How did Williams-Sonoma's sales and earnings perform in Fiscal 1994?

Net sales increased 28.9% to $528.5 million, and net earnings rose to $19.6 million, or $.75 per share, compared with $11.2 million, or $.44 per share, in Fiscal 1993. Catalog sales drove much of the growth, rising 55.0% to $215.5 million.

What drove margin improvement during the year?

Cost of goods sold and occupancy fell to 59.9% of sales from 62.3% in Fiscal 1993. The filing attributes this mainly to sales growing at double the rate of occupancy costs, together with the higher-margin catalog business outpacing retail.

Does Williams-Sonoma pay dividends?

No. The company has never declared or paid a cash dividend on its common stock. Its policy is to retain earnings to finance growth, and its credit agreement and Memphis distribution center sublease prohibit cash dividends.

What are the company's plans for Fiscal 1995?

The company plans 50 new or expanded large-format stores, including 33 Williams-Sonoma and 17 Pottery Barn stores. It expects to mail fewer catalogs than in Fiscal 1994 because of higher postal rates and paper costs.

How is the company financed and how liquid is it?

At January 29, 1995, cash was $17.5 million and working capital was $49.5 million. The company had no borrowings under its $45 million available revolving line of credit, which expires July 1, 1996. It also took on a $7 million mortgage on its headquarters building, bearing a fixed 7.8% rate.

WSM 10-K FY1995 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed April 28, 1995. Cited figures are marked; the original filing is the authoritative source.

Williams-Sonoma, Inc. reported net sales of $528.5 million^a for the fiscal year ended January 29, 1995 (Fiscal 1994), up 28.9% from $410.1 million in Fiscal 1993.

Net earnings rose to $19.6 million^b, or $.75 per share (primary and fully diluted), compared with $11.2 million, or $.44 per share, a year earlier. Catalog sales grew 55.0% to $215.5 million, while retail sales increased 17.9% to $307.3 million, with comparable store sales up 16.5%. The company operated 214 retail stores in 26 states and the District of Columbia, plus five mail order catalogs, and sold its California Closet Company subsidiary in August 1994.

Profitability improved as cost of goods sold and occupancy fell to 59.9% of sales from 62.3% in Fiscal 1993, though selling, general and administrative expense rose to 33.5% of sales. Total assets grew to $217.9 million and shareholders' equity to $118.2 million^c. Cash rose to $17.5 million, and inventories increased to $87.9 million.

Cash flow from operations was $20.1 million^d, down from $27.5 million, reflecting higher inventory and prepaid catalog costs. Capital expenditures were $30.1 million, and the company took on a $7 million mortgage on its new headquarters building. The company has never paid a cash dividend and intends to retain earnings to finance growth.

Its line of credit provides $45 million of available credit and expires July 1, 1996. Management plans 50 new or expanded large-format stores in Fiscal 1995 and expects to mail fewer catalogs due to higher postal rates and paper costs. The company's common stock trades on the NASDAQ National Market System under the symbol WSGC, with a closing price of $19.125 on April 20, 1995.

02—Key points

Key Highlights

Net sales rose 28.9% to $528.5 million in Fiscal 1994, with catalog sales up 55.0% and retail sales up 17.9%.
Net earnings increased to $19.6 million, or $.75 per share, from $11.2 million, or $.44 per share, in Fiscal 1993.
Comparable store sales grew 16.5%, and the company opened 11 new stores, ending the year with 214 stores.
Cost of goods sold and occupancy improved to 59.9% of sales from 62.3%, while SG&A rose to 33.5% of sales.
Total assets reached $217.9 million and shareholders' equity reached $118.2 million at year-end.
The company sold California Closet Company in August 1994, which accounted for 2% of Fiscal 1993 sales.
Management plans 50 new or expanded large-format stores in Fiscal 1995 and has never paid a cash dividend.

03—Questions

Frequently Asked Questions

How did Williams-Sonoma's sales and earnings perform in Fiscal 1994?
Net sales increased 28.9% to $528.5 million, and net earnings rose to $19.6 million, or $.75 per share, compared with $11.2 million, or $.44 per share, in Fiscal 1993. Catalog sales drove much of the growth, rising 55.0% to $215.5 million.
What drove margin improvement during the year?
Cost of goods sold and occupancy fell to 59.9% of sales from 62.3% in Fiscal 1993. The filing attributes this mainly to sales growing at double the rate of occupancy costs, together with the higher-margin catalog business outpacing retail.
Does Williams-Sonoma pay dividends?
No. The company has never declared or paid a cash dividend on its common stock. Its policy is to retain earnings to finance growth, and its credit agreement and Memphis distribution center sublease prohibit cash dividends.
What are the company's plans for Fiscal 1995?
The company plans 50 new or expanded large-format stores, including 33 Williams-Sonoma and 17 Pottery Barn stores. It expects to mail fewer catalogs than in Fiscal 1994 because of higher postal rates and paper costs.
How is the company financed and how liquid is it?
At January 29, 1995, cash was $17.5 million and working capital was $49.5 million. The company had no borrowings under its $45 million available revolving line of credit, which expires July 1, 1996. It also took on a $7 million mortgage on its headquarters building, bearing a fixed 7.8% rate.

04—Continue

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