wsm-20240428

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 28, 2024.


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-14077

_________________________

WILLIAMS-SONOMA, INC.

(Exact name of registrant as specified in its charter)

_________________________

Delaware

(State or other jurisdiction of

incorporation or organization)

3250 Van Ness Avenue, San Francisco, CA

(Address of principal executive offices)

94-2203880

(I.R.S. Employer

Identification No.)

94109

(Zip Code)

Registrant’s telephone number, including area code: (415) 421-7900

(Former name, former address and former fiscal year, if changed since last report)

_________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading
Symbol(s):

Name of each exchange
on which registered:

Common Stock, par value $.01 per share

WSM

New York Stock Exchange, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 19, 2024, 64,308,083 shares of the registrant’s Common Stock were outstanding.


	PART I. FINANCIAL INFORMATION
		PAGE
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21


	For the Thirteen Weeks Ended
(In thousands, except per share amounts)	April 28, 2024		April 30, 2023
Net revenues	$	1,660,348	$	1,755,451
Cost of goods sold	857,833		1,080,392
Gross profit	802,515		675,059
Selling, general and administrative expenses	478,687		475,582
Operating income	323,828		199,477
Interest income, net	16,053		5,498
Earnings before income taxes	339,881		204,975
Income taxes	74,215		48,444
Net earnings	$	265,666	$	156,531
Basic earnings per share	$	4.14	$	2.38
Diluted earnings per share	$	4.07	$	2.35
Shares used in calculation of earnings per share:
Basic	64,206		65,849
Diluted	65,315		66,696


	For the Thirteen Weeks Ended
(In thousands)	April 28, 2024		April 30, 2023
Net earnings	$	265,666	$	156,531
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,342)		(2,205)
Change in fair value of derivative financial instruments, net of tax of $0 and $86.	1		242
Reclassification adjustment for realized gains on derivative financial instruments, net of tax of $0 and $172.	—		(486)
Comprehensive income	$	264,325	$	154,082


	As of
(In thousands, except per share amounts)	April 28, 2024		January 28, 2024		April 30, 2023
ASSETS
Current assets
Cash and cash equivalents	$	1,254,786	$	1,262,007	$	297,291
Accounts receivable, net	115,215		122,914		109,203
Merchandise inventories, net	1,218,438		1,246,369		1,401,616
Prepaid expenses	62,752		59,466		62,723
Other current assets	22,787		29,041		27,993
Total current assets	2,673,978		2,719,797		1,898,826
Property and equipment, net	990,166		1,013,189		1,050,026
Operating lease right-of-use assets	1,187,777		1,229,650		1,258,599
Deferred income taxes, net	102,203		110,656		70,758
Goodwill	77,292		77,306		77,330
Other long-term assets, net	128,563		122,950		115,498
Total assets	$	5,159,979	$	5,273,548	$	4,471,037
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	502,136	$	607,877	$	629,561
Accrued expenses	154,093		264,306		205,175
Gift card and other deferred revenue	596,340		573,904		452,505
Income taxes payable	148,826		96,554		87,680


Operating lease liabilities	229,555		234,517		229,751
Other current liabilities	90,007		103,157		97,144
Total current liabilities	1,720,957		1,880,315		1,701,816


Long-term operating lease liabilities	1,112,329		1,156,104		1,186,231
Other long-term liabilities	117,135		109,268		116,165
Total liabilities	2,950,421		3,145,687		3,004,212
Commitments and contingencies – See Note F
Stockholders’ equity
Preferred stock: $0.01 par value; 7,500 shares authorized; none issued	—		—		—
Common stock: $0.01 par value; 253,125 shares authorized; 64,337, 64,151 and 64,222 shares issued and outstanding at April 28, 2024, January 28, 2024 and April 30, 2023, respectively	644		642		643
Additional paid-in capital	521,833		588,602		531,940
Retained earnings	1,704,409		1,555,595		951,926
Accumulated other comprehensive loss	(16,893)		(15,552)		(16,258)
Treasury stock, at cost: 4, 6 and 6 shares as of April 28, 2024, January 28, 2024 and April 30, 2023, respectively	(435)		(1,426)		(1,426)
Total stockholders’ equity	2,209,558		2,127,861		1,466,825
Total liabilities and stockholders’ equity	$	5,159,979	$	5,273,548	$	4,471,037


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
(In thousands)	Shares	Amount
Balance at January 28, 2024	64,151	$	642	$	588,602	$	1,555,595	$	(15,552)	$	(1,426)	$	2,127,861
Net earnings	—	—		—		265,666		—		—		265,666
Foreign currency translation adjustments	—	—		—		—		(1,342)		—		(1,342)
Change in fair value of derivative financial instruments, net of tax	—	—		—		—		1		—		1

Release of stock-based awards 1	343	3		(86,784)		—		—		(227)		(87,008)
Repurchases of common stock	(157)	(1)		(958)		(42,822)		—		—		(43,781)

Reissuance of treasury stock under stock-based compensation plans 1	—	—		(1,218)		—		—		1,218		—
Stock-based compensation expense	—	—		22,191		—		—		—		22,191
Dividends declared	—	—		—		(74,030)		—		—		(74,030)
Balance at April 28, 2024	64,337	$	644	$	521,833	$	1,704,409	$	(16,893)	$	(435)	$	2,209,558


(In thousands, except per share amounts)	Net Earnings		Weighted Average Shares	Earnings Per Share
Thirteen weeks ended April 28, 2024
Basic	$	265,666	64,206	$	4.14
Effect of dilutive stock-based awards			1,109
Diluted	$	265,666	65,315	$	4.07
Thirteen weeks ended April 30, 2023
Basic	$	156,531	65,849	$	2.38
Effect of dilutive stock-based awards			847
Diluted	$	156,531	66,696	$	2.35


	For the Thirteen Weeks Ended 1
(In thousands)	April 28, 2024		April 30, 2023
Pottery Barn	$	677,335	$	767,714
West Elm	430,309		452,393
Williams Sonoma	238,239		239,421
Pottery Barn Kids and Teen	221,802		216,221


Other 2	92,663		79,702
Total 3	$	1,660,348	$	1,755,451
1Includes business-to-business net revenues within each brand.
2Primarily consists of net revenues from Rejuvenation, our international franchise operations, Mark and Graham and GreenRow.
3Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom, and our franchise businesses) of approximately $73.5 million and $70.8 million for the thirteen weeks ended April 28, 2024 and April 30, 2023, respectively.


(In thousands)	Foreign Currency Translation		Cash Flow Hedges		Accumulated Other Comprehensive Income (Loss)
Balance at January 28, 2024	$	(15,457)	$	(95)	$	(15,552)
Foreign currency translation adjustments	(1,342)		—		(1,342)
Change in fair value of derivative financial instruments	—		1		1

Other comprehensive income (loss)	(1,342)		1		(1,341)
Balance at April 28, 2024	$	(16,799)	$	(94)	$	(16,893)











Balance at January 29, 2023	$	(14,458)	$	649	$	(13,809)
Foreign currency translation adjustments	(2,205)		—		(2,205)
Change in fair value of derivative financial instruments	—		242		242
Reclassification adjustment for realized (gain) loss on derivative financial instruments	—		(486)		(486)
Other comprehensive income (loss)	(2,205)		(244)		(2,449)
Balance at April 30, 2023	$	(16,663)	$	405	$	(16,258)


	For the Thirteen Weeks Ended 1
Comparable brand revenue growth (decline)	April 28, 2024		April 30, 2023
Pottery Barn	(10.8)	%	(0.4)	%
West Elm	(4.1)		(15.8)
Williams Sonoma	0.9		(4.4)
Pottery Barn Kids and Teen	2.8		(3.3)

Total 2	(4.9)	%	(6.0)	%

1 Comparable brand revenue includes business-to-business revenues within each brand.
2 Total comparable brand revenue growth includes the results of Rejuvenation and Mark and Graham.


	Store Count					Average Leased Square Footage Per Store
	January 28, 2024	Openings	Closings	April 28, 2024	April 30, 2023	April 28, 2024	April 30, 2023
Pottery Barn	184	1	(1)	184	188	15,100	14,800
Williams Sonoma	156	—	—	156	165	6,900	6,900
West Elm	121	1	(1)	121	123	13,300	13,200
Pottery Barn Kids	46	—	(1)	45	46	7,900	7,700
Rejuvenation	11	—	—	11	9	8,100	8,000
Total	518	2	(3)	517	531	11,400	11,300
Store selling square footage at period-end						3,815,000	3,816,000
Store leased square footage at period-end						5,901,000	5,974,000


Fiscal Period	Total Number of Shares Purchased 1	Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program 1	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program
January 29, 2024 - February 25, 2024	—	$	—	—	$	686,999,000
February 26, 2024 - March 24, 2024	39,629	$	279.92	39,629	$	988,907,000
March 25, 2024 - April 28, 2024	117,270	$	278.75	117,270	$	956,219,000
Total	156,899	$	279.04	156,899	$	956,219,000


Exhibit Number						Exhibit Description


31.1*						Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

31.2*						Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

32.1*						Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*						Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*						The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 28, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Earnings, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags

104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted under Exhibit 101).


WILLIAMS-SONOMA, INC.

By:						/s/ Jeffrey E. Howie
						Jeffrey E. Howie
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)


By:						/s/ Jeremy Brooks
						Jeremy Brooks
						Senior Vice President and Chief Accounting Officer
						(Principal Accounting Officer)

SEC Form 10-Q filed by Williams-Sonoma Inc.