01—Abstract
Summary
Summary of the 10-K filed March 28, 2022. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. is an omni-channel specialty retailer of high-quality products for the home, selling through e-commerce websites, direct-mail catalogs and retail stores across brands including Williams Sonoma, Pottery Barn, Pottery Barn Kids and Teen, West Elm, Williams Sonoma Home, Rejuvenation and Mark and Graham.
For fiscal 2021 (52 weeks ended January 30, 2022), net revenues increased by $1,462,747,000,a or 21.6%, to $8,245,936,000, with comparable brand revenue growth of 22.0% and double-digit comparable brand revenue growth across all brands. Net earnings rose to $1,126,337,000 from $680,714,000, and diluted earnings per share were $14.75 versus $8.61 in fiscal 2020. Gross margin improved, with cost of goods sold falling to 56.0% of net revenues from 61.1%, while selling, general and administrative expenses rose to 26.4% of net revenues from 25.4%, driven by higher advertising spending.
The company ended the year with $850,338,000b in cash and cash equivalents, generated operating cash flow of $1,371,147,000, and had no outstanding revolver borrowings. It returned approximately $1,086,972,000 to shareholders through share repurchases and dividends, repurchasing 5,102,624 shares for $899,433,000 during the year.
In March 2022, the Board authorized a new $1,500,000,000c repurchase program and a 10% increase in the quarterly dividend, from $0.71 to $0.78 per share. Management identified ongoing global supply chain disruptions, including port congestion and container shortages, as a continuing challenge into fiscal 2022, and planned to invest approximately $350,000,000 in the business, with over 80% prioritized on technology and supply chain initiatives.
02—Key points
Key Highlights
- Net revenues of $8,245,936,000 in fiscal 2021, up $1,462,747,000 or 21.6% from fiscal 2020, with comparable brand revenue growth of 22.0%
- Net earnings of $1,126,337,000 and diluted EPS of $14.75, compared with net earnings of $680,714,000 and diluted EPS of $8.61 in fiscal 2020
- Gross margin expanded as cost of goods sold fell to 56.0% of net revenues from 61.1%, reflecting reduced promotional activity and occupancy leverage
- Pottery Barn reported net revenues of $3,120,687,000 and 23.9% comparable brand revenue growth; West Elm grew comparable brand revenue 33.1%
- Cash and cash equivalents of $850,338,000 at year-end, operating cash flow of $1,371,147,000, and no revolver borrowings outstanding
- Shareholder returns of approximately $1,086,972,000 in fiscal 2021, with a new $1,500,000,000 stock repurchase program and a 10% quarterly dividend increase authorized in March 2022
- Supply chain disruptions, including port congestion, container shortages and higher shipping costs, are expected to continue into fiscal 2022
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Williams-Sonoma kept $0.14.
- Revenue$8.25B100.0%
- Cost of revenue−$4.61B56.0%
- Gross profit$3.63B44.0%
- Operating costs−$2.18B26.4%
- Operating income$1.45B17.6%
- Interest, other & tax−$327.1M4.0%
- Net income$1.13B13.7%
Where FY2022 revenue went
$8.25B- Cost of revenue: $4.61B, 56% of revenue
- SG&A: $2.18B, 26% of revenue
- Net income: $1.13B, 14% of revenue
- Interest, other & tax: $327.1M, 4.0% of revenue
Kept 14% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed March 28, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $8.25B$6.78B | +21.6% |
| Gross Profit | $3.63B$2.64B | +37.8% |
| SG&A Expenses | $2.18B$1.73B | +26.3% |
| Operating Income | $1.45B$910.70M | +59.6% |
| Net Income | $1.13B$680.71M | +65.4% |
| EPS (Basic) | $15.17$8.81 | +72.2% |
| EPS (Diluted) | $14.75$8.61 | +71.3% |
| Shares Outstanding (Basic) | 74.27M77.26M | −3.9% |
| Shares Outstanding (Diluted) | 76.35M79.06M | −3.4% |
05—Questions
Frequently Asked Questions
How did Williams-Sonoma perform financially in fiscal 2021?
Net revenues rose 21.6% to $8,245,936,000, net earnings increased to $1,126,337,000 from $680,714,000, and diluted EPS was $14.75 versus $8.61 in fiscal 2020. Comparable brand revenue grew 22.0%, with double-digit growth across all brands, driven by e-commerce and retail strength and higher furniture sales.
How much did the company return to shareholders, and what are its new capital return plans?
In fiscal 2021 the company returned approximately $1,086,972,000 through share repurchases and dividends, repurchasing 5,102,624 shares for $899,433,000 and declaring $199,395,000 in dividends. In March 2022 the Board authorized a new $1,500,000,000 repurchase program replacing the existing one and a 10% increase in the quarterly dividend, from $0.71 to $0.78 per share, subject to capital availability.
What is the company's liquidity position?
At January 30, 2022, the company held $850,338,000 in cash and cash equivalents and had no borrowings under its revolving credit line, which provides for up to $500,000,000 and can be increased by up to $250,000,000. Management stated that cash on hand, operating cash flows and available credit facilities will provide adequate liquidity over the next 12 months, and that it was in compliance with its financial covenants.
What risks did management highlight for fiscal 2022?
Management highlighted global supply chain disruptions, including COVID-19 related factory closures, port congestion, shipping container shortages and higher shipping-related charges, which it expects to continue into fiscal 2022. The filing also cites the Vietnam shutdown and backlog as affecting Pottery Barn Kids and Teen, with impacts expected until at least the second quarter of fiscal 2022, and potential International Longshore & Warehouse Union negotiations in the first half of 2022.
How is the company planning to invest for growth?
The company plans to invest approximately $350,000,000 in the business, with over 80% of the spend prioritized on technology and supply chain initiatives, primarily to support e-commerce, including a new automated distribution center in Arizona. Its strategy emphasizes e-commerce, emerging brands such as Rejuvenation and Mark and Graham, its business-to-business division and marketplace, and global operations.
06—Continue