibit 1 for a reconciliation of GAAP to non-GAAP
effective income tax rate.
EPS in Q4 16 was $1.63 versus $1.55 in Q4 15. Excluding the tax adjustment, non-GAAP EPS was $1.55 in Q4 16. See Exhibit
1.
FISCAL YEAR 2016 RESULTS
Net revenues increased 2.2% to $5.084 billion in FY 16 from $4.976 billion in FY 15.
Comparable brand revenue in FY 16 increased 0.7% on top of 3.7% in FY 15 as shown in the table below:
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Fiscal Year Net Revenues and Comparable Brand Revenue Growth by Concept*
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Net Revenues (Millions) |
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Comparable Brand
Revenue Growth
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FY 16 |
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FY 15 |
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FY 16 |
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FY 15 |
Pottery Barn |
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$2,024 |
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$2,074 |
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(3.5%) |
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1.9% |
Williams Sonoma |
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1,002 |
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994 |
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1.3% |
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1.1% |
West Elm |
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972 |
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821 |
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12.8% |
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14.8% |
Pottery Barn Kids |
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635 |
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640 |
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(1.4%) |
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2.2% |
PBteen |
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238 |
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254 |
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(6.2%) |
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(2.7%) |
Other |
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213 |
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193 |
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N/A |
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N/A |
Total |
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$5,084 |
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$4,976 |
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0.7% |
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3.7% |
* See the Company’s 10-K and 10-Q filings for the definition of
comparable brand revenue. |
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E-commerce net revenues in FY 16 increased 4.4% to $2.634 billion from $2.523 billion in FY 15. E-commerce net revenues
generated 51.8% of total company net revenues in FY 16 and 50.7% of total company net revenues in FY 15.
Retail net revenues in FY 16 decreased 0.1% to $2.450 billion from $2.454 billion in FY 15.
Operating margin in FY 16 was 9.3% compared to 9.8% in FY 15. Excluding severance-related reorganization charges,
non-GAAP operating margin was 9.6% in FY 16:
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Gross margin was 37.0% in FY 16 versus 37.1% in FY 15. |
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Selling, general and administrative (“SG&A”) expenses were $1.411 billion, or
27.7% of net revenues in FY 16, versus $1.356 billion, or 27.2% of net revenues in FY 15. Excluding severance-related
reorganization charges of approximately $14 million, non-GAAP SG&A expenses were $1.396 billion, or 27.5% of net revenues,
in FY 16. See Exhibit 1. |
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The effective income tax rate in FY 16 was 35.3% versus 36.5% in FY 15, reflecting a one-time favorable tax adjustment.
Excluding this adjustment, the effective tax rate in FY 16 was 36.9%. See Exhibit 1.
EPS in FY 16 was $3.41 versus $3.37 in FY 15. Excluding severance-related reorganization charges and the tax adjustment,
non-GAAP EPS was $3.43 in FY 16. See Exhibit 1.
Merchandise inventories at the end of FY 16 were $978 million, down 0.1% compared to FY 15.
STOCK REPURCHASE PROGRAM AND DIVIDEND INCREASE
During FY 16, we repurchased 2.9 million shares of common stock at an average cost of $52.68 per share and a total cost of
approximately $151 million. As of January 29, 2017, there was approximately $411 million remaining under our current stock
repurchase program. As announced in a separate release today, our Board of Directors authorized a $0.02, or 5%, increase in our
quarterly cash dividend to $0.39 per share.
FISCAL YEAR 2017 FINANCIAL GUIDANCE
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1 st Quarter 2017 Financial Guidance
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Total Net Revenues (millions)
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$1,085 – $1,120
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Comparable Brand Revenue Growth/(Decrease)
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(1%) – 2%
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Diluted EPS
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$0.45 – $0.50
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Fiscal Year 2017 Financial Guidance
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Total Net Revenues (millions) |
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$5,165 – $5,265 |
Comparable Brand Revenue Growth |
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1% – 3% |
Operating Margin |
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9.4% – 9.6% |
Diluted EPS |
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$3.45 – $3.65 |
Income Tax Rate |
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36.5% – 37.5% |
Capital Spending (millions) |
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$200 – $220 |
Depreciation and Amortization (millions) |
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$185 – $195 |
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Store Opening and Closing Guidance by Retail Concept*
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FY 2016 ACT |
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FY 2017 GUID |
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Total |
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New |
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Close |
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End |
Williams Sonoma |
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234 |
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3 |
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(6) |
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231 |
Pottery Barn |
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201 |
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6 |
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(3) |
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204 |
West Elm |
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98 |
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10 |
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(3) |
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105 |
Pottery Barn Kids |
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89 |
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- |
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(4) |
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85 |
Rejuvenation |
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7 |
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2 |
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- |
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9 |
Total |
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629 |
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21 |
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(16) |
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634 |
* Included in the FY 16 store count are 19 stores in Australia and one store in the UK.
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CONFERENCE CALL AND WEBCAST INFORMATION
Williams-Sonoma, Inc. will host a live conference call today, March 15, 2017, at 2:00 P.M. (PT). The call, hosted by Laura
Alber, President and Chief Executive Officer, will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.
SEC REGULATION G — NON-GAAP INFORMATION
This press release includes non-GAAP SG&A, operating income, operating margin, income taxes, effective tax rate and diluted
EPS. These non-GAAP financial measures exclude the impact of severance-related reorganization charges in Q1 16 and Q3 16 and a
one-time favorable tax adjustment in Q4 16. We have reconciled these non-GAAP financial measures with the most directly comparable
GAAP financial measures in the text of this release and in Exhibit 1. We believe that these non-GAAP financial measures provide
meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation
of our quarterly and FY 16 actual results on a comparable basis with prior periods. Our management uses these non-GAAP financial
measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These
non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if
they do not fully materialize or are proven incorrect, could cause our results to differ materially from those expressed or implied
by such forward-looking statements. Such forward-looking statements include statements relating to: our ability to continue to
improve performance and increase our competitive advantage; our focus on operational excellence; our ability to improve customers’
experience; our optimism about the future; our ability to drive long-term profitable growth; our future financial guidance,
including Q1 17 and FY 2017 guidance; our stock repurchase program; and our proposed store openings and closures.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such
forward-looking statements include: accounting adjustments as we close our books for Q4 16 and as audited year-end financial
statements are prepared; continuing changes in general economic conditions, and the impact on consumer confidence and consumer
spending; new interpretations of or changes to current accounting rules; our ability to anticipate consumer preferences and buying
trends; dependence on timely introduction and customer acceptance of our merchandise; changes in consumer spending based on
weather, political, competitive and other conditions beyond our control; delays in store openings; competition from companies with
concepts or products similar to ours; timely and effective sourcing of merchandise from our foreign and domestic vendors and
delivery of merchandise through our supply chain to our stores and customers; effective inventory management; our ability to manage
customer returns; successful catalog management, including timing, sizing and merchandising; uncertainties in e-marketing,
infrastructure and regulation; multi-channel and multi-brand complexities; our ability to introduce new brands and brand
extensions; challenges associated with our increasing global presence; dependence on external funding sources for operating
capital; disruptions in the financial markets; our ability to control employment, occupancy and other operating costs; our ability
to improve our systems and processes; changes to our information technology infrastructure; general political, economic and market
conditions and events, including war, conflict or acts of terrorism; and other risks and uncertainties described more fully in our
public announcements, reports to stockholders and other documents filed with or furnished to the SEC, including our Annual Report
on Form 10-K for the fiscal year ended January 31, 2016 and all subsequent quarterly reports on Form 10-Q and current reports on
Form 8-K. All forward-looking statements in this press release are based on information available to us as of the date hereof, and
we assume no obligation to update these forward-looking statements.
ABOUT WILLIAMS-SONOMA, INC.
Williams-Sonoma, Inc. is a specialty retailer of high-quality products for the home. These products, representing eight distinct
merchandise strategies – Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams Sonoma Home, Rejuvenation,
and Mark and Graham – are marketed through e-commerce websites, direct mail catalogs and retail stores. Williams-Sonoma, Inc.
currently operates in the United States, Canada, Australia and the United Kingdom, offers international shipping to customers
worldwide, and has unaffiliated franchisees that operate stores in the Middle East and the Philippines and stores and e-commerce
websites in Mexico.
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Williams-Sonoma, Inc. |
Condensed Consolidated Statements of Earnings (unaudited) |
Thirteen weeks ended January 29, 2017 and January 31, 2016 |
(Dollars and shares in thousands, except per share amounts) |
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4 th Quarter
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2016 |
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2015 |
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$ |
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% of
Revenues
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$ |
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% of
Revenues
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E-commerce net revenues |
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$ |
808,942 |
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51.1 |
% |
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$ |
791,903 |
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49.9 |
% |
Retail net revenues |
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772,639 |
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48.9 |
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794,401 |
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50.1 |
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Net revenues |
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1,581,581 |
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100.0 |
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1,586,304 |
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100.0 |
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Cost of goods sold |
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959,550 |
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60.7 |
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978,744 |
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61.7 |
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Gross profit |
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622,031 |
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39.3 |
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607,560 |
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38.3 |
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Selling, general and administrative expenses |
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406,212 |
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25.7 |
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384,880 |
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24.3 |
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Operating income |
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215,819 |
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13.6 |
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222,680 |
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14.0 |
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Interest (income) expense, net |
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101 |
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- |
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2 |
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- |
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Earnings before income taxes |
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215,718 |
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13.6 |
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222,678 |
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14.0 |
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Income taxes |
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71,091 |
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4.5 |
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81,550 |
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5.1 |
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Net earnings |
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$ |
144,627 |
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9.1 |
% |
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$ |
141,128 |
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8.9 |
% |
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Earnings per share (EPS): |
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Basic |
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$1.65
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$1.57
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Diluted |
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$1.63
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$1.55
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Shares used in calculation of EPS: |
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Basic |
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87,669 |
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89,760 |
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Diluted |
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88,633 |
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90,988 |
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|
|
|
|
|
|
|
|
|
|
|
Williams-Sonoma, Inc. |
Condensed Consolidated Statements of Earnings (unaudited) |
Fifty-two weeks ended January 29, 2017 and January 31, 2016 |
(Dollars and shares in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
2015 |
|
|
|
|
|
|
$ |
|
|
|
|
|
% of
Revenues
|
|
|
|
|
|
$ |
|
|
|
|
|
% of
Revenues
|
E-commerce net revenues |
|
|
|
|
|
$ |
2,633,602 |
|
|
|
|
|
51.8 |
% |
|
|
|
|
|
$ |
2,522,580 |
|
|
|
|
|
50.7 |
% |
Retail net revenues |
|
|
|
|
|
|
2,450,210 |
|
|
|
|
|
48.2 |
|
|
|
|
|
|
|
2,453,510 |
|
|
|
|
|
49.3 |
|
Net revenues |
|
|
|
|
|
|
5,083,812 |
|
|
|
|
|
100.0 |
|
|
|
|
|
|
|
4,976,090 |
|
|
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
|
|
|
|
3,200,502 |
|
|
|
|
|
63.0 |
|
|
|
|
|
|
|
3,131,876 |
|
|
|
|
|
62.9 |
|
Gross profit |
|
|
|
|
|
|
1,883,310 |
|
|
|
|
|
37.0 |
|
|
|
|
|
|
|
1,844,214 |
|
|
|
|
|
37.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
|
|
|
|
|
1,410,711 |
|
|
|
|
|
27.7 |
|
|
|
|
|
|
|
1,355,580 |
|
|
|
|
|
27.2 |
|
Operating income |
|
|
|
|
|
|
472,599 |
|
|
|
|
|
9.3 |
|
|
|
|
|
|
|
488,634 |
|
|
|
|
|
9.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (income) expense, net |
|
|
|
|
|
|
688 |
|
|
|
|
|
- |
|
|
|
|
|
|
|
627 |
|
|
|
|
|
- |
|
Earnings before income taxes |
|
|
|
|
|
|
471,911 |
|
|
|
|
|
9.3 |
|
|
|
|
|
|
|
488,007 |
|
|
|
|
|
9.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
|
|
|
|
166,524 |
|
|
|
|
|
3.3 |
|
|
|
|
|
|
|
177,939 |
|
|
|
|
|
3.6 |
|
Net earnings |
|
|
|
|
|
$ |
305,387 |
|
|
|
|
|
6.0 |
% |
|
|
|
|
|
$ |
310,068 |
|
|
|
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (EPS): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
$3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
$3.42
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
$3.41
|
|
|
|
|
|
|
|
|
|
|
|
|
$3.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in calculation of EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
88,594 |
|
|
|
|
|
|
|
|
|
|
|
|
90,787 |
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
89,462 |
|
|
|
|
|
|
|
|
|
|
|
|
92,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Williams-Sonoma, Inc. |
Condensed Consolidated Balance Sheets (unaudited) |
(Dollars and shares in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan. 29, 2017 |
|
|
|
|
|
Jan. 31, 2016 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
$ |
213,713 |
|
|
|
|
|
|
$ |
193,647 |
|
Accounts receivable, net |
|
|
|
|
|
|
88,803 |
|
|
|
|
|
|
|
79,304 |
|
Merchandise inventories, net |
|
|
|
|
|
|
977,505 |
|
|
|
|
|
|
|
978,138 |
|
Prepaid catalog expenses |
|
|
|
|
|
|
23,625 |
|
|
|
|
|
|
|
28,919 |
|
Prepaid expenses |
|
|
|
|
|
|
52,882 |
|
|
|
|
|
|
|
44,654 |
|
Other assets |
|
|
|
|
|
|
10,652 |
|
|
|
|
|
|
|
11,438 |
|
Total current assets |
|
|
|
|
|
|
1,367,180 |
|
|
|
|
|
|
|
1,336,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
|
|
|
|
923,283 |
|
|
|
|
|
|
|
886,813 |
|
Deferred income taxes, net |
|
|
|
|
|
|
135,238 |
|
|
|
|
|
|
|
141,784 |
|
Other assets, net |
|
|
|
|
|
|
51,178 |
|
|
|
|
|
|
|
52,730 |
|
Total assets |
|
|
|
|
|
$ |
2,476,879 |
|
|
|
|
|
|
$ |
2,417,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
|
$ |
453,710 |
|
|
|
|
|
|
$ |
447,412 |
|
Accrued salaries, benefits and other |
|
|
|
|
|
|
130,187 |
|
|
|
|
|
|
|
127,122 |
|
Customer deposits |
|
|
|
|
|
|
294,276 |
|
|
|
|
|
|
|
296,827 |
|
Income taxes payable |
|
|
|
|
|
|
23,245 |
|
|
|
|
|
|
|
67,052 |
|
Other liabilities |
|
|
|
|
|
|
59,838 |
|
|
|
|
|
|
|
58,014 |
|
Total current liabilities |
|
|
|
|
|
|
961,256 |
|
|
|
|
|
|
|
996,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred rent and lease incentives |
|
|
|
|
|
|
196,188 |
|
|
|
|
|
|
|
173,061 |
|
Other long-term obligations |
|
|
|
|
|
|
71,215 |
|
|
|
|
|
|
|
49,713 |
|
Total liabilities |
|
|
|
|
|
|
1,228,659 |
|
|
|
|
|
|
|
1,219,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock: $.01 par value; 7,500 shares authorized;
none issued
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
Common stock: $.01 par value; 253,125 shares authorized;
87,325 and 89,563 shares issued and outstanding
at January 29, 2017 and January 31, 2016, respectively
|
|
|
|
|
|
|
873 |
|
|
|
|
|
|
|
896 |
|
Additional paid-in capital |
|
|
|
|
|
|
556,928 |
|
|
|
|
|
|
|
541,307 |
|
Retained earnings |
|
|
|
|
|
|
701,702 |
|
|
|
|
|
|
|
668,545 |
|
Accumulated other comprehensive loss |
|
|
|
|
|
|
(9,903 |
) |
|
|
|
|
|
|
(10,616 |
) |
Treasury stock, at cost |
|
|
|
|
|
|
(1,380 |
) |
|
|
|
|
|
|
(1,906 |
) |
Total stockholders’ equity |
|
|
|
|
|
|
1,248,220 |
|
|
|
|
|
|
|
1,198,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
|
|
|
|
$ |
2,476,879 |
|
|
|
|
|
|
$ |
2,417,427 |
|
|
Williams-Sonoma, Inc. |
Condensed Consolidated Statements of Cash Flows (unaudited) |
Fifty-two weeks ended January 29, 2017 and January 31, 2016 |
(Dollars in thousands) |
|
|
|
|
|
|
|
Year-to-Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
2015 |
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
|
|
|
$ |
305,387 |
|
|
|
|
|
|
$ |
310,068 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net earnings to net cash |
|
|
|
|
|
|
|
|
|
|
|
|
provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
173,195 |
|
|
|
|
|
|
|
167,760 |
|
Loss on disposal/impairment of assets |
|
|
|
|
|
|
3,806 |
|
|
|
|
|
|
|
4,339 |
|
Amortization of deferred lease incentives |
|
|
|
|
|
|
(25,212 |
) |
|
|
|
|
|
|
(24,721 |
) |
Deferred income taxes |
|
|
|
|
|
|
7,114 |
|
|
|
|
|
|
|
(7,436 |
) |
Tax benefit related to stock-based awards |
|
|
|
|
|
|
3,230 |
|
|
|
|
|
|
|
14,592 |
|
Excess tax benefit related to stock-based awards |
|
|
|
|
|
|
(4,894 |
) |
|
|
|
|
|
|
(14,494 |
) |
Stock-based compensation expense |
|
|
|
|
|
|
51,116 |
|
|
|
|
|
|
|
41,357 |
|
Other |
|
|
|
|
|
|
(423 |
) |
|
|
|
|
|
|
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
|
(9,794 |
) |
|
|
|
|
|
|
(12,849 |
) |
Merchandise inventories |
|
|
|
|
|
|
4,493 |
|
|
|
|
|
|
|
(92,647 |
) |
Prepaid catalog expenses |
|
|
|
|
|
|
5,294 |
|
|
|
|
|
|
|
5,022 |
|
Prepaid expenses and other assets |
|
|
|
|
|
|
(6,367 |
) |
|
|
|
|
|
|
(9,245 |
) |
Accounts payable |
|
|
|
|
|
|
3,169 |
|
|
|
|
|
|
|
60,507 |
|
Accrued salaries, benefits and other liabilities |
|
|
|
|
|
|
25,876 |
|
|
|
|
|
|
|
(135 |
) |
Customer deposits |
|
|
|
|
|
|
(3,037 |
) |
|
|
|
|
|
|
35,877 |
|
Deferred rent and lease incentives |
|
|
|
|
|
|
35,559 |
|
|
|
|
|
|
|
31,334 |
|
Income taxes payable |
|
|
|
|
|
|
(43,803 |
) |
|
|
|
|
|
|
34,548 |
|
Net cash provided by operating activities |
|
|
|
|
|
|
524,709 |
|
|
|
|
|
|
|
544,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
|
|
|
|
(197,414 |
) |
|
|
|
|
|
|
(202,935 |
) |
Other |
|
|
|
|
|
|
439 |
|
|
|
|
|
|
|
769 |
|
Net cash used in investing activities |
|
|
|
|
|
|
(196,975 |
) |
|
|
|
|
|
|
(202,166 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of common stock |
|
|
|
|
|
|
(151,272 |
) |
|
|
|
|
|
|
(224,995 |
) |
Payment of dividends |
|
|
|
|
|
|
(133,539 |
) |
|
|
|
|
|
|
(127,636 |
) |
Borrowings under revolving line of credit |
|
|
|
|
|
|
125,000 |
|
|
|
|
|
|
|
200,000 |
|
Repayments of borrowings under revolving line of credit |
|
|
|
|
|
|
(125,000 |
) |
|
|
|
|
|
|
(200,000 |
) |
Tax withholdings related to stock-based awards |
|
|
|
|
|
|
(27,062 |
) |
|
|
|
|
|
|
(31,790 |
) |
Excess tax benefit related to stock-based awards |
|
|
|
|
|
|
4,894 |
|
|
|
|
|
|
|
14,494 |
|
Proceeds related to stock-based awards |
|
|
|
|
|
|
1,532 |
|
|
|
|
|
|
|
2,647 |
|
Repayment of long-term obligations |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
(1,968 |
) |
Other |
|
|
|
|
|
|
(359 |
) |
|
|
|
|
|
|
(135 |
) |
Net cash used in financing activities |
|
|
|
|
|
|
(305,806 |
) |
|
|
|
|
|
|
(369,383 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents |
|
|
|
|
|
|
(1,862 |
) |
|
|
|
|
|
|
(1,757 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
|
|
|
|
20,066 |
|
|
|
|
|
|
|
(29,280 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
193,647 |
|
|
|
|
|
|
|
222,927 |
|
Cash and cash equivalents at end of period |
|
|
|
|
|
$ |
213,713 |
|
|
|
|
|
|
$ |
193,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 1 |
Reconciliation of 4 th Quarter and Fiscal Year Actual GAAP to
Non-GAAP Operating Margin By Segment*
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
|
|
Retail |
|
|
Unallocated
|
|
|
Total |
|
|
|
Q4 16 |
|
|
Q4 15 |
|
|
Q4 16 |
|
|
Q4 15
|
|
|
Q4 16
|
|
|
Q4 15 |
|
|
Q4 16 |
|
|
Q4 15 |
Net Revenues |
|
|
$ |
808,942 |
|
|
|
$ |
791,903 |
|
|
|
$ |
772,639 |
|
|
|
$
|
794,401
|
|
|
|
$
|
-
|
|
|
|
$ |
- |
|
|
|
$ |
1,581,581 |
|
|
|
$ |
1,586,304 |
|
Operating Income/(Expense) |
|
|
|
191,845 |
|
|
|
|
174,218 |
|
|
|
|
121,507 |
|
|
|
|
121,446
|
|
|
|
|
(97,533
|
)
|
|
|
|
(72,984 |
) |
|
|
|
215,819 |
|
|
|
|
222,680 |
|
Operating Margin |
|
|
|
23.7 |
% |
|
|
|
22.0 |
% |
|
|
|
15.7 |
% |
|
|
|
15.3
|
%
|
|
|
|
(6.2
|
%)
|
|
|
|
(4.6 |
%) |
|
|
|
13.6 |
% |
|
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E-commerce |
|
|
Retail |
|
|
Unallocated |
|
|
Total |
|
|
|
FY 16 |
|
|
FY 15 |
|
|
FY 16 |
|
|
FY 15 |
|
|
FY 16 |
|
|
FY 15 |
|
|
FY 16 |
|
|
FY 15 |
Net Revenues |
|
|
$ |
2,633,602 |
|
|
|
$ |
2,522,580 |
|
|
|
$ |
2,450,210 |
|
|
|
$ |
2,453,510 |
|
|
|
$ |
- |
|
|
|
$ |
- |
|
|
|
$ |
5,083,812 |
|
|
|
$ |
4,976,090 |
|
GAAP Operating Income/(Expense) |
|
|
|
606,286 |
|
|
|
|
562,081 |
|
|
|
|
231,929 |
|
|
|
|
239,288 |
|
|
|
|
(365,616 |
) |
|
|
|
(312,735 |
) |
|
|
|
472,599 |
|
|
|
|
488,634 |
|
GAAP Operating Margin |
|
|
|
23.0 |
% |
|
|
|
22.3 |
% |
|
|
|
9.5 |
% |
|
|
|
9.8 |
% |
|
|
|
(7.2 |
%) |
|
|
|
(6.3 |
%) |
|
|
|
9.3 |
% |
|
|
|
9.8 |
% |
Severance-related Reorganization
Charges(1)
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
14,406 |
|
|
|
|
- |
|
|
|
|
14,406 |
|
|
|
|
- |
|
Non-GAAP Operating Income/
(Expense) Excluding Severance-
related Reorganization Charges(3)
|
|
|
$ |
606,286 |
|
|
|
$ |
562,081 |
|
|
|
$ |
231,929 |
|
|
|
$ |
239,288 |
|
|
|
$ |
(351,210 |
) |
|
|
$ |
(312,735 |
) |
|
|
$ |
487,005 |
|
|
|
$ |
488,634 |
|
Non-GAAP Operating Margin (3) |
|
|
|
23.0 |
% |
|
|
|
22.3 |
% |
|
|
|
9.5 |
% |
|
|
|
9.8 |
% |
|
|
|
(6.9 |
%) |
|
|
|
(6.3 |
%) |
|
|
|
9.6 |
% |
|
|
|
9.8 |
% |
* See the Company’s 10-K and 10-Q filings for additional information on segment reporting
and the definition of Operating Income/(Expense) and Operating Margin.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of 4 th Quarter and Fiscal Year Actual GAAP to
Non-GAAP Effective Tax Rate
|
($ in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 16 |
|
|
Q4 15 |
|
|
FY 16 |
|
|
FY 15 |
Earnings Before Income Taxes |
|
|
|
|
|
$ |
215,718 |
|
|
|
$ |
222,678 |
|
|
|
$ |
471,911 |
|
|
|
$ |
|
488,007 |
|
GAAP Income Taxes |
|
|
|
|
|
|
71,091 |
|
|
|
|
81,550 |
|
|
|
|
166,524 |
|
|
|
|
|
177,939 |
|
GAAP Effective Tax Rate |
|
|
|
|
|
|
33.0 |
% |
|
|
|
36.6 |
% |
|
|
|
35.3 |
% |
|
|
|
|
36.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-time Favorable Tax Adjustment(2) |
|
|
|
|
|
|
7,681 |
|
|
|
|
- |
|
|
|
|
7,681 |
|
|
|
|
|
- |
|
Non-GAAP Income Taxes Excluding Tax Adjustment(3) |
|
|
|
|
|
$ |
78,772 |
|
|
|
$ |
81,550 |
|
|
|
$ |
174,205 |
|
|
|
$ |
|
177,939 |
|
Non-GAAP Effective Tax Rate (3) |
|
|
|
|
|
|
36.5 |
% |
|
|
|
36.6 |
% |
|
|
|
36.9 |
% |
|
|
|
|
36.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Quarterly and Fiscal Year GAAP to Non-GAAP |
Diluted Earnings Per Share** |
(Totals rounded to the nearest cent per diluted share) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 16
ACT
|
|
|
|
|
Q2 16
ACT
|
|
|
|
|
Q3 16
ACT
|
|
|
|
|
Q4 16
ACT
|
|
|
|
|
FY 16
ACT
|
2016 GAAP Diluted EPS |
|
|
|
|
$0.44 |
|
|
|
|
$0.58 |
|
|
|
|
$0.78 |
|
|
|
|
$1.63 |
|
|
|
|
$3.41 |
Impact of Severance-related Reorganization Charges(1) |
|
|
|
|
$0.09 |
|
|
|
|
- |
|
|
|
|
$0.01 |
|
|
|
|
- |
|
|
|
|
$0.10 |
One-time Favorable Tax Adjustment(2) |
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
($0.08) |
|
|
|
|
($0.08) |
2016 Non-GAAP Diluted EPS Excluding Severance-
related Reorganization Charges and Tax
Adjustment (3)
|
|
|
|
|
$0.53 |
|
|
|
|
$0.58 |
|
|
|
|
$0.79 |
|
|
|
|
$1.55 |
|
|
|
|
$3.43 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 15
ACT
|
|
|
|
|
Q2 15
ACT
|
|
|
|
|
Q3 15
ACT
|
|
|
|
|
Q4 15
ACT
|
|
|
|
|
FY 15
ACT
|
2015 GAAP Diluted EPS |
|
|
|
|
$0.48 |
|
|
|
|
$0.58 |
|
|
|
|
$0.77 |
|
|
|
|
$1.55 |
|
|
|
|
$3.37 |
** Due to the differences between the quarterly and year-to-date weighted average share count calculations and rounding to the
nearest cent per diluted share, totals may not equal the sum of the line items and fiscal year diluted EPS may not equal the sum of
the quarters.
Notes:
|
(1)
|
|
Impact of Severance-related Reorganization Charges – During Q1 16 and Q3 16, we incurred
severance-related reorganization charges due to headcount reduction primarily in our corporate functions totaling
approximately $14 million, or $0.10 per diluted share. These charges were recorded as SG&A expense within the unallocated
segment.
|
(2)
|
|
Impact of One-time Favorable Tax Adjustment – During Q4 16 we incurred a benefit of approximately
$8M, or $0.08 per diluted share, related to tax adjustments associated with intercompany transactions.
|
(3)
|
|
SEC Regulation G – Non-GAAP Information – These tables include non-GAAP operating income, operating
margin, income taxes, effective tax rate and diluted EPS. We believe that these non-GAAP financial measures provide
meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful
evaluation of our quarterly and FY 16 actual results on a comparable basis with prior periods. Our management uses these
non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from
quarter to quarter. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for,
or superior to, financial measures calculated in accordance with GAAP.
|
|
|
|
|
|
|
Store Statistics
|
Store Count
|
|
|
|
Avg. Leased Square Footage
Per Store
|
|
|
|
|
|
Oct. 30, 2016 |
|
|
Openings |
|
|
Closings |
|
|
Jan. 29, 2017 |
|
|
Jan. 31, 2016 |
|
|
|
Jan. 29, 2017 |
|
|
|
|
Jan. 31, 2016 |
Williams Sonoma |
|
|
|
|
241 |
|
|
2 |
|
|
(9) |
|
|
234 |
|
|
239 |
|
|
|
6,600 |
|
|
|
|
6,600 |
Pottery Barn |
|
|
|
|
202 |
|
|
1 |
|
|
(2) |
|
|
201 |
|
|
197 |
|
|
|
13,900 |
|
|
|
|
13,800 |
Pottery Barn Kids |
|
|
|
|
89 |
|
|
1 |
|
|
(1) |
|
|
89 |
|
|
89 |
|
|
|
7,400 |
|
|
|
|
7,500 |
West Elm |
|
|
|
|
97 |
|
|
1 |
|
|
- |
|
|
98 |
|
|
87 |
|
|
|
13,300 |
|
|
|
|
13,200 |
Rejuvenation |
|
|
|
|
6 |
|
|
1 |
|
|
- |
|
|
7 |
|
|
6 |
|
|
|
9,100 |
|
|
|
|
9,000 |
Total |
|
|
|
|
635 |
|
|
6 |
|
|
(12) |
|
|
629 |
|
|
618 |
|
|
|
10,100 |
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oct. 30, 2016 |
|
|
|
|
|
|
|
|
Jan. 29, 2017 |
|
|
|
|
|
|
|
|
Jan. 31, 2016 |
|
|
|
|
|
|
|
|
Total store selling square footage |
|
|
|
|
|
|
|
|
3,966,000 |
|
|
|
|
|
|
|
|
3,951,000 |
|
|
|
|
|
|
|
|
3,827,000 |
|
|
|
|
|
|
|
|
Total store leased square footage |
|
|
|
|
|
|
|
|
6,381,000 |
|
|
|
|
|
|
|
|
6,359,000 |
|
|
|
|
|
|
|
|
6,163,000 |
|
|
|
|
|
|
|
|
WILLIAMS-SONOMA, INC.
Julie P. Whalen
EVP, Chief Financial Officer
(415) 616-8524
-or-
Beth Potillo-Miller
SVP, Finance & Corporate Treasurer
Investor Relations
(415) 616-8643
View source version on businesswire.com: http://www.businesswire.com/news/home/20170315006414/en/