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 |
| | | |
| | | | | | Beth Potillo-Miller |
| | | | | | SVP, Finance & Corporate Treasurer |
| | | | | | Investor Relations |
| | | | | | (415) 616-8643 |
PRESS RELEASE
Williams-Sonoma, Inc. announces third quarter 2016 results
Net revenues grow 1.1% with GAAP EPS of $0.78 and non-GAAP EPS of $0.79
Gross margin improves to 36.8% and merchandise inventories decrease 3.5%
San Francisco, CA, November 17, 2016 – Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the third fiscal quarter ended October 30, 2016 (“Q3 16”) versus the third fiscal quarter ended November 1, 2015 (“Q3 15”).
3rd QUARTER 2016 RESULTS
| | • | | Q3 16 net revenues grew 1.1% to $1.245 billion versus $1.232 billion in Q3 15 with comparable brand revenue decreasing 0.4%. |
| | • | | Q3 16 operating margin was 8.8% versus 9.0% in Q3 15. Excluding unusual business events due to severance-related reorganization charges (see Note 1 in Exhibit 1), non-GAAP operating margin was 8.9% in Q3 16. See Exhibit 1 for a reconciliation of GAAP to non-GAAP operating margin. |
| | • | | Q3 16 diluted earnings per share (“EPS”) was $0.78 versus $0.77 in Q3 15. Excluding unusual business events due to severance-related reorganization charges of approximately $0.01 per diluted share, non-GAAP EPS was $0.79 in Q3 16. See Exhibit 1 for a reconciliation of GAAP to non-GAAP EPS. |
| | • | | Cash returned to stockholders totaled $72 million, comprising $39 million in stock repurchases and $33 million in dividends. |
Laura Alber, President and Chief Executive Officer, commented:“Our third quarter performance demonstrates our competitive strengths – our differentiated portfolio of brands and profitable multi-channel business model – as well as the ongoing success of our strategic initiatives that we have seen this year. We saw continued double-digit growth in West Elm, our newer businesses Rejuvenation and Mark and Graham, and our international company-owned businesses. We also made additional progress across our supply chain and continued to reduce inventory, which resulted in better gross margins, allowing us to meet our earnings commitment at the high end of our guidance range, despite a more difficult retail environment.”
Alber continued: “Although the current environment is less certain, we remain focused on what we can control, and we are confident that the ongoing progress on our strategic initiatives will improve service for our customers and will drive long-term sustainable profitable growth for our shareholders.”
Net revenues increased to $1.245 billion in Q3 16 from $1.232 billion in Q3 15.
Comparable brand revenue in Q3 16 decreased 0.4% compared to 4.5% growth in Q3 15 as shown in the table below:
| | | | | | | | | | | | |
3rd Quarter Comparable Brand Revenue Growth by Concept* | |
| | | Q3 16 | | | | | | Q3 15 | |
Pottery Barn | | | (4.6% | ) | | | | | | | 2.0% | |
Williams-Sonoma | | | 0.1% | | | | | | | | 1.2% | |
West Elm | | | 12.0% | | | | | | | | 15.7% | |
Pottery Barn Kids | | | (1.0% | ) | | | | | | | 4.7% | |
PBteen | | | (10.9% | ) | | | | | | | (0.9% | ) |
Total | | | (0.4% | ) | | | | | | | 4.5% | |
* See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue. | |
E-commerce net revenuesin Q3 16 increased 3.3% to $649 million from $628 million in Q3 15. E-commerce net revenues generated 52.1% of total company net revenues in Q3 16 and 51.0% of total company net revenues in Q3 15.
Retail net revenues in Q3 16 decreased 1.2% to $597 million from $604 million in Q3 15.
Operating margin in Q3 16 was 8.8% compared to 9.0% in Q3 15. Excluding unusual business events, non-GAAP operating margin was 8.9% in Q3 16:
| | • | | Gross margin was 36.8% in Q3 16 versus 36.6% in Q3 15. |
| | • | | Selling, general and administrative (“SG&A”) expenses were $348 million, or 28.0% of net revenues in Q3 16, versus $341 million, or 27.6% of net revenues in Q3 15. Excluding unusual business events due to severance-related reorganization charges of approximately $1.2 million, non-GAAP SG&A expenses were $347 million, or 27.9% of net revenues, in Q3 16. |
EPS in Q3 16 was $0.78 versus $0.77 in Q3 15. Excluding unusual business events, non-GAAP EPS was $0.79 in Q3 16.
Merchandise inventories at the end of Q3 16 decreased 3.5% to $1.064 billion from $1.102 billion at the end of Q3 15.
STOCK REPURCHASE PROGRAM
During Q3 16, we repurchased 771,327 shares of common stock at an average cost of $50.56 per share and a total cost of approximately $39 million. As of October 30, 2016, there was approximately $447 million remaining under our current stock repurchase program.
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FISCAL YEAR 2016 FINANCIAL GUIDANCE
| | |
4th Quarter 2016 Guidance Financial Highlights |
Total Net Revenues (millions) | | $1,570 – $1,650 |
| Comparable Brand Revenue Growth/(Decrease) | | (1%) – 4% |
Diluted EPS | | $1.45 – $1.55 |
| | | |
| | | |
Fiscal Year 2016 Guidance Financial Highlights |
Total Net Revenues (millions) | | $5,070 – $5,150 |
Comparable Brand Revenue Growth | | 1% – 2% |
Non-GAAP Operating Margin* | | 9.4% – 9.6% |
Non-GAAP Diluted EPS** | | $3.35 – $3.45 |
Income Tax Rate | | 37.0% – 38.0% |
Capital Spending (millions) | | $200 – $220 |
Depreciation and Amortization (millions) | | $170 – $180 |
* Excludes severance-related reorganization charges of approximately $14 million, or 0.3% of operating margin during Q1 2016 and Q3 2016. Including these charges, GAAP operating margin guidance would be 9.1% to 9.3%. ** Excludes severance-related reorganization charges of approximately $14 million, or $0.10 per diluted share during Q1 2016 and Q3 2016. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Store Opening and Closing Guidance by Retail Concept* |
| | | FY 2015 ACT | | | FY 2016 GUID |
| | | Total | | | | | | New | | | | | | Close | | | | | | End |
Williams-Sonoma | | | 239 | | | | | | | | 5 | | | | | | | | (10 | ) | | | | | | 234 |
Pottery Barn | | | 197 | | | | | | | | 5 | | | | | | | | (2 | ) | | | | | | 200 |
Pottery Barn Kids | | | 89 | | | | | | | | 2 | | | | | | | | (4 | ) | | | | | | 87 |
West Elm | | | 87 | | | | | | | | 13 | | | | | | | | (2 | ) | | | | | | 98 |
Rejuvenation | | | 6 | | | | | | | | 1 | | | | | | | | - | | | | | | | 7 |
Total | | | 618 | | | | | | | | 26 | | | | | | | | (18 | ) | | | | | | 626 |
|
* Included in the FY 15 store count are 19 stores in Australia and one store in the UK. |
CONFERENCE CALL AND WEBCAST INFORMATION
Williams-Sonoma, Inc. will host a live conference call today, November 17, 2016, at 2:00 P.M. (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 athttp://ir.williams-sonomainc.com/events. A replay of the webcast will be available athttp://ir.williams-sonomainc.com/events.
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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 severance-related reorganization charges in Q1 16 and Q3 16. 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 actual results and FY 16 guidance 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 progress on our strategic initiatives; our growth drivers; our future financial guidance, including Q4 16 and FY 2016 guidance; our 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 Q3 16; 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 January 31, 2016 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.
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 635 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 and stores and e-commerce websites in Mexico.
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Earnings (unaudited)
Thirteen weeks ended October 30, 2016 and November 1, 2015
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | 3rd Quarter | |
| | | 2016 | | | 2015 | |
| | | $ | | | % of
Revenues | | | $ | | | % of
Revenues | |
E-commerce net revenues | | $ | 648,743 | | | | 52.1 | % | | $ | 628,191 | | | | 51.0 | % |
Retail net revenues | | | 596,642 | | | | 47.9 | | | | 603,891 | | | | 49.0 | |
| | | | | | | | | | | | | | | | |
Net revenues | | | 1,245,385 | | | | 100.0 | | | | 1,232,082 | | | | 100.0 | |
Cost of goods sold | | | 787,162 | | | | 63.2 | | | | 780,894 | | | | 63.4 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 458,223 | | | | 36.8 | | | | 451,188 | | | | 36.6 | |
Selling, general and administrative expenses | | | 348,244 | | | | 28.0 | | | | 340,505 | | | | 27.6 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 109,979 | | | | 8.8 | | | | 110,683 | | | | 9.0 | |
Interest (income) expense, net | | | 488 | | | | — | | | | 342 | | | | — | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 109,491 | | | | 8.8 | | | | 110,341 | | | | 9.0 | |
Income taxes | | | 40,113 | | | | 3.2 | | | | 39,859 | | | | 3.2 | |
| | | | | | | | | | | | | | | | |
Net earnings | | $ | 69,378 | | | | 5.6 | % | | $ | 70,482 | | | | 5.7 | % |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings per share (EPS): | | | | | | | | | | | | | | | | |
Basic | | $ | 0.78 | | | | | | | $ | 0.78 | | | | | |
Diluted | | $ | 0.78 | | | | | | | $ | 0.77 | | | | | |
Shares used in calculation of EPS: | | | | | | | | | | | | | | | | |
Basic | | | 88,382 | | | | | | | | 90,437 | | | | | |
Diluted | | | 89,144 | | | | | | | | 91,801 | | | | | |
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Earnings (unaudited)
Thirty-nine weeks ended October 30, 2016 and November 1, 2015
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | Year-to-Date | |
| | | 2016 | | | 2015 | |
| | | $ | | | % of
Revenues | | | $ | | | % of
Revenues | |
E-commerce net revenues | | $ | 1,824,660 | | | | 52.1 | % | | $ | 1,730,677 | | | | 51.1 | % |
Retail net revenues | | | 1,677,571 | | | | 47.9 | | | | 1,659,109 | | | | 48.9 | |
| | | | | | | | | | | | | | | | |
Net revenues | | | 3,502,231 | | | | 100.0 | | | | 3,389,786 | | | | 100.0 | |
Cost of goods sold | | | 2,240,952 | | | | 64.0 | | | | 2,153,132 | | | | 63.5 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 1,261,279 | | | | 36.0 | | | | 1,236,654 | | | | 36.5 | |
Selling, general and administrative expenses | | | 1,004,499 | | | | 28.7 | | | | 970,700 | | | | 28.6 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 256,780 | | | | 7.3 | | | | 265,954 | | | | 7.8 | |
Interest (income) expense, net | | | 587 | | | | — | | | | 625 | | | | — | |
| | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 256,193 | | | | 7.3 | | | | 265,329 | | | | 7.8 | |
Income taxes | | | 95,433 | | | | 2.7 | | | | 96,389 | | | | 2.8 | |
| | | | | | | | | | | | | | | | |
Net earnings | | $ | 160,760 | | | | 4.6 | % | | $ | 168,940 | | | | 5.0 | % |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings per share (EPS): | | | | | | | | | | | | | | | | |
Basic | | $ | 1.81 | | | | | | | $ | 1.85 | | | | | |
Diluted | | $ | 1.79 | | | | | | | $ | 1.82 | | | | | |
Shares used in calculation of EPS: | | | | | | | | | | | | | | | | |
Basic | | | 88,906 | | | | | | | | 91,129 | | | | | |
Diluted | | | 89,764 | | | | | | | | 92,576 | | | | | |
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Williams-Sonoma, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(Dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | |
| | | Oct. 30, 2016 | | | Jan. 31, 2016 | | | Nov. 1, 2015 | |
Assets | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 75,381 | | | $ | 193,647 | | | $ | 72,264 | |
Accounts receivable, net | | | 96,386 | | | | 79,304 | | | | 88,535 | |
Merchandise inventories, net | | | 1,063,747 | | | | 978,138 | | | | 1,102,349 | |
Prepaid catalog expenses | | | 25,329 | | | | 28,919 | | | | 35,762 | |
Prepaid expenses | | | 74,195 | | | | 44,654 | | | | 59,276 | |
Deferred income taxes, net | | | - | | | | - | | | | 130,684 | |
Other assets | | | 12,176 | | | | 11,438 | | | | 12,966 | |
| | | | | | | | | | | | |
Total current assets | | | 1,347,214 | | | | 1,336,100 | | | | 1,501,836 | |
| | | | | | | | | | | | |
Property and equipment, net | | | 918,020 | | | | 886,813 | | | | 883,459 | |
Non-current deferred income taxes, net | | | 136,558 | | | | 141,784 | | | | 2,560 | |
Other assets, net | | | 51,540 | | | | 52,730 | | | | 47,821 | |
| | | | | | | | | | | | |
Total assets | | $ | 2,453,332 | | | $ | 2,417,427 | | | $ | 2,435,676 | |
| | | | | | | | | | | | |
| | | |
Liabilities and stockholders’ equity | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | |
Accounts payable | | $ | 450,144 | | | $ | 447,412 | | | $ | 395,033 | |
Accrued salaries, benefits and other | | | 111,445 | | | | 127,122 | | | | 115,720 | |
Customer deposits | | | 289,737 | | | | 296,827 | | | | 293,317 | |
Borrowings under revolving line of credit | | | 125,000 | | | | - | | | | 200,000 | |
Income taxes payable | | | 1,122 | | | | 67,052 | | | | 35,317 | |
Other liabilities | | | 53,423 | | | | 58,014 | | | | 55,152 | |
| | | | | | | | | | | | |
Total current liabilities | | | 1,030,871 | | | | 996,427 | | | | 1,094,539 | |
| | | | | | | | | | | | |
Deferred rent and lease incentives | | | 192,948 | | | | 173,061 | | | | 174,059 | |
Other long-term obligations | | | 70,031 | | | | 49,713 | | | | 50,545 | |
| | | | | | | | | | | | |
Total liabilities | | | 1,293,850 | | | | 1,219,201 | | | | 1,319,143 | |
| | | | | | | | | | | | |
| | | |
Stockholders’ equity | | | | | | | | | | | | |
Preferred stock: $.01 par value; 7,500 shares authorized; none issued | | | - | | | | - | | | | - | |
Common stock: $.01 par value; 253,125 shares authorized; 88,014, 89,563 and 90,010 shares issued and outstanding at October 30, 2016, January 31, 2016 and November 1, 2015, respectively | | | 881 | | | | 896 | | | | 901 | |
Additional paid-in capital | | | 547,513 | | | | 541,307 | | | | 538,737 | |
Retained earnings | | | 623,243 | | | | 668,545 | | | | 585,928 | |
Accumulated other comprehensive loss | | | (10,772 | ) | | | (10,616 | ) | | | (7,127 | ) |
Treasury stock, at cost | | | (1,383 | ) | | | (1,906 | ) | | | (1,906 | ) |
| | | | | | | | | | | | |
Total stockholders’ equity | | | 1,159,482 | | | | 1,198,226 | | | | 1,116,533 | |
| | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 2,453,332 | | | $ | 2,417,427 | | | $ | 2,435,676 | |
| | | | | | | | | | | | |
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Williams-Sonoma, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
Thirty-nine weeks ended October 30, 2016 and November 1, 2015
(Dollars in thousands)
| | | | | | | | |
| | | Year-to-Date | |
| | | 2016 | | | 2015 | |
Cash flows from operating activities | | | | | | | | |
Net earnings | | $ | 160,760 | | | $ | 168,940 | |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | | | | | | | | |
Depreciation and amortization | | | 127,745 | | | | 125,093 | |
Loss on disposal/impairment of assets | | | 1,852 | | | | 3,558 | |
Amortization of deferred lease incentives | | | (18,789 | ) | | | (18,326 | ) |
Deferred income taxes | | | (14,461 | ) | | | (13,526 | ) |
Tax benefit related to stock-based awards | | | 23,571 | | | | 29,603 | |
Excess tax benefit related to stock-based awards | | | (4,817 | ) | | | (14,283 | ) |
Stock-based compensation expense | | | 37,975 | | | | 36,182 | |
Other | | | (647 | ) | | | 91 | |
Changes in: | | | | | | | | |
Accounts receivable | | | (17,400 | ) | | | (21,875 | ) |
Merchandise inventories | | | (82,410 | ) | | | (216,294 | ) |
Prepaid catalog expenses | | | 3,591 | | | | (1,820 | ) |
Prepaid expenses and other assets | | | (29,205 | ) | | | (20,909 | ) |
Accounts payable | | | (17,403 | ) | | | (10,179 | ) |
Accrued salaries, benefits and other current and long-term liabilities | | | (507 | ) | | | (13,494 | ) |
Customer deposits | | | (7,445 | ) | | | 32,016 | |
Deferred rent and lease incentives | | | 25,969 | | | | 25,561 | |
Income taxes payable | | | (65,915 | ) | | | 2,707 | |
| | | | | | | | |
Net cash provided by operating activities | | | 122,464 | | | | 93,045 | |
| | | | | | | | |
| | |
Cash flows from investing activities: | | | | | | | | |
Purchases of property and equipment | | | (127,169 | ) | | | (136,069 | ) |
Other | | | 370 | | | | 535 | |
| | | | | | | | |
Net cash used in investing activities | | | (126,799 | ) | | | (135,534 | ) |
| | | | | | | | |
| | |
Cash flows from financing activities: | | | | | | | | |
Borrowings under revolving line of credit | | | 125,000 | | | | 200,000 | |
Repurchase of common stock | | | (115,167 | ) | | | (196,497 | ) |
Payment of dividends | | | (100,854 | ) | | | (96,020 | ) |
Tax withholdings related to stock-based awards | | | (26,518 | ) | | | (31,019 | ) |
Excess tax benefit related to stock-based awards | | | 4,817 | | | | 14,283 | |
Net proceeds related to stock-based awards | | | 1,532 | | | | 2,647 | |
Repayment of long-term obligations | | | - | | | | (1,968 | ) |
Other | | | (48 | ) | | | - | |
| | | | | | | | |
Net cash used in financing activities | | | (111,238 | ) | | | (108,574 | ) |
| | | | | | | | |
| | |
Effect of exchange rates on cash and cash equivalents | | | (2,693 | ) | | | 400 | |
Net decrease in cash and cash equivalents | | | (118,266 | ) | | | (150,663 | ) |
Cash and cash equivalents at beginning of period | | | 193,647 | | | | 222,927 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 75,381 | | | $ | 72,264 | |
| | | | | | | | |
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Exhibit 1
3rd Quarter Operating Margin By Segment*
($ in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | E-commerce | | | Retail | | | Unallocated | | | Total | |
| | | Q3 16 | | | Q3 15 | | | Q3 16 | | | Q3 15 | | | Q3 16 | | | Q3 15 | | | Q3 16 | | | Q3 15 | |
Net Revenues | | $ | 648,743 | | | $ | 628,191 | | | $ | 596,642 | | | $ | 603,891 | | | $ | - | | | $ | - | | | $ | 1,245,385 | | | $ | 1,232,082 | |
GAAP Operating Income/(Expense) | | | 150,164 | | | | 137,828 | | | | 47,080 | | | | 49,213 | | | | (87,265) | | | | (76,358) | | | | 109,979 | | | | 110,683 | |
GAAP Operating Margin | | | 23.1% | | | | 21.9% | | | | 7.9% | | | | 8.1% | | | | (7.0%) | | | | (6.2%) | | | | 8.8% | | | | 9.0% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Unusual Business Events (1) | | | - | | | | - | | | | - | | | | - | | | | 1,185 | | | | - | | | | 1,185 | | | | - | |
Non-GAAP Operating Income/ (Expense) Excluding Unusual Business Events(2) | | $ | 150,164 | | | $ | 137,828 | | | $ | 47,080 | | | $ | 49,213 | | | $ | (86,080) | | | $ | (76,358) | | | $ | 111,164 | | | $ | 110,683 | |
Non-GAAP Operating Margin(2) | | | 23.1% | | | | 21.9% | | | | 7.9% | | | | 8.1% | | | | (6.9%) | | | | (6.2%) | | | | 8.9% | | | | 9.0% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | * | 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 GAAP to Non-GAAP
Diluted Earnings Per Share**
(Totals rounded to the nearest cent per diluted share)
| | | | | | | | | | | | | | | | | | |
| | | Q1 16 ACT | | | | Q2 16 ACT | | | | Q3 16 ACT | | | | Q4 16 GUID | | | | FY 16 GUID |
2016 GAAP Diluted EPS | | $0.44 | | | | $0.58 | | | | $0.78 | | | | $1.45 - $1.55 | | | | $3.25 - $3.35 |
Impact of Unusual Business Events(1) | | $0.09 | | | | - | | | | $0.01 | | | | - | | | | $0.10 |
| 2016 Non-GAAP Diluted EPS Excluding Unusual Business Events (2) | | $0.53 | | | | $0.58 | | | | $0.79 | | | | $1.45 - $1.55 | | | | $3.35 - $3.45 |
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| | | Q1 15 ACT | | | | Q2 15 ACT | | | | Q3 15 ACT | | | | Q4 15 ACT | | | | FY 15 ACT |
| 2015 GAAP Diluted EPS | | $0.48 | | | | $0.58 | | | | $0.77 | | | | $1.55 | | | | $3.37 |
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| | ** | 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. |
Store Statistics
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Store Count | | | | | | Avg. Leased Square
Footage Per Store | |
| | | Jul. 31, 2016 | | | Openings | | | Closings | | | Oct. 30, 2016 | | | Nov. 1, 2015 | | | | | | Oct. 30, 2016 | | | Nov. 1, 2015 | |
Williams-Sonoma | | | 241 | | | | 1 | | | | (1 | ) | | | 241 | | | | 243 | | | | | | | | 6,600 | | | | 6,600 | |
Pottery Barn | | | 201 | | | | 1 | | | | - | | | | 202 | | | | 200 | | | | | | | | 13,800 | | | | 13,700 | |
Pottery Barn Kids | | | 89 | | | | - | | | | - | | | | 89 | | | | 90 | | | | | | | | 7,500 | | | | 7,500 | |
West Elm | | | 89 | | | | 10 | | | | (2 | ) | | | 97 | | | | 84 | | | | | | | | 13,300 | | | | 13,400 | |
Rejuvenation | | | 6 | | | | - | | | | - | | | | 6 | | | | 6 | | | | | | | | 9,300 | | | | 9,000 | |
Total | | | 626 | | | | 12 | | | | (3 | ) | | | 635 | | | | 623 | | | | | | | | 10,000 | | | | 9,900 | |
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| | | | | Jul. 31, 2016 | | | | | | Oct. 30, 2016 | | | | | | Nov. 1, 2015 | |
| Total store selling square footage | | | | | 3,894,000 | | | | | | | | 3,966,000 | | | | | | | | 3,839,000 | |
| Total store leased square footage | | | | | 6,262,000 | | | | | | | | 6,381,000 | | | | | | | | 6,188,000 | |
Notes:
| | (1) | Impact of Unusual Business Events – During Q1 16 and Q3 16, we incurred severance-related reorganization charges due to headcount reduction primarily in our corporate functions totaling approximately $14 million, or $0.10 per diluted share. These charges were recorded as SG&A expense within the unallocated segment. |
| | (2) | 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 actual results and FY 16 guidance 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. |
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