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Williams-Sonoma Annual Report, Year Ended Jan 29, 2023

Filing Date
Filed March 24, 2023
Period End
January 29, 2023
Security
WSM
One revenue dollarkept$0.13
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. Material agreement8-K · Sep ’16Sep ’16
  2. Material agreement8-K · Aug ’19Aug ’19
  3. Leadership change8-K · Nov ’21Nov ’21
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 10-K filed March 24, 2023. 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, operating brands including Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, and Mark and Graham.

For fiscal 2022 (52 weeks ended January 29, 2023), net revenues increased $428.5 milliona, or 5.2%, to $8.67 billion, with company comparable brand revenue growth of 6.5%. Pottery Barn was the largest brand at $3.56 billion in net revenues and delivered 14.9% comparable brand revenue growth, while Williams Sonoma declined 1.7% on a comparable basis. Diluted earnings per share rose to $16.32 from $14.75, and net earnings were $1.13 billion versus $1.13 billion in fiscal 2021.

Cost of goods sold rose to 57.6% of net revenues from 56.0%, while SG&A fell to 25.1% of net revenues from 26.4%. The company ended the year with $367.3 millionb in cash and cash equivalents, no outstanding borrowings under its revolving credit line, and operating cash flow of $1.05 billion. It invested $354.1 million in capital expenditures and returned approximately $1.1 billion to shareholders through share repurchases and dividends.

Management expects supply chain and macroeconomic challenges, including higher product costs, freight, and distribution center costs, to negatively affect results into fiscal 2023, with gross margin pressures possibly becoming tailwinds in the back half of the year. In March 2023, the Board authorized a new $1 billionc stock repurchase program and a 15% increase in the quarterly dividend, from $0.78 to $0.90 per share.

The filing highlights risks tied to consumer spending, the weak housing market, inflation, foreign sourcing (approximately 67%d of merchandise purchases in fiscal 2022 came from foreign vendors), tariffs, and the e-commerce channel, which represented more than 66% of net revenues and profits in fiscal 2022. The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion, and management concluded internal control over financial reporting was effective as of January 29, 2023.

02—Key points

Key Highlights

  1. Net revenues rose $428.5 million, or 5.2%, to $8.67 billion in fiscal 2022, with company comparable brand revenue growth of 6.5%.
  2. Pottery Barn, the largest brand at $3.56 billion in net revenues, delivered 14.9% comparable brand revenue growth; Williams Sonoma declined 1.7% comparably.
  3. Diluted EPS increased to $16.32 from $14.75; net earnings were $1.13 billion, and gross margin declined as cost of goods sold rose to 57.6% of net revenues from 56.0%.
  4. SG&A fell to 25.1% of net revenues from 26.4%, driven by leverage of employment costs and advertising expenses.
  5. Ended the year with $367.3 million in cash, no revolver borrowings, and $1.05 billion in operating cash flow, funding $354.1 million of capital expenditures.
  6. Returned approximately $1.1 billion to shareholders in fiscal 2022 through repurchases and dividends; March 2023 authorization of a new $1 billion buyback and a dividend increase from $0.78 to $0.90 per quarter.
  7. E-commerce represented more than 66% of net revenues and profits in fiscal 2022, while management expects supply chain and macroeconomic pressures to weigh on results into fiscal 2023.

03—One dollar

Follow one dollar

Of each $1.00 of revenue in FY2023, Williams-Sonoma kept $0.13.

  1. Revenue$8.67B100.0%
  2. Cost of revenue−$5.00B57.6%
  3. Gross profit$3.68B42.4%
  4. Operating costs−$2.18B25.1%
  5. Operating income$1.50B17.3%
  6. Interest, other & tax−$370.4M4.3%
  7. Net income$1.13B13.0%
Computed from 10-KFY2023filed March 24, 2023Computed from this filing’s revenue, gross profit, operating income and net income · right columngrey figure: share of revenue

Where FY2023 revenue went

$8.67B
  • Cost of revenue: $5.00B, 58% of revenue
  • SG&A: $2.18B, 25% of revenue
  • Net income: $1.13B, 13% of revenue
  • Interest, other & tax: $370.4M, 4.3% of revenue

Kept 13% as net income

Full revenue history →

04—Financials

Financial Highlights

Figures from 10-KFY2023filed March 24, 2023
Revenue$8.67B42.4% Gross MarginNet Income$1.13B13.0% Net MarginEPS (Diluted)$8.16Free Cash Flow$698.71M

Financial Statements

FY2023 against FY2022

Line itemFY2023FY2022Change
Revenue$8.67B$8.25B+5.2%
Gross Profit$3.68B$3.63B+1.3%
SG&A Expenses$2.18B$2.18B0.0%
Operating Income$1.50B$1.45B+3.1%
Net Income$1.13B$1.13B+0.2%
EPS (Basic)$8.29$15.17−45.4%
EPS (Diluted)$8.16$14.75−44.7%
Shares Outstanding (Basic)136.04M74.27M+83.2%
Shares Outstanding (Diluted)138.20M76.35M+81.0%

05—Questions

Frequently Asked Questions

  1. How did Williams-Sonoma perform financially in fiscal 2022?

    Net revenues increased $428.5 million, or 5.2%, to $8.67 billion, and company comparable brand revenue grew 6.5%. Net earnings were $1.13 billion, and diluted earnings per share were $16.32, compared with $14.75 in fiscal 2021.

  2. Which brands drove results, and which lagged?

    Pottery Barn, the largest brand with $3.56 billion in net revenues, delivered 14.9% comparable brand revenue growth. West Elm grew 2.5% comparably, Pottery Barn Kids and Teen grew 0.4%, and Williams Sonoma declined 1.7%.

  3. What did management say about the outlook for fiscal 2023?

    Management expects supply chain challenges, higher product costs, higher freight, and incremental distribution center costs to negatively affect results into fiscal 2023. It noted that gross margin pressures may become tailwinds in the back half of the year, and it cited a weak housing market, layoffs, inflationary pressure, and possible recession as factors that may affect results.

  4. How strong is the company's balance sheet and liquidity?

    The company held $367.3 million in cash and cash equivalents and had no outstanding revolver borrowings as of January 29, 2023. Its $500 million revolving credit facility can be increased by up to $250 million, and management believes cash, operating cash flow, and credit facilities will provide adequate liquidity over the next 12 months.

  5. What shareholder returns did the company announce?

    Shareholder returns totaled approximately $1.1 billion in fiscal 2022 through share repurchases and dividends. In March 2023, the Board authorized a new $1 billion stock repurchase program and raised the quarterly dividend 15%, from $0.78 to $0.90 per share.

06—Continue

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