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Williams-Sonoma Annual Report, Year Ended Feb 2, 2003

Filing Date
Filed April 15, 2003
Period End
February 2, 2003
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 April 15, 2003. Cited figures are marked; the original filing is the authoritative source.

Williams-Sonoma, Inc. reported net revenues of $2.36 billiona for fiscal 2002 (52 weeks ended February 2, 2003), up 13.1% from $2.09 billion in fiscal 2001.

Net earnings rose to $124.4 millionb, or $1.04 per diluted share, from $75.1 million, or $0.65 per diluted share, a year earlier. Gross margin improved to 40.3% of net revenues from 38.1%, and operating margin to 8.6% from 6.1%. Retail accounted for 60.3% of net revenues and direct-to-customer for 39.7%, with comparable store sales up 2.7%.

The company ended the year with 478 retail stores, up from 415, and plans to increase retail leased square footage by approximately 9% to 11% in fiscal 2003, a net increase of about 34 stores. Cash and cash equivalents rose to $193.5 millionc, cash from operations was $310.2 million, and the company had no borrowings under its $200 million line of credit. Total debt was $25.5 million, and shareholders' equity reached $644.0 million.

The company repurchased 2 million shares for about $48.4 milliond in the fourth quarter and authorized a program for up to 4 million shares. It has never paid a cash dividend and does not intend to do so. The filing flags risks including consumer spending sensitivity, the ability to open new stores profitably, reliance on foreign vendors (about 58% of merchandise purchases were foreign sourced), and a planned consolidation of two related-party Memphis distribution partnerships under FIN No. 46 beginning August 4, 2003, expected to add about $16 million in assets and $18 million in liabilities.

02—Key points

Key Highlights

  1. Net revenues of $2.36 billion, up 13.1% from $2.09 billion in fiscal 2001
  2. Net earnings of $124.4 million, or $1.04 per diluted share, versus $75.1 million, or $0.65 per diluted share, in fiscal 2001
  3. Gross margin rose to 40.3% of net revenues from 38.1%; operating margin rose to 8.6% from 6.1%
  4. Comparable store sales increased 2.7%; the store count grew to 478 from 415
  5. Cash and equivalents of $193.5 million, operating cash flow of $310.2 million, and no line-of-credit borrowings at year-end
  6. Repurchased 2 million shares for approximately $48.4 million in the fourth quarter; a new program authorizes up to 4 million shares
  7. Planned fiscal 2003 retail leased square footage increase of about 9% to 11%, roughly 34 net new stores

03—Questions

Frequently Asked Questions

  1. How did Williams-Sonoma's profitability change in fiscal 2002?

    Net earnings increased to $124.4 million from $75.1 million, and diluted EPS rose to $1.04 from $0.65. Gross margin widened to 40.3% of net revenues from 38.1%, and the company cited operational improvements including lower cost of merchandise, fewer markdowns and lower freight costs.

  2. What is the split between retail and direct-to-customer businesses?

    Based on fiscal 2002 net revenues, retail accounted for 60.3% and direct-to-customer for 39.7%. Retail sales rose 15.2% to $1.42 billion, while direct-to-customer sales grew 8.5% to $798.2 million, with Internet sales reaching $200.4 million.

  3. Does Williams-Sonoma pay dividends, and how is it returning capital?

    The company has never declared or paid a cash dividend and does not currently intend to do so. Instead, it repurchased and retired 2 million shares for about $48.4 million in the fourth quarter under a program authorizing up to 4 million shares.

  4. What are the main risks flagged for the business?

    The filing highlights changing consumer preferences and inventory management, sensitivity to consumer spending, the ability to open new stores successfully, dependence on foreign vendors (about 58% of merchandise purchases were foreign sourced), e-commerce and catalog cost pressures, and a planned systems overhaul that could disrupt supply chain operations.

  5. Will the Memphis distribution partnerships affect the balance sheet?

    Yes. Management determined that two related-party partnerships from which the company leases Memphis distribution facilities are variable interest entities under FIN No. 46, so they will be consolidated as of August 4, 2003. The company estimates this will add about $16 million in assets and $18 million in liabilities, with a cumulative effect charge of about $2 million after taxes.

04—Continue

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