01—Abstract
Summary
Summary of the 10-K filed April 29, 2002. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported fiscal 2001 (53 weeks ended February 3, 2002) net revenues of $2.09 billiona, up from $1.83 billion in fiscal 2000, with net earnings of $75.1 million, or $1.30 per diluted share, compared with $56.8 million, or $.99 per diluted share, the prior year.
Retail sales were $1.23 billionb and direct-to-customer sales were $735.8 million. The company operated 415 stores at year-end, up from 382, and planned a net increase of about 56 stores in fiscal 2002, along with a test of a new West Elm catalog and capital expenditures projected at $150 million to $160 million. Balance sheet strength improved over the year.
Cash and cash equivalents rose to $75.4 millionc from $19.7 million, merchandise inventories fell to $249.2 million from $283.1 million, and shareholders' equity grew to $532.5 million from $427.5 million. Operating cash flow was $205.0 million. The company had no borrowings outstanding under its $200 million line of credit.
Comparable store sales grew 1.7%d, slowing from 5.5% in fiscal 2000, and the company has never paid a cash dividend. On April 15, 2002, the Board declared a two-for-one stock split, to be distributed May 9, 2002 to shareholders of record on April 29, 2002. Management also expects the Canadian store expansion and planned system replacements over several years to carry execution risks, and the filing notes that the company is pursuing potential acquisition of two Memphis distribution facilities leased from related partnerships.
02—Key points
Key Highlights
- Net revenues rose to $2,086,662 thousand in fiscal 2001 from $1,829,483 thousand in fiscal 2000, an increase of 14.1%.
- Net earnings were $75,096 thousand, or $1.30 per diluted share, versus $56,782 thousand, or $.99 per diluted share, in fiscal 2000.
- Retail revenues increased 18.3% to $1,236,811 thousand, while direct-to-customer revenues increased 8.4% to $849,851 thousand.
- Store count increased to 415 at February 3, 2002 from 382, with 57 stores opened and 24 closed in fiscal 2001; the company plans a net increase of about 56 stores in fiscal 2002.
- Comparable store sales increased 1.7%, compared with 5.5% in fiscal 2000.
- Cash and cash equivalents increased to $75,374 thousand, and the company had no borrowings under its line of credit at year-end.
- A two-for-one stock split was declared April 15, 2002, with distribution on May 9, 2002; the company has never paid a cash dividend.
03—Questions
Frequently Asked Questions
How did Williams-Sonoma perform financially in fiscal 2001?
Net revenues grew 14.1% to $2,086,662 thousand, and net earnings rose to $75,096 thousand, or $1.30 per diluted share, from $56,782 thousand, or $.99 per diluted share, in fiscal 2000. Gross margin was 38.1% of net revenues, compared with 37.9% the prior year.
What is driving growth in the business?
The filing attributes revenue growth primarily to new stores and the growth of the Williams-Sonoma, Pottery Barn and Pottery Barn Kids brands. Pottery Barn and Pottery Barn Kids accounted for 62.7% of the growth in retail revenues, and Internet sales rose to $132,800 thousand from $57,026 thousand.
What are the company's expansion plans for fiscal 2002?
The company plans a net increase of about 56 retail stores, including 25 Pottery Barn Kids stores, 18 Williams-Sonoma stores, 14 Pottery Barn stores and two Outlet stores, offset by a reduction of three Hold Everything stores. Gross capital expenditures are projected at $150,000 thousand to $160,000 thousand, and the company plans to test a new West Elm catalog.
Does the company pay dividends, and what corporate actions were announced?
The company has never declared or paid a cash dividend, and its bank line of credit prohibits such payments. On April 15, 2002, the Board declared a two-for-one stock split, with distribution on May 9, 2002 to shareholders of record on April 29, 2002.
What risks does the filing highlight?
The filing highlights risks including anticipating changing consumer preferences, opening new stores, intense competition, dependence on foreign vendors (with approximately 55% of fiscal 2001 merchandise payments going to foreign vendors), catalog costs such as postal and paper rates, and possible supply chain disruptions from planned system changes over several years.
04—Continue