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Williams-Sonoma Annual Report, Year Ended Feb 2, 1997

Filing Date
Filed May 1, 1997
Period End
February 2, 1997
Security
WSM
In the record · 2016–202610-K1110-Q328-K84

WSM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 84 current reports (8-K) between 2016 and 2026.

  1. FY2017 annual report10-K · Mar ’17Mar ’17
  2. Leadership change8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Aug ’21Aug ’21
  4. Material agreement8-K · Jun ’25Jun ’25

01—Abstract

Summary

Summary of the 10-K filed May 1, 1997. Cited figures are marked; the original filing is the authoritative source.

Williams-Sonoma, Inc. reported fiscal 1996 (the 53 weeks ended February 2, 1997) with net sales of $811.8 milliona, up $167,105,000 (26%) from $644.7 million, and net earnings of $22.7 million, or $.86 fully diluted per share, compared with $2.5 million in fiscal 1995.

Retail sales were $513.6 millionb (63.3% of net sales) and catalog sales were $298.2 million (36.7%). The company operated 256 stores in 36 states and the District of Columbia at year-end, opened 30 and closed 14 stores during the year, and reported comparable store sales growth of 4.6%. Gross margin improved as cost of goods sold and occupancy fell to 60.8% of net sales from 63.7%, and SG&A fell to 33.8% from 35.0%.

Balance sheet and liquidity strengthened over the year. Cash and cash equivalents rose to $78.8 millionc from $4.2 million, and net cash provided by operating activities was $112.2 million, versus $2.4 million in fiscal 1995. Total assets grew to $404.4 million and shareholders' equity to $146.0 million.

During the year the company issued $40 milliond of 5.25% convertible subordinated notes due 2003, convertible at $26.10 per share, and used the proceeds mainly to reduce bank borrowings. The company plans approximately $64.5 million of gross capital expenditures in fiscal 1997, including about $10 million for information systems, and expects to open 39 new large-format stores while closing 14 smaller ones. The company has never paid a cash dividend, and its bank credit agreement, which expires May 1, 1997, is being replaced by a signed commitment for a 360-day facility.

The filing states there are no material pending legal proceedings. Stock traded on the NASDAQ National Market System, with a closing price of $30.75 on March 27, 1997, and approximately 537 shareholders of record. Approximately 38% of merchandise is foreign-sourced, and no single supplier accounted for more than 4% of purchases.

02—Key points

Key Highlights

  1. Net sales rose to $811,758 thousand in fiscal 1996 from $644,653 thousand, an increase of $167,105,000 (26%).
  2. Net earnings were $22,742 thousand, or $.86 fully diluted per share, compared with $2,536 thousand, or $.10, in fiscal 1995.
  3. Retail sales reached $513,592 thousand (63.3% of net sales), with comparable store sales growth of 4.6%; the company operated 256 stores at year-end.
  4. Catalog sales were $298,166 thousand (36.7% of net sales), with catalog sales growth of 19.1%, and 136,489 thousand catalogs mailed.
  5. Cost of goods sold and occupancy fell to 60.8% of net sales from 63.7%, and SG&A fell to 33.8% from 35.0%.
  6. Net cash provided by operating activities increased to $112,238 thousand from $2,353 thousand, and cash rose to $78,802 thousand.
  7. Issued $40,000,000 of 5.25% convertible subordinated notes due 2003 (conversion price $26.10) and planned fiscal 1997 gross capital expenditures of about $64,500,000.

03—Questions

Frequently Asked Questions

  1. How did Williams-Sonoma perform financially in fiscal 1996?

    Net sales grew 26% to $811.8 million and net earnings rose to $22.7 million, or $.86 fully diluted per share, from $2.5 million, or $.10, in fiscal 1995. The fiscal 1996 year included 53 weeks.

  2. What drove the sales growth?

    Retail sales increased 30% to $513.6 million, primarily from new store openings. The company opened 30 stores and closed 14 during the year. Catalog sales rose 19% to $298.2 million, and comparable store sales grew 4.6%.

  3. Did the company improve its margins?

    Yes. Cost of goods sold and occupancy expenses declined to 60.8% of net sales from 63.7%, mainly because merchandise margins improved after fourth-quarter markdowns in fiscal 1995. SG&A declined to 33.8% of net sales from 35.0%, largely due to lower advertising expense rates.

  4. Does the company pay dividends, and how is its debt structured?

    The company has never declared or paid a cash dividend, and its bank credit agreement prohibits dividend payments. Long-term debt totaled $89.3 million at year-end, including $40 million of 7.2% senior notes due 2005 and $40 million of 5.25% convertible notes due 2003. The bank credit agreement expires May 1, 1997, and the company has a signed commitment for a replacement 360-day facility of $60 million in cash advances and $35 million for letters of credit.

  5. What are the company's plans for fiscal 1997?

    The company plans approximately $64.5 million of gross capital expenditures, including about $10 million for information systems. It plans to open 39 new large-format stores (20 Pottery Barn and 19 Williams-Sonoma) and close 14 smaller stores.

04—Continue

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