01—Abstract
Summary
Summary of the 10-K filed April 2, 2015. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported fiscal 2014 (52 weeks ended February 1, 2015) net revenues of $4,698,719 thousanda, up 7.1% from $4,387,889 thousand in fiscal 2013, with comparable brand revenue growth of 7.1%.
Diluted earnings per share rose to $3.24b from $2.82, and net earnings were $308,854 thousand. E-commerce net revenues grew 12.1% to $2,370,694 thousand and now exceed half of total net revenues (50.5%), while retail net revenues grew 2.4% to $2,328,025 thousand. Gross margin declined to 38.3% from 38.8%, mainly from lower selling margins, while selling, general and administrative expenses fell to 27.6% of net revenues from 28.5%.
The company operated 601 stores at year-end, up from 585, with 35 openings and 19 closings during the year. Growth was led by West Elm, with comparable brand revenues up 18.2%c, and Pottery Barn, the largest brand, with comparable brand revenues up 5.8%. Management plans to invest in its e-commerce platform, supply chain, new stores (particularly West Elm), and longer-term growth initiatives including global expansion and newer businesses.
Capital returns remained significant: the company returned $350,135 thousandd to stockholders through repurchases and dividends during fiscal 2014. As of February 1, 2015, $287,000 thousand remained under a $750,000 thousand repurchase program, and the Board authorized a quarterly dividend increase from $0.33 to $0.35 per share in March 2015. Cash and cash equivalents were $222,927 thousand, and the company stated that its cash and available credit facilities would provide adequate liquidity for the next 12 months.
02—Key points
Key Highlights
- Net revenues rose 7.1% to $4,698,719 thousand; comparable brand revenue growth was 7.1%.
- Diluted EPS increased to $3.24 from $2.82, including a $0.04 benefit from the share of the VISA/MasterCard antitrust litigation settlement.
- E-commerce net revenues grew 12.1% to $2,370,694 thousand and represented 50.5% of net revenues, versus 48.2% in fiscal 2013.
- Gross margin declined to 38.3% from 38.8%, primarily due to lower selling margins; operating margin improved to 10.7% from 10.3%.
- The company operated 601 stores at year-end, with West Elm comparable brand revenues up 18.2% and Pottery Barn up 5.8%.
- Stockholders received $350,135 thousand through repurchases and dividends; $287,000 thousand remained under the $750,000 thousand repurchase program.
- The Board authorized a 6% increase in the quarterly dividend to $0.35 per share in March 2015, equal to an annual dividend of $1.40 per share.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Williams-Sonoma kept $0.07.
- Revenue$4.70B100.0%
- Cost of revenue−$2.90B61.7%
- Gross profit$1.80B38.3%
- Operating costs−$1.30B27.6%
- Operating income$502.3M10.7%
- Interest, other & tax−$193.4M4.1%
- Net income$308.9M6.6%
Where FY2015 revenue went
$4.70B- Cost of revenue: $2.90B, 62% of revenue
- SG&A: $1.30B, 28% of revenue
- Net income: $308.9M, 6.6% of revenue
- Interest, other & tax: $193.4M, 4.1% of revenue
Kept 6.6% as net incomeNet income $308.9M · 6.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed April 2, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $4.70B$4.39B | +7.1% |
| Gross Profit | $1.80B$1.70B | +5.6% |
| SG&A Expenses | $1.30B$1.25B | +3.7% |
| Operating Income | $502.26M$452.10M | +11.1% |
| Net Income | $308.85M$278.90M | +10.7% |
| EPS (Basic) | $3.30$2.89 | +14.2% |
| EPS (Diluted) | $3.24$2.82 | +14.9% |
| Shares Outstanding (Basic) | 93.63M96.67M | −3.1% |
| Shares Outstanding (Diluted) | 95.20M98.77M | −3.6% |
05—Questions
Frequently Asked Questions
How did Williams-Sonoma perform in fiscal 2014?
Net revenues increased 7.1% to $4,698,719 thousand, net earnings rose to $308,854 thousand from $278,902 thousand, and diluted EPS reached $3.24 versus $2.82 in fiscal 2013. Growth was driven primarily by the West Elm and Pottery Barn brands.
Is the e-commerce channel now the company's largest source of revenue?
Yes. E-commerce net revenues were $2,370,694 thousand, or 50.5% of net revenues, compared with $2,115,022 thousand, or 48.2%, in fiscal 2013. Retail net revenues were $2,328,025 thousand, or 49.5%.
What pressures affected profitability?
Cost of goods sold rose to 61.7% of net revenues from 61.2%, primarily driven by lower selling margins, which reduced gross margin to 38.3%. Selling, general and administrative expenses fell to 27.6% of net revenues from 28.5%, mainly because of greater advertising efficiency and lower general expenses.
How is the company returning cash to shareholders and what is its liquidity position?
During fiscal 2014 the company repurchased 3,331,557 shares for $224,377 thousand and paid $125,758 thousand in dividends. Cash and cash equivalents were $222,927 thousand at February 1, 2015, and the company stated that its cash on hand and available credit facilities would provide adequate liquidity for the next 12 months. The company had a $500,000 thousand unsecured revolving credit facility with no amounts outstanding at year-end.
What are the company's plans for fiscal 2015?
The company plans to invest in its e-commerce platform, supply chain initiatives, new stores (particularly in the West Elm brand), and longer-term growth initiatives including newer businesses and global expansion. It also plans to use cash for inventory, advertising, stock repurchases, dividends and property and equipment purchases.
06—Continue