Cover Page
Cover Page - shares | 3 Months Ended | |
May 01, 2022 | May 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | May 1, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-14077 | |
Entity Registrant Name | WILLIAMS-SONOMA, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-2203880 | |
Entity Address, Address Line One | 3250 Van Ness Avenue | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94109 | |
City Area Code | 415 | |
Local Phone Number | 421-7900 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | WSM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 68,763,017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000719955 | |
Current Fiscal Year End Date | --01-29 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Income Statement [Abstract] | ||
Net revenues | $ 1,891,227 | $ 1,749,029 |
Cost of goods sold | 1,062,679 | 996,176 |
Gross profit | 828,548 | 752,853 |
Selling, general and administrative expenses | 505,067 | 477,676 |
Operating income | 323,481 | 275,177 |
Interest (income) expense, net | (163) | 1,872 |
Earnings before income taxes | 323,644 | 273,305 |
Income taxes | 69,531 | 45,503 |
Net earnings | $ 254,113 | $ 227,802 |
Basic earnings per share (in USD per share) | $ 3.59 | $ 3.01 |
Diluted earnings per share (in USD per share) | $ 3.50 | $ 2.90 |
Shares used in calculation of earnings per share: | ||
Basic (in shares) | 70,851 | 75,800 |
Diluted (in shares) | 72,652 | 78,485 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 254,113 | $ 227,802 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (1,514) | 3,700 |
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $33 and $(241) | 93 | (665) |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax (tax benefit) of $6 and $(55) | (18) | 153 |
Comprehensive income | $ 252,674 | $ 230,990 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Change in fair value of derivative financial instruments, tax | $ 33 | $ (241) |
Reclassification adjustment for realized (gain) loss on derivative financial instruments, tax | $ 6 | $ (55) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 01, 2022 | Jan. 30, 2022 | May 02, 2021 |
Current assets | |||
Cash and cash equivalents | $ 324,835 | $ 850,338 | $ 639,670 |
Accounts receivable, net | 122,946 | 131,683 | 142,459 |
Merchandise inventories, net | 1,396,135 | 1,246,372 | 1,087,528 |
Prepaid expenses | 60,997 | 69,252 | 58,837 |
Other current assets | 23,939 | 26,249 | 20,502 |
Total current assets | 1,928,852 | 2,323,894 | 1,948,996 |
Property and equipment, net | 942,460 | 920,773 | 875,384 |
Operating lease right-of-use assets | 1,102,056 | 1,132,764 | 1,054,746 |
Deferred income taxes, net | 48,737 | 56,585 | 57,499 |
Goodwill | 85,298 | 85,354 | 85,435 |
Other long-term assets, net | 103,310 | 106,250 | 88,180 |
Total assets | 4,210,713 | 4,625,620 | 4,110,240 |
Current liabilities | |||
Accounts payable | 642,619 | 612,512 | 574,876 |
Accrued expenses | 183,729 | 319,924 | 174,139 |
Gift card and other deferred revenue | 490,821 | 447,770 | 389,640 |
Income taxes payable | 126,270 | 79,554 | 93,282 |
Operating lease liabilities | 211,614 | 217,409 | 208,739 |
Other current liabilities | 88,587 | 94,517 | 78,597 |
Total current liabilities | 1,743,640 | 1,771,686 | 1,519,273 |
Deferred lease incentives | 15,576 | 16,360 | 19,505 |
Long-term operating lease liabilities | 1,038,249 | 1,066,839 | 999,288 |
Other long-term liabilities | 103,504 | 106,528 | 124,878 |
Total liabilities | 2,900,969 | 2,961,413 | 2,662,944 |
Stockholders’ equity | |||
Preferred stock: $0.01 par value; 7,500 shares authorized; none issued | 0 | 0 | 0 |
Common stock: $0.01 par value; 253,125 shares authorized; 69,219, 71,982 and 75,235 shares issued and outstanding at May 1, 2022, January 30, 2022 and May 2, 2021, respectively | 693 | 720 | 753 |
Additional paid-in capital | 532,205 | 600,942 | 556,305 |
Retained earnings | 789,852 | 1,074,084 | 894,878 |
Accumulated other comprehensive loss | (12,267) | (10,828) | (3,929) |
Treasury stock, at cost: 1, 4 and 4 shares as of May 1, 2022, January 30, 2022 and May 2, 2021, respectively | (739) | (711) | (711) |
Total stockholders’ equity | 1,309,744 | 1,664,207 | 1,447,296 |
Total liabilities and stockholders’ equity | $ 4,210,713 | $ 4,625,620 | $ 4,110,240 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | May 01, 2022 | Jan. 30, 2022 | May 02, 2021 |
Stockholders’ equity | |||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 7,500,000 | 7,500,000 | 7,500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 253,125,000 | 253,125,000 | 253,125,000 |
Common stock, shares issued (in shares) | 69,219,000 | 71,982,000 | 75,235,000 |
Common stock, shares outstanding (in shares) | 69,219,000 | 71,982,000 | 75,235,000 |
Treasury stock (in shares) | 1,000 | 4,000 | 4,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |
Beginning Balance (in shares) at Jan. 31, 2021 | 76,340,000 | ||||||
Beginning Balance at Jan. 31, 2021 | $ 1,651,185 | $ 764 | $ 638,375 | $ 1,019,762 | $ (7,117) | $ (599) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 227,802 | 227,802 | |||||
Foreign currency translation adjustments | 3,700 | 3,700 | |||||
Change in fair value of derivative financial instruments, net of tax | (665) | (665) | |||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | 153 | 153 | |||||
Conversion/release of stock-based awards (in shares) | [1] | 686,000 | |||||
Conversion/release of stock-based awards | [1] | (98,451) | $ 7 | (97,958) | (500) | ||
Repurchases of common stock (in shares) | (1,791,000) | ||||||
Repurchases of common stock | (315,529) | $ (18) | (9,239) | (306,272) | |||
Reissuance of treasury stock under stock-based compensation plans | [1] | 0 | (344) | (44) | 388 | ||
Stock-based compensation expense | 25,471 | 25,471 | |||||
Dividends declared | (46,370) | (46,370) | |||||
Ending Balance (in shares) at May. 02, 2021 | 75,235,000 | ||||||
Ending Balance at May. 02, 2021 | 1,447,296 | $ 753 | 556,305 | 894,878 | (3,929) | (711) | |
Beginning Balance (in shares) at Jan. 30, 2022 | 71,982,000 | ||||||
Beginning Balance at Jan. 30, 2022 | 1,664,207 | $ 720 | 600,942 | 1,074,084 | (10,828) | (711) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 254,113 | 254,113 | |||||
Foreign currency translation adjustments | (1,514) | (1,514) | |||||
Change in fair value of derivative financial instruments, net of tax | 93 | 93 | |||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | (18) | (18) | |||||
Conversion/release of stock-based awards (in shares) | [1] | 617,000 | |||||
Conversion/release of stock-based awards | [1] | (78,508) | $ 6 | (78,142) | (372) | ||
Repurchases of common stock (in shares) | (3,380,000) | ||||||
Repurchases of common stock | (501,075) | $ (33) | (18,590) | (482,452) | |||
Reissuance of treasury stock under stock-based compensation plans | [1] | 0 | (344) | 344 | |||
Stock-based compensation expense | 28,339 | 28,339 | |||||
Dividends declared | (55,893) | (55,893) | |||||
Ending Balance (in shares) at May. 01, 2022 | 69,219,000 | ||||||
Ending Balance at May. 01, 2022 | $ 1,309,744 | $ 693 | $ 532,205 | $ 789,852 | $ (12,267) | $ (739) | |
[1] | Amounts are shown net of shares withheld for employee taxes. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Cash flows from operating activities: | ||
Net earnings | $ 254,113 | $ 227,802 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 50,251 | 47,922 |
Loss on disposal/impairment of assets | 159 | 195 |
Amortization of deferred lease incentives | (784) | (1,108) |
Non-cash lease expense | 54,338 | 52,955 |
Deferred income taxes | (2,725) | (3,981) |
Tax benefit related to stock-based awards | 10,522 | 10,146 |
Stock-based compensation expense | 28,542 | 26,330 |
Other | (17) | (223) |
Changes in: | ||
Accounts receivable | 8,741 | 1,522 |
Merchandise inventories | (149,470) | (79,726) |
Prepaid expenses and other assets | 13,517 | 34,562 |
Accounts payable | 25,559 | 27,910 |
Accrued expenses and other liabilities | (139,883) | (90,883) |
Gift card and other deferred revenue | 42,924 | 16,174 |
Operating lease liabilities | (58,025) | (53,633) |
Income taxes payable | 46,757 | 22,917 |
Net cash provided by operating activities | 184,519 | 238,881 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (71,186) | (42,360) |
Other | 86 | 93 |
Net cash used in investing activities | (71,100) | (42,267) |
Cash flows from financing activities: | ||
Repurchases of common stock | (501,075) | (315,529) |
Tax withholdings related to stock-based awards | (78,508) | (98,451) |
Payment of dividends | (58,150) | (45,576) |
Repayment of long-term debt | 0 | (300,000) |
Net cash used in financing activities | (637,733) | (759,556) |
Effect of exchange rates on cash and cash equivalents | (1,189) | 2,275 |
Net decrease in cash and cash equivalents | (525,503) | (560,667) |
Cash and cash equivalents at beginning of period | 850,338 | 1,200,337 |
Cash and cash equivalents at end of period | $ 324,835 | $ 639,670 |
FINANCIAL STATEMENTS - BASIS OF
FINANCIAL STATEMENTS - BASIS OF PRESENTATION | 3 Months Ended |
May 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
FINANCIAL STATEMENTS - BASIS OF PRESENTATION | FINANCIAL STATEMENTS - BASIS OF PRESENTATION These financial statements include Williams-Sonoma, Inc. and its wholly owned subsidiaries (“we,” “us” or “our”). The Condensed Consolidated Balance Sheets as of May 1, 2022 and May 2, 2021, the Condensed Consolidated Statements of Earnings, the Condensed Consolidated Statements of Comprehensive Income, the Condensed Consolidated Statements of Stockholders’ Equity and the Condensed Consolidated Statements of Cash Flows for the thirteen weeks then ended, have been prepared by us, and have not been audited. In our opinion, the financial statements include all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen weeks then ended. Intercompany transactions and accounts have been eliminated in our consolidation. The balance sheet as of January 31, 2021, presented herein, has been derived from our audited Consolidated Balance Sheet included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2021. The results of operations for the thirteen weeks ended May 1, 2022 are not necessarily indicative of the operating results of the full year. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. These financial statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2022. During fiscal 2021 and continuing into the first quarter of fiscal 2022, global supply chain disruptions, including COVID-19 related factory closures and increased port congestion, caused delays in inventory receipts, increased raw material costs, and higher shipping-related charges. We expect these supply chain challenges to continue into the remainder of fiscal 2022, which could negatively impact our business. New Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The ASU is intended to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance provides optional expedients and scope exceptions for transactions if certain criteria are met. These transactions include contract modifications, hedge accounting, and the sale or transfer of debt securities classified as held-to-maturity. We may elect to apply the provisions of the new standard prospectively through December 31, 2022. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. We have yet to elect an adoption date, but do not believe the adoption would have a material impact on our financial condition, results of operations or cash flows. |
BORROWING ARRANGEMENTS
BORROWING ARRANGEMENTS | 3 Months Ended |
May 01, 2022 | |
Debt Disclosure [Abstract] | |
BORROWING ARRANGEMENTS | BORROWING ARRANGEMENTS Credit Facility We have a credit facility (the "Credit Facility") which provides for a $500 million unsecured revolving line of credit (the “Revolver”). Our Revolver may be used to borrow revolving loans or request the issuance of letters of credit. We may, upon notice to the administrative agent, request existing or new lenders, at such lenders’ option, to increase the Revolver by up to $250 million to provide for a total of $750 million of unsecured revolving credit. During the first quarter of fiscal 2022, we had no borrowings under our Revolver. Additionally, as of May 1, 2022, issued but undrawn standby letters of credit of $11.4 million were outstanding under our Revolver. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs. We had no borrowings under our Revolver during the first quarter of fiscal 2021. Our Revolver matures on September 30, 2026, at which time all outstanding borrowings must be repaid and all outstanding letters of credit must be cash collateralized. We may elect to extend the maturity date, subject to lender approval. The interest rate applicable to our Revolver is variable and may be elected by us as: (i) the LIBOR (or future alternative rate) plus an applicable margin based on our leverage ratio ranging from 0.91% to 1.775% or (ii) a base rate as defined in our Credit Facility, plus an applicable margin based on our leverage ratio ranging from 0% to 0.775%. Our Credit Facility contains certain restrictive loan covenants, including, among others, a financial covenant requiring a maximum leverage ratio (funded debt adjusted for operating lease liabilities to earnings before interest, income tax, depreciation, amortization and rent expense), and covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of assets. As of May 1, 2022, we were in compliance with our financial covenants under our Credit Facility and, based on current projections, we expect to remain in compliance throughout the next 12 months. Letter of Credit Facilities We have three unsecured letter of credit reimbursement facilities for a total of $35 million. Our letter of credit facilities contain covenants that are consistent with our Credit Facility. Interest on unreimbursed amounts under our letter of credit facilities accrues at a base rate as defined in our Credit Facility, plus an applicable margin based on our leverage ratio. As of May 1, 2022, the aggregate amount outstanding under our letter of credit facilities was $6.5 million, which represents only a future commitment to fund inventory purchases to which we had not taken legal title. The latest expiration date possible for any future letters of credit issued under the facilities is January 19, 2023. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
May 01, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Award Programs Our Amended and Restated 2001 Long-Term Incentive Plan (the “Plan”) provides for grants of incentive stock options, nonqualified stock options, stock-settled stock appreciation rights, restricted stock awards, restricted stock units (including those that are performance-based), deferred stock awards (collectively, “stock awards”) and dividend equivalents up to an aggregate of 42.7 million shares. As of May 1, 2022, there were approximately 6.1 million shares available for future grant. Awards may be granted under our Plan to officers, employees and non-employee members of the Board of Directors of the Company (the “Board”) or any parent or subsidiary. Shares issued as a result of award exercises or releases are primarily funded with the issuance of new shares. Stock Awards Annual grants of stock awards are limited to 1 million shares on a per person basis. Stock awards granted to employees generally vest evenly over a period of four years for service-based awards. Certain performance-based awards, which have variable payout conditions based on predetermined financial targets, generally vest three years from the date of grant. Certain stock awards and other agreements contain vesting acceleration clauses resulting from events including, but not limited to, retirement, disability, death, merger or a similar corporate event. Stock awards granted to non-employee Board members generally vest in one year. Non-employee Board members automatically receive stock awards on the date of their initial election to the Board and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-employee Board member). Non-employee directors may also elect, on terms prescribed by the Company, to receive all of their annual cash compensation to be earned in respect of the applicable fiscal year (or the last two quarters thereof in the case of fiscal 2021) either in the form of (i) fully vested stock units or (ii) fully vested deferred stock units. Stock-Based Compensation Expense During the thirteen weeks ended May 1, 2022 and May 2, 2021, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses of $28.5 million and $26.3 million, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
May 01, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed as net earnings divided by the weighted average number of common shares outstanding and common stock equivalents outstanding for the period. Common stock equivalents consist of shares subject to stock-based awards to the extent their inclusion would be dilutive. The following is a reconciliation of net earnings and the number of shares used in the basic and diluted earnings per share computations: (In thousands, except per share amounts) Net Earnings Weighted Earnings Thirteen weeks ended May 1, 2022 Basic $ 254,113 70,851 $ 3.59 Effect of dilutive stock-based awards 1,801 Diluted $ 254,113 72,652 $ 3.50 Thirteen weeks ended May 2, 2021 Basic $ 227,802 75,800 $ 3.01 Effect of dilutive stock-based awards 2,685 Diluted $ 227,802 78,485 $ 2.90 The effect of anti-dilutive stock-based awards was not material for the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
May 01, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING We identify our operating segments according to how our business activities are managed and evaluated. Each of our brands are operating segments. Because they share similar economic and other qualitative characteristics, we have aggregated our operating segments into a single reportable segment. The following table summarizes our net revenues by brand for the thirteen weeks ended May 1, 2022 and May 2, 2021. For the Thirteen Weeks Ended (In thousands) May 1, 2022 May 2, 2021 Pottery Barn $ 774,646 $ 679,055 West Elm 536,293 477,317 Williams Sonoma 252,220 265,607 Pottery Barn Kids and Teen 226,969 236,067 Other 1 101,099 90,983 Total 2 $ 1,891,227 $ 1,749,029 1 Primarily consists of net revenues from Rejuvenation, our international franchise operations and Mark and Graham. 2 Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $95.0 million and $99.9 million for the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively. Long-lived assets by geographic location are as follows: As of (In thousands) May 1, 2022 1 May 2, 2021 1 U.S. $ 2,146,474 $ 2,012,572 International 135,387 148,672 Total $ 2,281,861 $ 2,161,244 1 Includes total goodwill, deferred tax assets and intangibles of $144.3 million and $154.3 million for the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively, of which $132.0 million and $142.1 million, respectively, is related to the U.S. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
May 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESWe are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. These disputes, which are not currently material, are increasing in number as our business expands and our company grows. We review the need for any loss contingency reserves and establish reserves when, in the opinion of management, it is probable that a matter would result in liability, and the amount of loss, if any, can be reasonably estimated. In view of the inherent difficulty of predicting the outcome of these matters, it may not be possible to determine whether any loss is probable or to reasonably estimate the amount of the loss until the case is close to resolution, in which case no reserve is established until that time. Any claims against us, whether meritorious or not, could result in costly litigation, require significant amounts of management time and result in the diversion of significant operational resources. The results of these lawsuits, claims and proceedings cannot be predicted with certainty. However, we believe that the ultimate resolution of these current matters will not have a material adverse effect on our Condensed Consolidated Financial Statements taken as a whole. |
STOCK REPURCHASE PROGRAM AND DI
STOCK REPURCHASE PROGRAM AND DIVIDENDS | 3 Months Ended |
May 01, 2022 | |
Equity [Abstract] | |
STOCK REPURCHASE PROGRAM AND DIVIDENDS | STOCK REPURCHASE PROGRAM AND DIVIDENDS Stock Repurchase Program In March 2022, our Board authorized a new stock repurchase program for $1.5 billion, which replaced our existing program. During the thirteen weeks ended May 1, 2022, we repurchased 3,379,731 shares of our common stock at an average cost of $148.26 per share for a total cost of $501.1 million under our prior and new stock repurchase programs. As of May 1, 2022, there was $1.1 billion remaining under our current stock repurchase program. During the thirteen weeks ended May 2, 2021, we repurchased 1,790,725 shares of our common stock at an average cost of $176.20 per share for a total cost of $315.5 million. Stock repurchased by the Company is typically cancelled after purchasing. However, we hold some shares in treasury to satisfy future stock-based award settlements in certain foreign jurisdictions. We held treasury stock of $0.7 million as of May 1, 2022 and May 2, 2021. Stock repurchases under our program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability and other market conditions. Dividends In March 2022, our Board authorized a 10% increase in our quarterly cash dividend, from $0.71 to $0.78 per common share, subject to capital availability. We declared cash dividends of $0.78 and $0.59 per common share during the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively. Our quarterly cash dividend may be limited or terminated at any time. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
May 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We have retail and e-commerce businesses in Canada, Australia and the United Kingdom, and operations throughout Asia and Europe, which expose us to market risk associated with foreign currency exchange rate fluctuations. Substantially all of our purchases and sales are denominated in U.S. dollars, which limits our exposure to this risk. However, some of our foreign operations have a functional currency other than the U.S. dollar. To mitigate this risk, we hedge a portion of our foreign currency exposure with foreign currency forward contracts in accordance with our risk management policies. We do not enter into such contracts for speculative purposes. The assets or liabilities associated with the derivative financial instruments are measured at fair value and recorded in either other current assets or other current liabilities. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on whether the derivative financial instrument is designated as a hedge and qualifies for hedge accounting in accordance with the ASC 815, Derivatives and Hedging . Cash Flow Hedges We enter into foreign currency forward contracts designated as cash flow hedges (to sell Canadian dollars and purchase U.S. dollars) for forecasted inventory purchases in U.S. dollars by our Canadian subsidiary. These hedges have terms of up to 12 months. All hedging relationships are formally documented, and the forward contracts are designed to mitigate foreign currency exchange risk on hedged transactions. We record the effective portion of changes in the fair value of our cash flow hedges in other comprehensive income (“OCI”) until the earlier of when the hedged forecasted inventory purchase occurs or the respective contract reaches maturity. Subsequently, as the inventory is sold to the customer, we reclassify amounts previously recorded in OCI to cost of goods sold. Changes in the fair value of the forward contract related to interest charges (or forward points) are excluded from the assessment and measurement of hedge effectiveness and are recorded in cost of goods sold. Based on the rates in effect as of May 1, 2022, our reclassification of pre-tax gains or losses from OCI to cost of goods sold over the next 12 months is not material. As of May 1, 2022 and May 2, 2021, we had foreign currency forward contracts outstanding (in U.S. dollars) with notional values as follows: As of (In thousands) May 1, 2022 May 2, 2021 Contracts designated as cash flow hedges $ 17,500 $ 18,000 Hedge effectiveness is evaluated prospectively at inception, on an ongoing basis, as well as retrospectively using regression analysis. Any measurable ineffectiveness of the hedge is recorded in selling, general and administrative expenses. No gain or loss was recognized for cash flow hedges due to hedge ineffectiveness and all hedges were deemed effective for assessment purposes for the thirteen weeks ended May 1, 2022 and May 2, 2021. The effect of derivative instruments in our Condensed Consolidated Financial Statements from gains or losses recognized in income was not material for the thirteen weeks ended May 1, 2022 and May 2, 2021. The fair values of our derivative financial instruments are presented in other current assets and/or other current liabilities in our Condensed Consolidated Balance Sheets. All fair values were measured using Level 2 inputs as defined by the fair value hierarchy described in Note I. We record all derivative assets and liabilities on a gross basis. They do not meet the balance sheet netting criteria as discussed in ASC 210, Balance Sheet , because we do not have master netting agreements established with our derivative counterparties that would allow for net settlement. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
May 01, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy established by ASC 820, Fair Value Measurement , which defines three levels of inputs that may be used to measure fair value, as follows: • Level 1: inputs which include quoted prices in active markets for identical assets or liabilities; • Level 2: inputs which include observable inputs other than Level 1 inputs, such as quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and • Level 3: inputs which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. The fair values of our cash and cash equivalents are based on Level 1 inputs, which include quoted prices in active markets for identical assets. Foreign Currency Derivatives and Hedging Instruments We use the income approach to value our derivatives using observable Level 2 market data at the measurement date and standard valuation techniques to convert future amounts to a single present value amount, assuming that participants are motivated but not compelled to transact. Level 2 inputs are limited to quoted prices that are observable for the assets and liabilities, which include interest rates and credit risk ratings. We use mid-market pricing as a practical expedient for fair value measurements. Key inputs for foreign currency derivatives are the spot rates, forward rates, interest rates and credit derivative market rates. The counterparties associated with our foreign currency forward contracts are large credit-worthy financial institutions, and the derivatives transacted with these entities are relatively short in duration, therefore, we do not consider counterparty concentration and non-performance to be material risks at this time. Both we and our counterparties are expected to perform under the contractual terms of the instruments. None of the derivative contracts we entered into are subject to credit risk-related contingent features or collateral requirements. Long-lived Assets We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We measure property and equipment at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. We measure right-of-use assets on a nonrecurring basis using Level 2 inputs that are corroborated by market data. Where Level 2 inputs are not readily available, we use Level 3 inputs. Fair value of these long-lived assets is based on the present value of estimated future cash flows using a discount rate commensurate with the risk. The significant unobservable inputs used in the fair value measurement of our store assets are sales growth/decline, gross margin, employment costs, lease escalations, market rental rates, changes in local real estate markets in which we operate, inflation and the overall economics of the retail industry. Significant fluctuations in any of these inputs individually could significantly impact our measurement of fair value. There were no transfers in and out of Level 3 categories during the thirteen weeks ended May 1, 2022 or May 2, 2021. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
May 01, 2022 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows: (In thousands) Foreign Currency Cash Flow Accumulated Other Balance at January 30, 2022 $ (10,886) $ 58 $ (10,828) Foreign currency translation adjustments (1,514) — (1,514) Change in fair value of derivative financial instruments — 93 93 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — (18) (18) Other comprehensive income (loss) (1,514) 75 (1,439) Balance at May 1, 2022 $ (12,400) $ 133 $ (12,267) Balance at January 31, 2021 $ (6,398) $ (719) $ (7,117) Foreign currency translation adjustments 3,700 — 3,700 Change in fair value of derivative financial instruments — (665) (665) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 153 153 Other comprehensive income (loss) 3,700 (512) 3,188 Balance at May 2, 2021 $ (2,698) $ (1,231) $ (3,929) |
REVENUE
REVENUE | 3 Months Ended |
May 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Merchandise Sales The majority of our revenues are generated from sales of merchandise to our customers through our e-commerce websites, at our retail stores and through our direct mail catalogs, and include shipping fees received from customers for delivery of merchandise to their homes. The remainder of our revenues are primarily generated from sales to our franchisees and wholesale transactions, incentives received from credit card issuers in connection with our private label and co-branded credit cards and breakage income related to stored-value cards. Revenues from sales of merchandise are recognized at a point in time when control of merchandise is transferred to the customer. Merchandise can either be picked up in our stores or delivered to the customer. For merchandise picked up in the store, control is transferred at the time of the sale to the customer. For merchandise delivered to the customer, control is transferred either when delivery has been completed, or when we have a present right to payment which, for certain merchandise, occurs upon conveyance of the merchandise to the carrier for delivery. We exclude from revenue any taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and are concurrent with revenue-generating activities. Our payment terms are primarily at the point of sale for merchandise sales and for most services. We have elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Revenue from the sale of merchandise is reported net of sales returns. We estimate future returns based on historical return trends together with current product sales performance. As of May 1, 2022 and May 2, 2021, we recorded a liability for expected sales returns of approximately $40.8 million and $34.3 million, respectively, within other current liabilities and a corresponding asset for the expected net realizable value of the merchandise inventory to be returned of approximately $12.1 million and $10.2 million, respectively, within other current assets in our Condensed Consolidated Balance Sheet. See Note E for the disclosure of our net revenues by operating segment. Gift Card and Other Deferred Revenue We defer revenue and record a liability when cash payments are received in advance of satisfying performance obligations, primarily associated with our merchandise sales, stored-value cards, customer loyalty programs, and incentives received from credit card issuers. We issue stored-value cards that may be redeemed on future merchandise purchases. Our stored-value cards have no expiration dates. Revenue from stored-value cards is recognized at a point in time upon redemption of the card and as control of the merchandise is transferred to the customer. Revenue from estimated unredeemed stored-value cards (“breakage”) is recognized in a manner consistent with our historical redemption patterns over the estimated period of redemption of our cards of approximately four years, the majority of which is recognized within one year of the card issuance. Breakage revenue is not material to our Condensed Consolidated Financial Statements. We have customer loyalty programs, which allow members to earn points for each qualifying purchase. Points earned enable members to receive certificates that may be redeemed on future merchandise purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points or certificates earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Condensed Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be issued and redeemed, based on historical patterns. This measurement is applied to our portfolio of performance obligations for points or certificates earned, as all obligations have similar economic characteristics. We believe the impact to our Condensed Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within six months from issuance. We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards, whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. Services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term. As of May 1, 2022 and May 2, 2021, we had recorded $494.3 million and $392.8 million, respectively, for gift card and other deferred revenue in our Condensed Consolidated Balance Sheets, substantially all of which is expected to be recognized into revenue within the next 12 months. |
FINANCIAL STATEMENTS - BASIS _2
FINANCIAL STATEMENTS - BASIS OF PRESENTATION (Policies) | 3 Months Ended |
May 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The ASU is intended to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance provides optional expedients and scope exceptions for transactions if certain criteria are met. These transactions include contract modifications, hedge accounting, and the sale or transfer of debt securities classified as held-to-maturity. We may elect to apply the provisions of the new standard prospectively through December 31, 2022. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. We have yet to elect an adoption date, but do not believe the adoption would have a material impact on our financial condition, results of operations or cash flows. |
Cash Flow Hedges | Cash Flow Hedges We enter into foreign currency forward contracts designated as cash flow hedges (to sell Canadian dollars and purchase U.S. dollars) for forecasted inventory purchases in U.S. dollars by our Canadian subsidiary. These hedges have terms of up to 12 months. All hedging relationships are formally documented, and the forward contracts are designed to mitigate foreign currency exchange risk on hedged transactions. We record the effective portion of changes in the fair value of our cash flow hedges in other comprehensive income (“OCI”) until the earlier of when the hedged forecasted inventory purchase occurs or the respective contract reaches maturity. Subsequently, as the inventory is sold to the customer, we reclassify amounts previously recorded in OCI to cost of goods sold. |
Fair Value Measurements | Foreign Currency Derivatives and Hedging Instruments We use the income approach to value our derivatives using observable Level 2 market data at the measurement date and standard valuation techniques to convert future amounts to a single present value amount, assuming that participants are motivated but not compelled to transact. Level 2 inputs are limited to quoted prices that are observable for the assets and liabilities, which include interest rates and credit risk ratings. We use mid-market pricing as a practical expedient for fair value measurements. Key inputs for foreign currency derivatives are the spot rates, forward rates, interest rates and credit derivative market rates. The counterparties associated with our foreign currency forward contracts are large credit-worthy financial institutions, and the derivatives transacted with these entities are relatively short in duration, therefore, we do not consider counterparty concentration and non-performance to be material risks at this time. Both we and our counterparties are expected to perform under the contractual terms of the instruments. None of the derivative contracts we entered into are subject to credit risk-related contingent features or collateral requirements. Long-lived Assets We review the carrying value of all long-lived assets for impairment, primarily at an individual store level, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We measure property and equipment at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. We measure right-of-use assets on a nonrecurring basis using Level 2 inputs that are corroborated by market data. Where Level 2 inputs are not readily available, we use Level 3 inputs. Fair value of these long-lived assets is based on the present value of estimated future cash flows using a discount rate commensurate with the risk. The significant unobservable inputs used in the fair value measurement of our store assets are sales growth/decline, gross margin, employment costs, lease escalations, market rental rates, changes in local real estate markets in which we operate, inflation and the overall economics of the retail industry. Significant fluctuations in any of these inputs individually could significantly impact our measurement of fair value. |
Revenue | Merchandise Sales The majority of our revenues are generated from sales of merchandise to our customers through our e-commerce websites, at our retail stores and through our direct mail catalogs, and include shipping fees received from customers for delivery of merchandise to their homes. The remainder of our revenues are primarily generated from sales to our franchisees and wholesale transactions, incentives received from credit card issuers in connection with our private label and co-branded credit cards and breakage income related to stored-value cards. Revenues from sales of merchandise are recognized at a point in time when control of merchandise is transferred to the customer. Merchandise can either be picked up in our stores or delivered to the customer. For merchandise picked up in the store, control is transferred at the time of the sale to the customer. For merchandise delivered to the customer, control is transferred either when delivery has been completed, or when we have a present right to payment which, for certain merchandise, occurs upon conveyance of the merchandise to the carrier for delivery. We exclude from revenue any taxes assessed by governmental authorities, including value-added and other sales-related taxes, that are imposed on and are concurrent with revenue-generating activities. Our payment terms are primarily at the point of sale for merchandise sales and for most services. We have elected to account for shipping and handling as fulfillment activities, and not as a separate performance obligation. Gift Card and Other Deferred Revenue We defer revenue and record a liability when cash payments are received in advance of satisfying performance obligations, primarily associated with our merchandise sales, stored-value cards, customer loyalty programs, and incentives received from credit card issuers. We issue stored-value cards that may be redeemed on future merchandise purchases. Our stored-value cards have no expiration dates. Revenue from stored-value cards is recognized at a point in time upon redemption of the card and as control of the merchandise is transferred to the customer. Revenue from estimated unredeemed stored-value cards (“breakage”) is recognized in a manner consistent with our historical redemption patterns over the estimated period of redemption of our cards of approximately four years, the majority of which is recognized within one year of the card issuance. Breakage revenue is not material to our Condensed Consolidated Financial Statements. We have customer loyalty programs, which allow members to earn points for each qualifying purchase. Points earned enable members to receive certificates that may be redeemed on future merchandise purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points or certificates earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Condensed Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be issued and redeemed, based on historical patterns. This measurement is applied to our portfolio of performance obligations for points or certificates earned, as all obligations have similar economic characteristics. We believe the impact to our Condensed Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within six months from issuance. We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards, whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. Services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
May 01, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Net Earnings and Number of Shares Used In Basic and Diluted Earnings per Share Computations | The following is a reconciliation of net earnings and the number of shares used in the basic and diluted earnings per share computations: (In thousands, except per share amounts) Net Earnings Weighted Earnings Thirteen weeks ended May 1, 2022 Basic $ 254,113 70,851 $ 3.59 Effect of dilutive stock-based awards 1,801 Diluted $ 254,113 72,652 $ 3.50 Thirteen weeks ended May 2, 2021 Basic $ 227,802 75,800 $ 3.01 Effect of dilutive stock-based awards 2,685 Diluted $ 227,802 78,485 $ 2.90 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
May 01, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | The following table summarizes our net revenues by brand for the thirteen weeks ended May 1, 2022 and May 2, 2021. For the Thirteen Weeks Ended (In thousands) May 1, 2022 May 2, 2021 Pottery Barn $ 774,646 $ 679,055 West Elm 536,293 477,317 Williams Sonoma 252,220 265,607 Pottery Barn Kids and Teen 226,969 236,067 Other 1 101,099 90,983 Total 2 $ 1,891,227 $ 1,749,029 1 Primarily consists of net revenues from Rejuvenation, our international franchise operations and Mark and Graham. 2 Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $95.0 million and $99.9 million for the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively. |
Summary of Long-lived Assets by Geographic Areas | Long-lived assets by geographic location are as follows: As of (In thousands) May 1, 2022 1 May 2, 2021 1 U.S. $ 2,146,474 $ 2,012,572 International 135,387 148,672 Total $ 2,281,861 $ 2,161,244 1 Includes total goodwill, deferred tax assets and intangibles of $144.3 million and $154.3 million for the thirteen weeks ended May 1, 2022 and May 2, 2021, respectively, of which $132.0 million and $142.1 million, respectively, is related to the U.S. |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
May 01, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Foreign Currency Forward Contracts Outstanding with Notional Values | As of May 1, 2022 and May 2, 2021, we had foreign currency forward contracts outstanding (in U.S. dollars) with notional values as follows: As of (In thousands) May 1, 2022 May 2, 2021 Contracts designated as cash flow hedges $ 17,500 $ 18,000 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
May 01, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax | Changes in accumulated other comprehensive income (loss) by component, net of tax, are as follows: (In thousands) Foreign Currency Cash Flow Accumulated Other Balance at January 30, 2022 $ (10,886) $ 58 $ (10,828) Foreign currency translation adjustments (1,514) — (1,514) Change in fair value of derivative financial instruments — 93 93 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — (18) (18) Other comprehensive income (loss) (1,514) 75 (1,439) Balance at May 1, 2022 $ (12,400) $ 133 $ (12,267) Balance at January 31, 2021 $ (6,398) $ (719) $ (7,117) Foreign currency translation adjustments 3,700 — 3,700 Change in fair value of derivative financial instruments — (665) (665) Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 — 153 153 Other comprehensive income (loss) 3,700 (512) 3,188 Balance at May 2, 2021 $ (2,698) $ (1,231) $ (3,929) |
BORROWING ARRANGEMENTS (Details
BORROWING ARRANGEMENTS (Details) | 3 Months Ended | |
May 01, 2022USD ($)facility | May 02, 2021USD ($) | |
Debt Instrument [Line Items] | ||
Outstanding letter of credit facilities | $ 6,500,000 | |
Standby Letters of Credit | ||
Debt Instrument [Line Items] | ||
Amount issued but undrawn under credit facility | $ 11,400,000 | |
Letter of Credit Facility Renewed and Extended | ||
Debt Instrument [Line Items] | ||
Number of facilities | facility | 3 | |
Maximum borrowing capacity of letter of credit after renewal | $ 35,000,000 | |
Unsecured Revolving Line of Credit | ||
Debt Instrument [Line Items] | ||
Current borrowing capacity | 500,000,000 | |
Additional borrowing capacity | 250,000,000 | |
Maximum borrowing capacity including additional borrowing capacity | 750,000,000 | |
Borrowings under revolving line of credit | $ 0 | $ 0 |
Unsecured Revolving Line of Credit | Margin Based on Leverage Ratio | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.91% | |
Unsecured Revolving Line of Credit | Margin Based on Leverage Ratio | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 1.775% | |
Unsecured Revolving Line of Credit | Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.00% | |
Unsecured Revolving Line of Credit | Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Leverage ratio | 0.775% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period of awards granted to employees, years | 4 years | |
Stock-based compensation expense | $ 28,542 | $ 26,330 |
Selling, General and Administrative Expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 28,500 | $ 26,300 |
Minimum | Non-Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period of awards granted to employees, years | 1 year | |
Equity Award Programs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Aggregate number of shares under the plan (in shares) | 42,700,000 | |
Shares available for future grant (in shares) | 6,100,000 | |
Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards annual grant limit (in shares) | 1,000,000 | |
Performance Based Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period of awards granted to employees, years | 3 years |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Net Earnings and Number of Shares Used in Basic and Diluted Earnings Per Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Net Earnings | ||
Basic | $ 254,113 | $ 227,802 |
Diluted | $ 254,113 | $ 227,802 |
Weighted Average Shares | ||
Basic (in shares) | 70,851 | 75,800 |
Effect of dilutive stock-based awards (in shares) | 1,801 | 2,685 |
Diluted (in shares) | 72,652 | 78,485 |
Earnings Per Share | ||
Basic (in USD per share) | $ 3.59 | $ 3.01 |
Diluted (in USD per share) | $ 3.50 | $ 2.90 |
SEGMENT REPORTING - Net Revenue
SEGMENT REPORTING - Net Revenues by Segment (Details) $ in Thousands | 3 Months Ended | |
May 01, 2022USD ($)segment | May 02, 2021USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of segments | segment | 1 | |
Total | $ 1,891,227 | $ 1,749,029 |
International | ||
Segment Reporting Information [Line Items] | ||
Total | 95,000 | 99,900 |
Pottery Barn | ||
Segment Reporting Information [Line Items] | ||
Total | 774,646 | 679,055 |
West Elm | ||
Segment Reporting Information [Line Items] | ||
Total | 536,293 | 477,317 |
Williams Sonoma | ||
Segment Reporting Information [Line Items] | ||
Total | 252,220 | 265,607 |
Pottery Barn Kids and Teen | ||
Segment Reporting Information [Line Items] | ||
Total | 226,969 | 236,067 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total | $ 101,099 | $ 90,983 |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Long-lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | May 01, 2022 | May 02, 2021 |
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 2,281,861 | $ 2,161,244 |
Goodwill, deferred tax assets and intangibles | 144,300 | 154,300 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | 2,146,474 | 2,012,572 |
Goodwill, deferred tax assets and intangibles | 132,000 | 142,100 |
International | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets | $ 135,387 | $ 148,672 |
STOCK REPURCHASE PROGRAM AND _2
STOCK REPURCHASE PROGRAM AND DIVIDENDS (Details) - USD ($) | Feb. 28, 2022 | Mar. 31, 2022 | May 01, 2022 | May 02, 2021 | Jan. 30, 2022 |
Equity [Abstract] | |||||
Stock repurchase program | $ 1,500,000,000 | ||||
Common stock repurchased (in shares) | 3,379,731 | 1,790,725 | |||
Common stock repurchased, average cost per share (in USD per share) | $ 148.26 | $ 176.20 | |||
Common stock repurchased, total cost | $ 501,075,000 | $ 315,529,000 | |||
Stock repurchase program, remaining authorized repurchase amount | 1,100,000,000 | ||||
Treasury stock | $ 739,000 | $ 711,000 | $ 711,000 | ||
Increase in cash dividends declared per common share, percentage | 10.00% | ||||
Cash dividends declared per common share (in USD per share) | $ 0.71 | $ 0.78 | $ 0.78 | $ 0.59 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Foreign Currency Forward Contracts Outstanding with Notional Values (Details) - USD ($) $ in Thousands | May 01, 2022 | May 02, 2021 |
Foreign Exchange Contract | Derivatives designated as hedging instruments | Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Contracts designated as cash flow hedges | $ 17,500 | $ 18,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 1,664,207 | $ 1,651,185 |
Reclassification adjustment for realized (gain) loss on derivative financial instruments | (18) | 153 |
Other comprehensive income (loss) | (1,439) | 3,188 |
Ending Balance | 1,309,744 | 1,447,296 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (10,828) | (7,117) |
Ending Balance | (12,267) | (3,929) |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (10,886) | (6,398) |
Other comprehensive income (loss), before reclassifications | (1,514) | 3,700 |
Other comprehensive income (loss) | (1,514) | 3,700 |
Ending Balance | (12,400) | (2,698) |
Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 58 | (719) |
Other comprehensive income (loss), before reclassifications | 93 | (665) |
Reclassification adjustment for realized (gain) loss on derivative financial instruments | (18) | 153 |
Other comprehensive income (loss) | 75 | (512) |
Ending Balance | $ 133 | $ (1,231) |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 01, 2022 | May 02, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Customer loyalty program, expiration period | 6 months | |
Other Current Liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Expected sales return liability | $ 40.8 | $ 34.3 |
Other Current Assets | ||
Disaggregation of Revenue [Line Items] | ||
Reduction in cost of goods sold for expected net realizable value of merchandise inventory to be returned | $ 12.1 | 10.2 |
Stored-Value Cards | ||
Disaggregation of Revenue [Line Items] | ||
Stored value card redemption period | 4 years | |
Stored-Value Cards, Merchandise Sales and Credit Card Incentives | ||
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 494.3 | $ 392.8 |