Exhibit 99.1
WILLIAMS-SONOMA, INC.
3250 Van Ness Avenue
San Francisco, CA 94109
| | | | | | |
| | | | | | CONTACT: |
| | | | | | Julie P. Whalen |
| | | | | | EVP, Chief Financial Officer |
| | | | | | (415) 616-8524 |
| | | |
| | | | | | Gabrielle L. Rabinovitch |
| | | | | | Vice President, Investor Relations |
| | | | | | (415) 616-7727 |
PRESS RELEASE
Williams-Sonoma, Inc. announces fourth quarter and fiscal year 2014 results
FY 14 net revenues reach $4.7 billion with 7.1% comparable brand revenue growth
FY 14 GAAP EPS grows 15% to $3.24; FY 14 non-GAAP EPS grows 13% to $3.20
FY 14 e-commerce grows 12% to $2.4 billion with a 23.6% operating margin
San Francisco, CA, March 18, 2015 – Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the fourth fiscal quarter of 2014 (“Q4 14”) and fiscal year 2014 (“FY 14”) ended February 1, 2015 versus the fourth fiscal quarter of 2013 (“Q4 13”) and fiscal year 2013 (“FY 13”) ended February 2, 2014.
4th QUARTER 2014 RESULTS
| | • | | Q4 14 net revenues grew 5.2% to $1.542 billion versus $1.466 billion in Q4 13 with comparable brand revenue growth of 5.1%. |
| | • | | Q4 14 operating margin increased to 15.4% versus 14.8% in Q4 13. Excluding unusual business events, Q4 14 non-GAAP operating margin was 14.9%. (See Exhibit 1 for a reconciliation of GAAP to non-GAAP operating margin). |
| | • | | Q4 14 diluted earnings per share (“EPS”) grew 13.8% to $1.57 from $1.38 in Q4 13. Excluding unusual business events, Q4 14 non-GAAP EPS increased 10.1% to $1.52. (See Exhibit 1 for a reconciliation of GAAP to non-GAAP EPS). |
FISCAL YEAR 2014 RESULTS
| | • | | FY 14 net revenues grew 7.1% to $4.699 billion versus $4.388 billion in FY 13 with comparable brand revenue growth of 7.1%. |
| | • | | FY 14 operating margin increased to 10.7% versus 10.3% in FY 13. Excluding unusual business events, FY 14 non-GAAP operating margin increased to 10.5% versus 10.4% in FY 13. (See Exhibit 1). |
| | • | | FY 14 EPS grew 14.9% to $3.24 from $2.82 in FY 13. Excluding unusual business events, FY 14 non-GAAP EPS grew 12.7% to $3.20 from $2.84 in FY 13. (See Exhibit 1). |
| | • | | Cash returned to stockholders in FY 14 totaled $350 million, comprising $224 million in stock repurchases and $126 million in dividends. |
Laura Alber, President and Chief Executive Officer, commented, “Our powerful brands and the competitive advantage provided by our multi-channel platform and entrepreneurial culture delivered another year of strong returns for our shareholders. In 2014, we experienced growth in all of our brands and across our channels. Our highly profitable e-commerce business represented more than 50% of our revenues in 2014, a significant milestone for Williams-Sonoma, Inc., as we capitalize on our position at the intersection of retail and technology. We are very pleased with our fourth quarter results despite the effects of the west coast port disruption. Unfortunately, we expect this disruption to continue and to have a more significant impact through the first half of 2015.”
Alber concluded, “We have driven consistent profitable growth through innovation, operational excellence and our customer-centered approach, along with exceptional financial discipline. We believe there is a significant opportunity to expand our reach domestically and globally. Our long-term outlook is strong and we are focused on execution.”
4th QUARTER 2014 RESULTS
Net revenues increased to $1.542 billion in Q4 14 from $1.466 billion in Q4 13.
Comparable brand revenue growth in Q4 14 increased 5.1% on top of 10.4% in Q4 13 as shown in the table below:
| | | | | | | | |
|
4th Quarter Comparable Brand Revenue Growth by Concept* |
|
| | | Q4 14 | | | | | Q4 13 |
|
Pottery Barn | | | 2.9% | | | | | 14.6% |
Williams-Sonoma | | | 2.8% | | | | | 2.3% |
West Elm | | | 19.6% | | | | | 18.3% |
Pottery Barn Kids | | | 2.7% | | | | | 11.2% |
PBteen | | | 3.0% | | | | | 9.6% |
|
Total | | | 5.1% | | | | | 10.4% |
|
* See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue growth. |
E-commerce net revenuesin Q4 14 increased 9.0% to $770 million from $706 million in Q4 13. E-commerce net revenues generated 50% of total company net revenues in Q4 14, compared to 48% in Q4 13.
Retail net revenues in Q4 14 increased 1.6% to $772 million from $760 million in Q4 13.
Operating margin in Q4 14 increased to 15.4% compared to 14.8% in Q4 13. Excluding unusual business events, non-GAAP operating margin was 14.9% in Q4 14 versus 14.8% in Q4 13:
| | • | | Gross margin was 40.1% versus 40.6% in Q4 13. |
| | • | | Selling, general and administrative (“SG&A”) expenses were $381 million, or 24.7% of net revenues, versus $378 million, or 25.8% of net revenues, in Q4 13. Excluding unusual business events, non-GAAP SG&A expenses were $388 million, or 25.2% of net revenues, in Q4 14. |
EPS in Q4 14 increased 13.8% to $1.57 from $1.38 in Q4 13. Excluding unusual business events, non-GAAP EPS increased 10.1% to $1.52.
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FISCAL YEAR 2014 RESULTS
Net revenues increased to $4.699 billion in FY 14 from $4.388 billion in FY 13.
Comparable brand revenue growth in FY 14 increased 7.1% on top of 8.8% in FY 13 as shown in the table below:
| | | | | | | | | | | | | | | | | | |
|
Fiscal Year Net Revenues and Comparable Brand Revenue Growth by Concept* |
|
| | | Net Revenues (Millions) | | | | | Comparable Brand
Revenue Growth |
|
| | | FY 14 | | | | | FY 13 | | | | | FY 14 | | | | FY 13 |
|
Pottery Barn | | $ | 2,022 | | | | | $ | 1,911 | | | | | 5.8% | | | | 10.4% |
Williams-Sonoma | | | 995 | | | | | | 978 | | | | | 3.8% | | | | 1.5% |
West Elm | | | 669 | | | | | | 531 | | | | | 18.2% | | | | 17.4% |
Pottery Barn Kids | | | 625 | | | | | | 598 | | | | | 5.9% | | | | 7.8% |
PBteen | | | 261 | | | | | | 246 | | | | | 5.7% | | | | 14.1% |
Other | | | 127 | | | | | | 124 | | | | | N/A | | | | N/A |
|
Total | | $ | 4,699 | | | | | $ | 4,388 | | | | | 7.1% | | | | 8.8% |
|
* See the company’s 10-K and 10-Q filings for the definition of comparable brand revenue growth. |
E-commerce net revenues in FY 14 increased 12.1% to $2.371 billion versus $2.115 billion in FY 13. E-commerce net revenues generated more than 50% of total company net revenues in FY 14 versus 48% in FY 13.
Retail net revenues in FY 14 increased 2.4% to $2.328 billion versus $2.273 billion in FY 13.
Operating margin in FY 14 was 10.7% versus 10.3% in FY 13. Excluding unusual business events, non-GAAP operating margin in FY 14 was 10.5% versus 10.4% in FY 13.
| | • | | Gross margin was 38.3% versus 38.8% in FY 13. |
| | • | | SG&A expenses were $1.298 billion, or 27.6% of net revenues, versus $1.252 billion, or 28.5% of net revenues, in FY 13. Excluding unusual business events, non-GAAP SG&A expenses were $1.306 billion, or 27.8% of net revenues, versus $1.249 billion, or 28.5% of net revenues, in FY 13. |
The effective income tax rate in FY 14 was 38.5% versus 38.4% in FY 13.
EPS in FY 14 increased 14.9% to $3.24 from $2.82 in FY 13. Excluding unusual business events, non-GAAP EPS in FY 14 increased 12.7% to $3.20 from $2.84 in FY 13.
Merchandise inventories at the end of FY 14 increased 9.2% to $888 million from $813 million at the end of FY 13. Inventory on-hand and available-for-sale grew 3.0% year-over-year. The Pottery Barn portfolio of brands had the lowest levels of inventory on-hand growth. In Pottery Barn, the largest brand, inventory on-hand and available-for-sale was 8.8% lower year-over-year at the end of FY 14.
STOCK REPURCHASE PROGRAM AND DIVIDEND INCREASE
During Q4 14, we repurchased approximately 396,000 shares of common stock for a total of 3.3 million shares or $224 million in FY 14. As of February 1, 2015, $287 million remained under the three-year $750 million stock repurchase program announced in March 2013.
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As announced in a separate release today, our Board of Directors has authorized a 6% increase in our quarterly cash dividend to $0.35 per common share.
FISCAL YEAR 2015 FINANCIAL GUIDANCE
The impact of the west coast port slowdown is anticipated to be a $30 to $40 million reduction in net revenues and a $0.10 to $0.12 reduction in EPS in fiscal year 2015, which predominantly affects the first quarter guidance.
| | |
|
1st Quarter 2015 Guidance Financial Highlights (Includes impact of the west coast port slowdown) |
| |
Total Net Revenues (millions) | | $990 – $1,010 |
Comparable Brand Revenue Growth | | 2% – 4% |
Diluted EPS | | $0.40 – $0.45 |
| | |
|
Fiscal Year 2015 Guidance Financial Highlights (Includes impact of the west coast port slowdown) |
Total Net Revenues (millions) | | $4,950 – $5,020 |
Comparable Brand Revenue Growth | | 4% – 6% |
Operating Margin | | 10.2% – 10.5% |
Diluted EPS | | $3.35 – $3.45 |
Income Tax Rate | | 38.3% – 38.8% |
Capital Spending (millions) | | $200 – $220 |
Depreciation and Amortization (millions) | | $170 – $180 |
| | | | | | | | | | | | | | | | | | | | |
|
Store Opening and Closing Guidance by Retail Concept* |
| | | FY 2014 ACT | | | | | FY 2015 GUID |
|
| | | Total | | | | | New | | | | | Close | | | | | End |
|
Williams-Sonoma | | | 243 | | | | | | 2 | | | | | | (10 | ) | | | | 235 |
Pottery Barn | | | 199 | | | | | | 2 | | | | | | (6 | ) | | | | 195 |
Pottery Barn Kids | | | 85 | | | | | | 5 | | | | | | (4 | ) | | | | 86 |
West Elm | | | 69 | | | | | | 19 | | | | | | - | | | | | 88 |
Rejuvenation | | | 5 | | | | | | 1 | | | | | | - | | | | | 6 |
|
Total | | | 601 | | | | | | 29 | | | | | | (20 | ) | | | | 610 |
|
* Included in the FY 14 store count are 13 stores in Australia and one store in the UK. FY 15 guidance includes six additional Australian stores. |
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CONFERENCE CALL AND WEBCAST INFORMATION
Williams-Sonoma, Inc. will host a live conference call today, March 18, 2015, at 2:00 PM (PT). The call, hosted by Laura Alber, President and Chief Executive Officer, will be open to the general public via live webcast and can be accessed atwww.williams-sonomainc.com/webcast. A replay of the webcast will be available atwww.williams-sonomainc.com/webcast.
SEC REGULATION G — NON-GAAP INFORMATION
This press release includes non-GAAP SG&A, operating income, operating margin and diluted EPS. These non-GAAP financial measures exclude the impact of employee separation charges in FY 13 and a litigation settlement received in FY 14. We have reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in the text of this release and in Exhibit 1. We believe that these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of our quarterly and FY 14 actual results on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements relating to: the strength of our brands, our competitive advantage and position; the impact of the west coast port disruption on our business; our opportunity to expand our reach; our long-term outlook; our future financial guidance, including first quarter 2015 and fiscal year 2015 guidance; our three-year stock repurchase program; and our proposed store openings and closures.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: accounting adjustments as we close our books for Q4 14 and as audited year-end financial statements are prepared; continuing changes in general economic conditions, and the impact on consumer confidence and consumer spending; new interpretations of or changes to current accounting rules; our ability to anticipate consumer preferences and buying trends; dependence on timely introduction and customer acceptance of our merchandise; changes in consumer spending based on weather, political, competitive and other conditions beyond our control; delays in store openings; competition from companies with concepts or products similar to ours; timely and effective sourcing of merchandise from our foreign and domestic vendors and delivery of merchandise through our supply chain to our stores and customers; effective inventory management; our ability to manage customer returns; successful catalog management, including timing, sizing and merchandising; uncertainties in e-marketing, infrastructure and regulation; multi-channel and multi-brand complexities; our ability to introduce new brands and brand extensions; challenges associated with our increasing global presence; dependence on external funding sources for operating capital; disruptions in the financial markets; our ability to control employment, occupancy and other operating costs; our ability to improve our systems and processes; changes to our information technology infrastructure; general political, economic and market conditions and events, including war, conflict or acts of terrorism; and other risks and uncertainties described more fully in our public announcements, reports to stockholders and other documents filed with or furnished to the SEC, including our Annual Report on Form 10-K for the fiscal year ended February 2, 2014, and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
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ABOUT WILLIAMS-SONOMA, INC.
Williams-Sonoma, Inc. is a specialty retailer of high-quality products for the home. These products, representing eight distinct merchandise strategies – Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams-Sonoma Home, Rejuvenation, and Mark and Graham – are marketed throughe-commerce websites, direct mail catalogs and 601 stores. Williams-Sonoma, Inc. currently operates in the United States, Canada, Australia and the United Kingdom, offers international shipping to customers worldwide, and has unaffiliated franchisees that operate stores in the Middle East and the Philippines.
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Earnings (unaudited)
Thirteen weeks ended February 1, 2015 and February 2, 2014
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | 4th Quarter | |
| | | 2014 | | | 2013 | |
| | | $ | | | % of
Revenues | | | $ | | | % of
Revenues | |
E-commerce* net revenues | | $ | 769,840 | | | | 49.9 | % | | $ | 706,407 | | | | 48.2 | % |
Retail net revenues | | | 772,285 | | | | 50.1 | | | | 759,917 | | | | 51.8 | |
| | | | | | | | | | | | | | | | |
Net revenues | | | 1,542,125 | | | | 100.0 | | | | 1,466,324 | | | | 100.0 | |
Cost of goods sold | | | 923,534 | | | | 59.9 | | | | 870,605 | | | | 59.4 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 618,591 | | | | 40.1 | | | | 595,719 | | | | 40.6 | |
Selling, general and administrative expenses | | | 380,708 | | | | 24.7 | | | | 377,984 | | | | 25.8 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 237,883 | | | | 15.4 | | | | 217,735 | | | | 14.8 | |
Interest (income) expense, net | | | (26 | ) | | | — | | | | (168 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 237,909 | | | | 15.4 | | | | 217,903 | | | | 14.9 | |
Income taxes | | | 90,872 | | | | 5.9 | | | | 84,105 | | | | 5.7 | |
| | | | | | | | | | | | | | | | |
Net earnings | | $ | 147,037 | | | | 9.5 | % | | $ | 133,798 | | | | 9.1 | % |
| | | | | | | | | | | | | | | | |
Earnings per share (EPS): | | | | | | | | | | | | | | | | |
Basic | | $ | 1.60 | | | | | | | $ | 1.42 | | | | | |
Diluted | | $ | 1.57 | | | | | | | $ | 1.38 | | | | | |
Shares used in calculation of EPS: | | | | | | | | | | | | | | | | |
Basic | | | 92,087 | | | | | | | | 94,271 | | | | | |
Diluted | | | 93,641 | | | | | | | | 96,973 | | | | | |
| * | Prior to Q3 14, we referred to the e-commerce channel as the direct-to-customer channel. |
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Earnings (unaudited)
Fifty-two weeks ended February 1, 2015 and February 2, 2014
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | Fiscal Year | |
| | | 2014 | | | 2013 | |
| | | $ | | | % of
Revenues | | | $ | | | % of
Revenues | |
E-commerce* net revenues | | $ | 2,370,694 | | | | 50.5 | % | | $ | 2,115,022 | | | | 48.2 | % |
Retail net revenues | | | 2,328,025 | | | | 49.5 | | | | 2,272,867 | | | | 51.8 | |
| | | | | | | | | | | | | | | | |
Net revenues | | | 4,698,719 | | | | 100.0 | | | | 4,387,889 | | | | 100.0 | |
Cost of goods sold | | | 2,898,215 | | | | 61.7 | | | | 2,683,673 | | | | 61.2 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 1,800,504 | | | | 38.3 | | | | 1,704,216 | | | | 38.8 | |
Selling, general and administrative expenses | | | 1,298,239 | | | | 27.6 | | | | 1,252,118 | | | | 28.5 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 502,265 | | | | 10.7 | | | | 452,098 | | | | 10.3 | |
Interest (income) expense, net | | | 62 | | | | — | | | | (584 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 502,203 | | | | 10.7 | | | | 452,682 | | | | 10.3 | |
Income taxes | | | 193,349 | | | | 4.1 | | | | 173,780 | | | | 4.0 | |
| | | | | | | | | | | | | | | | |
Net earnings | | $ | 308,854 | | | | 6.6 | % | | $ | 278,902 | | | | 6.4 | % |
| | | | | | | | | | | | | | | | |
Earnings per share (EPS): | | | | | | | | | | | | | | | | |
Basic | | $ | 3.30 | | | | | | | $ | 2.89 | | | | | |
Diluted | | $ | 3.24 | | | | | | | $ | 2.82 | | | | | |
Shares used in calculation of EPS: | | | | | | | | | | | | | | | | |
Basic | | | 93,634 | | | | | | | | 96,669 | | | | | |
Diluted | | | 95,200 | | | | | | | | 98,765 | | | | | |
| * | Prior to Q3 14, we referred to the e-commerce channel as the direct-to-customer channel. |
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Williams-Sonoma, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | |
| | | Feb. 1,
2015 | | | Feb. 2,
2014 | |
Assets | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 222,927 | | | $ | 330,121 | |
Restricted cash | | | - | | | | 14,289 | |
Accounts receivable, net | | | 67,465 | | | | 60,330 | |
Merchandise inventories, net | | | 887,701 | | | | 813,160 | |
Prepaid catalog expenses | | | 33,942 | | | | 33,556 | |
Prepaid expenses | | | 36,265 | | | | 35,309 | |
Deferred income taxes, net | | | 130,618 | | | | 121,486 | |
Other assets | | | 13,005 | | | | 10,852 | |
| | | | | | | | |
Total current assets | | | 1,391,923 | | | | 1,419,103 | |
| | | | | | | | |
Property and equipment, net | | | 883,012 | | | | 849,293 | |
Non-current deferred income taxes, net | | | 4,265 | | | | 13,824 | |
Other assets, net | | | 51,077 | | | | 54,514 | |
| | | | | | | | |
Total assets | | $ | 2,330,277 | | | $ | 2,336,734 | |
| | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable | | $ | 397,037 | | | $ | 404,791 | |
Accrued salaries, benefits and other | | | 136,012 | | | | 138,181 | |
Customer deposits | | | 261,679 | | | | 228,193 | |
Income taxes payable | | | 32,488 | | | | 49,365 | |
Current portion of long-term debt | | | 1,968 | | | | 1,785 | |
Other liabilities | | | 46,764 | | | | 38,781 | |
| | | | | | | | |
Total current liabilities | | | 875,948 | | | | 861,096 | |
| | | | | | | | |
Deferred rent and lease incentives | | | 166,925 | | | | 157,856 | |
Long-term debt | | | - | | | | 1,968 | |
Other long-term obligations | | | 62,698 | | | | 59,812 | |
| | | | | | | | |
Total liabilities | | | 1,105,571 | | | | 1,080,732 | |
| | | | | | | | |
Stockholders’ equity | | | | | | | | |
Preferred stock: $.01 par value; 7,500 shares authorized; none issued | | | - | | | | - | |
Common stock: $.01 par value; 253,125 shares authorized; 91,891 and 94,049 shares issued and outstanding at February 1, 2015 and February 2, 2014, respectively | | | 919 | | | | 941 | |
Additional paid-in capital | | | 527,261 | | | | 522,595 | |
Retained earnings | | | 701,214 | | | | 729,043 | |
Accumulated other comprehensive income | | | (2,548 | ) | | | 6,524 | |
Treasury stock, at cost | | | (2,140 | ) | | | (3,101 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 1,224,706 | | | | 1,256,002 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,330,277 | | | $ | 2,336,734 | |
| | | | | | | | |
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
Fifty-two weeks ended February 1, 2015 and February 2, 2014
(Dollars in thousands)
| | | | | | | | |
| | | Fiscal Year | |
| | | 2014 | | | 2013 | |
Cash flows from operating activities | | | | | | | | |
Net earnings | | $ | 308,854 | | | $ | 278,902 | |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | | | | | | | | |
Depreciation and amortization | | | 162,273 | | | | 149,795 | |
Loss on disposal/impairment of assets | | | 2,410 | | | | 2,764 | |
Amortization of deferred lease incentives | | | (24,419 | ) | | | (25,382 | ) |
Deferred income taxes | | | (248 | ) | | | (28,344 | ) |
Tax benefit related to stock-based awards | | | 26,952 | | | | 8,817 | |
Excess tax benefit related to stock-based awards | | | (26,560 | ) | | | (8,743 | ) |
Stock-based compensation expense | | | 44,632 | | | | 38,788 | |
Other | | | 595 | | | | - | |
Changes in: | | | | | | | | |
Accounts receivable | | | (9,366 | ) | | | 786 | |
Merchandise inventories | | | (76,964 | ) | | | (174,664 | ) |
Prepaid catalog expenses | | | (386 | ) | | | 3,675 | |
Prepaid expenses and other assets | | | (61 | ) | | | (13,649 | ) |
Accounts payable | | | 4,455 | | | | 135,095 | |
Accrued salaries, benefits and other current and long-term liabilities | | | 8,867 | | | | 43,635 | |
Customer deposits | | | 34,400 | | | | 21,578 | |
Deferred rent and lease incentives | | | 23,297 | | | | 13,238 | |
Income taxes payable | | | (17,034 | ) | | | 7,478 | |
| | | | | | | | |
Net cash provided by operating activities | | | 461,697 | | | | 453,769 | |
| | | | | | | | |
| | |
Cash flows from investing activities: | | | | | | | | |
Purchases of property and equipment | | | (204,800 | ) | | | (193,953 | ) |
Restricted cash receipts | | | 14,289 | | | | 1,766 | |
Proceeds from insurance reimbursements | | | 1,644 | | | | 1,518 | |
Other | | | 267 | | | | 45 | |
| | | | | | | | |
Net cash used in investing activities | | | (188,600 | ) | | | (190,624 | ) |
| | | | | | | | |
| | |
Cash flows from financing activities: | | | | | | | | |
Repurchase of common stock | | | (224,377 | ) | | | (239,274 | ) |
Payment of dividends | | | (125,758 | ) | | | (111,581 | ) |
Borrowings under revolving line of credit | | | 90,000 | | | | - | |
Repayments of borrowings under revolving line of credit | | | (90,000 | ) | | | - | |
Tax withholdings related to stock-based awards | | | (56,977 | ) | | | (18,096 | ) |
Excess tax benefit related to stock-based awards | | | 26,560 | | | | 8,743 | |
Net proceeds related to stock-based awards | | | 4,077 | | | | 6,614 | |
Repayments of long-term obligations | | | (1,785 | ) | | | (1,724 | ) |
Other | | | (760 | ) | | | (58 | ) |
| | | | | | | | |
Net cash used in financing activities | | | (379,020 | ) | | | (355,376 | ) |
| | | | | | | | |
| | |
Effect of exchange rates on cash and cash equivalents | | | (1,271 | ) | | | (2,203 | ) |
Net decrease in cash and cash equivalents | | | (107,194 | ) | | | (94,434 | ) |
Cash and cash equivalents at beginning of period | | | 330,121 | | | | 424,555 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 222,927 | | | $ | 330,121 | |
| | | | | | | | |
10
Exhibit 1
Reconciliation of 4th Quarter and Fiscal Year Actual GAAP to Non-GAAP Operating Margin By Segment*
($ in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | E-commerce | | | Retail | | | Unallocated | | | Total |
| | | Q4 14 | | | Q4 13 | | | Q4 14 | | | Q4 13 | | | Q4 14 | | | Q4 13 | | | Q4 14 | | | Q4 13 |
Net Revenues | | $ | 769,840 | | | $ | 706,407 | | | $ | 772,285 | | | $ | 759,917 | | | $ | - | | | $ | - | | | $ | 1,542,125 | | | $1,466,324 |
GAAP Operating Income/(Expense) | | | 182,031 | | | | 174,625 | | | | 131,308 | | | | 130,969 | | | | (75,456 | ) | | | (87,859 | ) | | | 237,883 | | | 217,735 |
GAAP Operating Margin | | | 23.6% | | | | 24.7% | | | | 17.0% | | | | 17.2% | | | | (4.9% | ) | | | (6.0% | ) | | | 15.4% | | | 14.8% |
|
Unusual Business Events(1) | | | - | | | | - | | | | - | | | | - | | | | (7,414 | ) | | | - | | | | (7,414 | ) | | - |
Non-GAAP Operating Income/ (Expense) Excluding Unusual Business Events(3) | | $ | 182,031 | | | $ | 174,625 | | | $ | 131,308 | | | $ | 130,969 | | | $ | (82,870 | ) | | $ | (87,859 | ) | | $ | 230,469 | | | $217,735 |
Non-GAAP Operating Margin(3) | | | 23.6% | | | | 24.7% | | | | 17.0% | | | | 17.2% | | | | (5.4% | ) | | | (6.0% | ) | | | 14.9% | | | 14.8% |
|
| | | | |
| | | E-commerce | | | Retail | | | Unallocated | | | Total |
| | | FY 14 | | | FY 13 | | | FY 14 | | | FY 13 | | | FY 14 | | | FY 13 | | | FY 14 | | | FY 13 |
Net Revenues | | $ | 2,370,694 | | | $ | 2,115,022 | | | $ | 2,328,025 | | | $ | 2,272,867 | | | $ | - | | | $ | - | | | $ | 4,698,719 | | | $4,387,889 |
GAAP Operating Income/(Expense) | | | 560,396 | | | | 502,143 | | | | 248,535 | | | | 248,894 | | | | (306,666 | ) | | | (298,939 | ) | | | 502,265 | | | 452,098 |
GAAP Operating Margin | | | 23.6% | | | | 23.7% | | | | 10.7% | | | | 11.0% | | | | (6.5% | ) | | | (6.8% | ) | | | 10.7% | | | 10.3% |
|
Unusual Business Events(1) (2) | | | - | | | | - | | | | - | | | | - | | | | (7,414 | ) | | | 2,936 | | | | (7,414 | ) | | 2,936 |
Non-GAAP Operating Income/ (Expense) Excluding Unusual Business Events(3) | | $ | 560,396 | | | $ | 502,143 | | | $ | 248,535 | | | $ | 248,894 | | | $ | (314,080 | ) | | $ | (296,003 | ) | | $ | 494,851 | | | $455,034 |
Non-GAAP Operating Margin(3) | | | 23.6% | | | | 23.7% | | | | 10.7% | | | | 11.0% | | | | (6.7% | ) | | | (6.7% | ) | | | 10.5% | | | 10.4% |
|
| | * | See the Company’s 10-K and 10-Q filings for additional information on segment reporting and the definition of Operating Income/(Expense) and Operating Margin. |
Reconciliation of Quarterly and Fiscal Year Actual GAAP to Non-GAAP
Diluted Earnings Per Share**
(Totals rounded to the nearest cent per diluted share)
| | | | | | | | | | | | | | | | | | |
| | | Q1 14 ACT | | | | Q2 14 ACT | | | | Q3 14 ACT | | | | Q4 14 ACT | | | | FY 14 ACT |
2014 GAAP Diluted EPS | | $0.48 | | | | $0.53 | | | | $0.68 | | | | $1.57 | | | | $3.24 |
Impact of Unusual Business Events(1) | | - | | | | - | | | | - | | | | (0.05) | | | | (0.04) |
| 2014 Non-GAAP Diluted EPS Excluding Unusual Business Events(3) | | $0.48 | | | | $0.53 | | | | $0.68 | | | | $1.52 | | | | $3.20 |
|
| | | | | | | | | | | | | | | | | | |
| | | Q1 13 ACT | | | | Q2 13 ACT | | | | Q3 13 ACT | | | | Q4 13 ACT | | | | FY 13 ACT |
2013 GAAP Diluted EPS | | $0.40 | | | | $0.49 | | | | $0.58 | | | | $1.38 | | | | $2.82 |
Impact of Unusual Business Events(2) | | 0.02 | | | | - | | | | - | | | | - | | | | 0.02 |
| 2013 Non-GAAP Diluted EPS Excluding Unusual Business Events(3) | | $0.41 | | | | $0.49 | | | | $0.58 | | | | $1.38 | | | | $2.84 |
|
| | ** | Due to the differences between the quarterly and year-to-date weighted average share count calculations and rounding to the nearest cent per diluted share, totals may not equal the sum of the line items and fiscal year diluted EPS may not equal the sum of the quarters. |
Notes:
| | (1) | Impact of Unusual Business Events – During Q4 14, we received our share of the VISA/MasterCard antitrust litigation settlement. This settlement (a benefit) totaled approximately $0.05 and $0.04 per diluted share in Q4 14 and FY 14, respectively, and is recorded in SG&A expenses within the unallocated segment. |
| | (2) | Impact of Unusual Business Events – During Q1 13 and FY 13, we incurred charges of approximately $0.02 per diluted share associated with the previously announced retirement of the former President of the Williams-Sonoma brand. These charges were recorded within the unallocated segment. |
| | (3) | SEC Regulation G – Non-GAAP Information – These tables include non-GAAP operating income, operating margin and diluted EPS. We believe that these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of our quarterly and FY 14 actual results on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. |
11
Store Statistics
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Store Count | | | Avg. Leased Square
Footage Per Store | |
| | | Nov. 2, 2014 | | | Openings | | | Closings | | | Feb. 1, 2015 | | | Feb. 2, 2014 | | | Feb. 1, 2015 | | | Feb. 2, 2014 | |
Williams-Sonoma | | | 248 | | | | 2 | | | | (7 | ) | | | 243 | | | | 248 | | | | 6,600 | | | | 6,600 | |
Pottery Barn | | | 198 | | | | 2 | | | | (1 | ) | | | 199 | | | | 194 | | | | 13,700 | | | | 13,800 | |
Pottery Barn Kids | | | 85 | | | | 3 | | | | (3 | ) | | | 85 | | | | 81 | | | | 7,600 | | | | 7,900 | |
West Elm | | | 68 | | | | 1 | | | | - | | | | 69 | | | | 58 | | | | 13,700 | | | | 14,100 | |
Rejuvenation | | | 4 | | | | 1 | | | | - | | | | 5 | | | | 4 | | | | 10,000 | | | | 13,200 | |
| |
Total | | | 603 | | | | 9 | | | | (11 | ) | | | 601 | | | | 585 | | | | 9,900 | | | | 10,000 | |
| |
| | | | | | | | | | | | |
| | | Nov. 2, 2014 | | | Feb. 1, 2015 | | | Feb. 2, 2014 | |
| Total store selling square footage | | | 3,688,000 | | | | 3,684,000 | | | | 3,590,000 | |
| Total store leased square footage | | | 5,988,000 | | | | 5,965,000 | | | | 5,838,000 | |
12
