01—Abstract
Summary
Summary of the 10-K filed March 31, 2016. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported fiscal 2015 (52 weeks ended January 31, 2016) net revenues that increased 5.9% to $4,976,090,000a from $4,698,719,000 in fiscal 2014, with comparable brand revenue growth of 3.7%.
E-commerce net revenues rose 6.4% to $2,522,580,000b and retail net revenues rose 5.4% to $2,453,510,000. Net earnings were $310,068,000, and diluted earnings per share increased to $3.37 from $3.24 in fiscal 2014. Gross margin declined to 37.1% from 38.3%, as cost of goods sold rose to 62.9% of net revenues from 61.7%, driven by increased shipping and fulfillment costs and higher lower-margin franchise revenues.
Operating income was $488,634,000,c or 9.8% of net revenues, versus $502,265,000 a year earlier. The company ended the year with 618 stores and cash and cash equivalents of $193,647,000, with no borrowings outstanding under its $500,000,000 revolving credit facility. Net cash provided by operating activities rose to $544,026,000 from $461,697,000.
Stockholders returned $352,631,000d through repurchases and dividends during the year, and in March 2016 the Board authorized a new $500,000,000 repurchase program over three years and a 6% increase in the quarterly dividend to $0.37 per share. Management cited four strategies for fiscal 2016: re-asserting product leadership, revolutionizing inventory management, transforming marketing, and changing its approach to real estate and the retail experience. The company also noted it is growing its international franchise operations, with international revenues up 26.8% in fiscal 2015, and that West Elm, with comparable brand revenue growth of 14.8%, was a key growth driver, while PBteen comparable brand revenue declined 2.7%.
02—Key points
Key Highlights
- Net revenues rose 5.9% to $4,976,090,000, with comparable brand revenue growth of 3.7%.
- E-commerce net revenues grew 6.4% to $2,522,580,000 and represented 51% of total net revenues; retail net revenues grew 5.4% to $2,453,510,000.
- Diluted EPS increased to $3.37 from $3.24; net earnings were $310,068,000.
- Gross margin fell to 37.1% from 38.3%, as cost of goods sold rose to 62.9% of net revenues due to higher shipping and fulfillment costs and higher franchise revenues.
- Operating income was $488,634,000, or 9.8% of net revenues, compared with $502,265,000 in fiscal 2014.
- Cash flow from operations rose to $544,026,000; cash and equivalents ended at $193,647,000 with no revolver borrowings outstanding at year-end.
- In March 2016 the Board authorized a new $500,000,000 share repurchase program over three years and raised the quarterly dividend 6% to $0.37 per share.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Williams-Sonoma kept $0.06.
- Revenue$4.98B100.0%
- Cost of revenue−$3.13B62.9%
- Gross profit$1.84B37.1%
- Operating costs−$1.36B27.2%
- Operating income$488.6M9.8%
- Interest, other & tax−$178.6M3.6%
- Net income$310.1M6.2%
Where FY2016 revenue went
$4.98B- Cost of revenue: $3.13B, 63% of revenue
- SG&A: $1.36B, 27% of revenue
- Net income: $310.1M, 6.2% of revenue
- Interest, other & tax: $178.6M, 3.6% of revenue
Kept 6.2% as net incomeNet income $310.1M · 6.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 31, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $4.98B$4.70B | +5.9% |
| Gross Profit | $1.84B$1.80B | +2.4% |
| SG&A Expenses | $1.36B$1.30B | +4.4% |
| Operating Income | $488.63M$502.26M | −2.7% |
| Net Income | $310.07M$308.85M | +0.4% |
| EPS (Basic) | $3.42$3.30 | +3.6% |
| EPS (Diluted) | $3.37$3.24 | +4.0% |
| Shares Outstanding (Basic) | 90.79M93.63M | −3.0% |
| Shares Outstanding (Diluted) | 92.10M95.20M | −3.3% |
05—Questions
Frequently Asked Questions
How did Williams-Sonoma perform in fiscal 2015?
Net revenues increased 5.9% to $4,976,090,000, with comparable brand revenue growth of 3.7%. Net earnings were $310,068,000 and diluted earnings per share were $3.37, up from $3.24 in fiscal 2014.
Which channels and brands drove growth?
E-commerce net revenues increased 6.4% and retail net revenues increased 5.4%. By brand, growth was primarily driven by West Elm, with comparable brand revenue up 14.8%, and Pottery Barn, the company's largest brand, with comparable brand revenue up 1.9%. PBteen comparable brand revenue declined 2.7%.
Why did gross margin decline?
Cost of goods sold rose to 62.9% of net revenues from 61.7%, driven by increased shipping and fulfillment-related costs and higher franchise revenues, which carry a lower gross margin.
How is the company returning capital to shareholders?
During fiscal 2015 the company repurchased shares for $224,995,000 and returned $352,631,000 in total through repurchases and dividends. In March 2016 it authorized a new $500,000,000 repurchase program to be executed over three years and increased its quarterly dividend from $0.35 to $0.37 per share.
What is the company's liquidity position?
As of January 31, 2016, the company held $193,647,000 in cash and cash equivalents, of which $62,332,000 was held by foreign subsidiaries. It had no borrowings outstanding under its $500,000,000 unsecured revolving credit facility at year-end, and management believes cash on hand and available credit will provide adequate liquidity over the next 12 months.
06—Continue