WILLIAMS-SONOMA, INC. ANNOUNCES RECORD FIRST QUARTER RESULTS
Williams-Sonoma, Inc. (NYSE: WSM) reported strong Q1 2022 results, achieving a 9.5% revenue growth compared to Q1 2021, and a 20.7% increase in diluted EPS to $3.50. The gross margin expanded by 80 basis points to 43.8%, benefiting from higher merchandise margins and occupancy cost leverage. The company maintains a solid liquidity position with $325 million in cash and repurchased over $500 million in shares. Looking ahead, Williams-Sonoma anticipates continued mid-to-high single-digit annual revenue growth, aiming for $10 billion in revenue by fiscal year 2024.
- 9.5% comparable brand revenue growth in Q1 2022.
- Diluted EPS increased by 20.7% to $3.50.
- Gross margin expanded by 80bps to 43.8%.
- Strong liquidity with $325 million in cash.
- Over $500 million in stock repurchases executed.
- None.
Q1 COMPARABLE BRAND REVENUE GROWTH OF
GROSS MARGIN OF
REITERATES FULL YEAR AND LONG-TERM OUTLOOK
RECORD STOCK REPURCHASES OF OVER
“The first quarter of fiscal 2022 represented another quarter of outperformance with a
Alber concluded, “As we look to the balance of the year, we remain confident and committed to our guidance of mid-to-high single digit comps with operating margins relatively aligned to fiscal 2021. We have a solid line-up of growth initiatives and operational improvements planned for the balance of the year. And, as we look further, we are confident in our path to be a
FIRST QUARTER 2022
-
Comparable brand revenue growth of
9.5% , includingPottery Barn at14.6% and West Elm at12.8%
-
Gross margin of
43.8% , expanding 80bps and driven by higher year-over-year merchandise margins as well as occupancy leverage of approximately 20bps; occupancy costs were$186 million
-
Operating margin of
17.1% ; GAAP operating margin expansion of 140bps; non-GAAP operating margin expansion of 120bps
-
Diluted EPS of
, increasing$3.50 20.7% on a GAAP basis and19.5% on a non-GAAP basis over last year
-
Maintained a strong liquidity position of
in cash and generated$325 million in operating cash flow, enabling the company to repurchase over$185 million in shares and to pay over$500 million in dividends in the first quarter$58 million
OUTLOOK
Given the ongoing strength of our business as we enter fiscal year 2022, the continued success of our new initiatives, and our competitive advantages that are rooted in our key differentiators (our in-house design, our digital-first channel strategy, and our values), we are expecting our fiscal year 2022 financial performance to be in line with our long-term financial guidance of mid-to-high single digit annual net revenue growth, increasing revenues to
CONFERENCE CALL AND WEBCAST INFORMATION
SEC REGULATION G — NON-GAAP INFORMATION
This press release includes non-GAAP financial measures. Exhibit 1 provides reconciliations of these non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the
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, among other things, statements in the quotes of our President and Chief Executive Officer, our fiscal year 2022 outlook and long-term financial targets, and statements regarding our growth strategies and macro trends.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: continuing changes in general economic conditions, and the impact on consumer confidence and consumer spending; the impact of inflation and measures to control inflation on consumer spending; the continuing impact of the coronavirus, war in
ABOUT
For more information on our ESG efforts, please visit: https://sustainability.williams-sonomainc.com/
WSM-IR
Condensed Consolidated Statements of Earnings (unaudited) |
||||||||||||
|
For the Thirteen Weeks Ended |
|||||||||||
|
|
|
|
|||||||||
(In thousands, except per share amounts) |
$ |
|
% of
|
|
$ |
|
% of
|
|||||
Net revenues |
$ |
1,891,227 |
|
|
100.0 |
% |
|
$ |
1,749,029 |
|
100.0 |
% |
Cost of goods sold |
|
1,062,679 |
|
|
56.2 |
|
|
|
996,176 |
|
57.0 |
|
Gross profit |
|
828,548 |
|
|
43.8 |
|
|
|
752,853 |
|
43.0 |
|
Selling, general and administrative expenses |
|
505,067 |
|
|
26.7 |
|
|
|
477,676 |
|
27.3 |
|
Operating income |
|
323,481 |
|
|
17.1 |
|
|
|
275,177 |
|
15.7 |
|
Interest (income) expense, net |
|
(163 |
) |
|
— |
|
|
|
1,872 |
|
0.1 |
|
Earnings before income taxes |
|
323,644 |
|
|
17.1 |
|
|
|
273,305 |
|
15.6 |
|
Income taxes |
|
69,531 |
|
|
3.7 |
|
|
|
45,503 |
|
2.6 |
|
Net earnings |
$ |
254,113 |
|
|
13.4 |
% |
|
$ |
227,802 |
|
13.0 |
% |
Earnings per share (EPS): |
|
|
|
|
|
|
|
|||||
Basic |
$ |
3.59 |
|
|
|
|
$ |
3.01 |
|
|
||
Diluted |
$ |
3.50 |
|
|
|
|
$ |
2.90 |
|
|
||
Shares used in calculation of EPS: |
|
|
|
|
|
|
|
|||||
Basic |
|
70,851 |
|
|
|
|
|
75,800 |
|
|
||
Diluted |
|
72,652 |
|
|
|
|
|
78,485 |
|
|
||
1st Quarter Net Revenues and Comparable Brand Revenue Growth (Decline)1 |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
Net Revenues |
|
Comparable Brand Revenue
|
||||||||
(In millions, except percentages) |
Q1 22 |
|
Q1 21 |
|
Q1 22 |
|
Q1 21 |
||||
|
$ |
775 |
|
$ |
679 |
|
14.6 |
% |
|
41.3 |
% |
West Elm |
|
536 |
|
|
477 |
|
12.8 |
|
|
50.9 |
|
|
|
252 |
|
|
266 |
|
(2.2 |
) |
|
35.3 |
|
|
|
227 |
|
|
236 |
|
(3.1 |
) |
|
27.6 |
|
Other2 |
|
101 |
|
|
91 |
|
N/A |
|
|
N/A |
|
Total |
$ |
1,891 |
|
$ |
1,749 |
|
9.5 |
% |
|
40.4 |
% |
1 See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue, which is calculated on a 13-week basis for Q1 2022 and Q1 2021. |
|||||||||||
2 Primarily consists of net revenues from Rejuvenation, our international franchise operations and Mark and Graham. |
|||||||||||
|
|
|
|
|
|
|
|
||||
Condensed Consolidated Balance Sheets (unaudited) |
|||||||||||
|
As of |
||||||||||
(In thousands, except per share amounts) |
|
|
|
|
|
||||||
Assets |
|
|
|
|
|
||||||
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 |
|
|
|
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 |
|
Liabilities and stockholders' equity |
|
|
|
|
|
||||||
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: |
|
— |
|
|
|
— |
|
|
|
— |
|
Common stock: |
|
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 |
) |
|
|
(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 |
|
|
|
|
|
|
|
Retail Store Data (unaudited) |
||||||||||
|
|
|
|
|
|
|
||||
|
Beginning of quarter |
|
|
End of quarter |
|
As of |
||||
|
|
Openings |
Closings |
|
|
|
||||
|
188 |
1 |
(1 |
) |
188 |
|
195 |
|||
|
174 |
2 |
(1 |
) |
175 |
|
195 |
|||
West Elm |
121 |
— |
— |
|
121 |
|
121 |
|||
|
52 |
— |
— |
|
52 |
|
57 |
|||
Rejuvenation |
9 |
— |
— |
|
9 |
|
10 |
|||
Total |
544 |
3 |
(2 |
) |
545 |
|
578 |
|||
1 Retail store data for fiscal 2021 includes stores temporarily closed due to COVID-19. All stores were reopened as of the end of fiscal 2021. |
||||||||||
Condensed Consolidated Statements of Cash Flows (unaudited) |
|||||||
|
For the Thirteen Weeks Ended |
||||||
(In thousands) |
|
|
|
||||
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 |
|
— |
|
|
|
(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 |
|
Exhibit 1 |
||||||||
1st Quarter GAAP to Non-GAAP Reconciliation (unaudited) |
|
|||||||
|
|
|
|
|
|
|
||
|
For the Thirteen Weeks Ended |
|
||||||
|
|
|
|
|
||||
(In thousands, except per share data) |
$ |
% of
|
|
$ |
% of
|
|
||
Selling, general and administrative expenses |
$ |
505,067 |
26.7 % |
|
$ |
477,676 |
27.3 % |
|
Outward-related1 |
|
— |
|
|
|
(2,839) |
|
|
Non-GAAP selling, general and administrative expenses |
$ |
505,067 |
26.7 % |
|
$ |
474,837 |
27.1 % |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Operating income |
$ |
323,481 |
17.1 % |
|
$ |
275,177 |
15.7 % |
|
Outward-related1 |
|
— |
|
|
|
2,839 |
|
|
Non-GAAP operating income |
$ |
323,481 |
17.1 % |
|
$ |
278,016 |
15.9 % |
|
|
|
|
|
|
|
|
||
|
$ |
Tax rate |
|
$ |
Tax rate |
|
||
Income taxes |
$ |
69,531 |
21.5 % |
|
$ |
45,503 |
16.6 % |
|
Outward-related1 |
|
— |
|
|
|
511 |
|
|
Non-GAAP income taxes |
$ |
69,531 |
21.5 % |
|
$ |
46,014 |
16.7 % |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Diluted EPS |
$ |
3.50 |
|
|
$ |
2.90 |
|
|
Outward-related1 |
|
— |
|
|
|
0.03 |
|
|
Non-GAAP diluted EPS2 |
$ |
3.50 |
|
|
$ |
2.93 |
|
|
1 During Q1 2021, we incurred approximately |
|
|||||||
2 Per share amounts may not sum due to rounding to the nearest cent per diluted share. |
|
SEC Regulation G – Non-GAAP Information
These tables include non-GAAP selling, general and administrative expense, operating income, operating margin, income taxes, effective tax rate 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 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220525005917/en/
Julie Whalen EVP, Chief Financial Officer – (415) 616 8524
-or-
Source:
FAQ
What was Williams-Sonoma's revenue growth in Q1 2022?
What is the diluted EPS for Williams-Sonoma in Q1 2022?
How much did the gross margin expand in Q1 2022 for WSM?
What stock repurchase activity did WSM undertake in Q1 2022?