Related Quotes
	Williams-sonoma Inc DE	309.45	1.16	0.38%
	Enter Symbols:

Williams-Sonoma, Inc. announces fourth quarter and fiscal year 2023 results

Q4 comparable brand revenue -6.8%

Q4 operating margin of 20.1%; Q4 diluted EPS of $5.44

Quarterly dividend increase of 26%; new stock repurchase authorization of $1 billion

Alber concluded, "We outperformed in 2023 despite the slowest housing market in several decades and geopolitical unrest. Although this pressured our top-line trend, we stayed focused on full-price selling, supply chain efficiencies, and best-in-class customer service. We have transformed our business model and as a result, we delivered an operating margin well ahead of our pre-pandemic profitability."

FOURTH QUARTER 2023 HIGHLIGHTS

• Comparable brand revenue -6.8% with a 2-year comp -7.4% and a 4-year comp +29.1%.

• Gross margin of 46.0% +480bps to LY with selling margin +560bps due to higher merchandise margins and lower costs from supply chain efficiencies, offset by occupancy deleverage of 80bps. Occupancy costs of $208 million, +2.1% to LY.

• SG&A rate of 25.9% +390bps to LY on a GAAP basis and +460bps to LY on a non-GAAP basis driven by employment and general expense deleverage. SG&A of $591 million, +9.3% to LY on a GAAP basis and +13.0% to LY on a non-GAAP basis.

• Operating income of $458 million with an operating margin of 20.1%.

• Diluted EPS of $5.44 per share.

FISCAL YEAR 2023 HIGHLIGHTS

• Comparable brand revenue -9.9% with a 2-year comp -3.4% and a 4-year comp +35.6%.

• Gross margin of 42.6%, +20bps to LY on a GAAP basis with selling margin +170bps due to higher merchandise margins and supply chain efficiencies, offset by occupancy deleverage of 150bps. Gross margin of 42.7%, +30bps to LY on a non-GAAP basis with selling margin +170bps due to higher merchandise margins and supply chain efficiencies, and occupancy deleverage of 140bps. Occupancy costs of $814 million, +3.7% to LY on a GAAP basis and +3.6% on a non-GAAP basis.

• SG&A rate of 26.6%, +150bps to LY on a GAAP basis and 26.3%, +140bps to LY on a non-GAAP basis, driven by employment and general expense deleverage. GAAP SG&A of $2.1 billion, -5.5% to LY, and non-GAAP SG&A of $2.0 billion, -5.8% to LY.

• GAAP operating income of $1.24 billion with an operating margin of 16.1%; non-GAAP operating income of $1.27 billion with an operating margin of 16.4%.

• GAAP diluted EPS of $14.55 and non-GAAP diluted EPS of $14.85.

• Merchandise inventories -14.4% to LY to $1.2 billion.

• ROIC of 45.0% driven by net earnings.

• Maintained strong liquidity position of $1.3 billion in cash and $1.7 billion in operating cash flow enabling the company to deliver returns to stockholders of $545 million through $313 million in stock repurchases and $232 million in dividends.

DIVIDENDS AND STOCK REPURCHASE AUTHORIZATIONS

• Increased our quarterly dividend 26%, or $0.23, to $1.13 per share.

• Expanded our stock repurchase capacity to $1 billion, superseding the company's current stock repurchase authorization.

OUTLOOK

• In fiscal 2024, we expect annual net revenue growth in the range of -3% to +3% with comps in the range of -4.5% to +1.5%; and an operating margin between 16.5% to 16.8%.

• Fiscal 2024 is a 53-week year. Our financial statements will be prepared on a 53-week basis in fiscal 2024 and a 52-week basis in fiscal 2023. However, we will report comps on a 53-week versus 53-week comparable basis. All other year-over-year comparisons will be 53-weeks in fiscal 2024 versus 52-weeks in fiscal 2023. We expect the additional week in fiscal 2024 to contribute 150bps to revenue growth and 10bps to operating margin, both of which are reflected in our guidance.

• Over the long-term, we continue to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, March 13, 2024, at 7:00 A.M. (PT). The call will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.

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 U.S. ("GAAP"). We have not provided a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis as we cannot do so without unreasonable efforts due to the potential variability and limited visibility of excluded items; these excluded items include exit costs associated with the closure of our West Coast manufacturing facility and the exiting of Aperture, a division of our Outward, Inc. subsidiary, as well as costs related to reduction-in-force initiatives. For the same reasons, we are unable to address the probable significance of such excluded items. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance 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. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to the GAAP financial measures presented in this press release and our financial statements and other publicly filed reports. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.

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 and our fiscal year 2024 outlook and long-term financial targets.

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 continuing impact of inflation and measures to control inflation, including changing interest rates, on consumer spending; war in Ukraine and the Middle East, and shortages of various raw materials on our global supply chain, retail store operations and customer demand; labor and material shortages; the outcome of our growth initiatives; 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; 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, supply chain, product, transportation 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; the impact of current and potential future tariffs and our ability to mitigate impacts; the potential for increased corporate income taxes; 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 29, 2023 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We have not filed our Form 10-K for the fiscal year ended January 28, 2024. As a result, all financial results described here should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time we file the Form 10-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 the world's largest digital-first, design-led and sustainable home retailer. The company's products, representing distinct merchandise strategies - Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, and GreenRow - are marketed through e-commerce websites, direct-mail catalogs and retail stores. These brands are also part of The Key Rewards, our loyalty and credit card program that offers members exclusive benefits across the Williams-Sonoma family of brands. We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, offer international shipping to customers worldwide, and have unaffiliated franchisees that operate stores in the Middle East, the Philippines, Mexico, South Korea and India, as well as e-commerce websites in certain locations. We are also proud to be a leader in our industry with our values-based culture and commitment to achieving our sustainability goals. Our company is Good By Design - we've deeply ingrained sustainability into our business. From our factories to your home, we're united in a shared purpose to care for our people and our planet.

For more information on our sustainability efforts, please visit: https://sustainability.williams-sonomainc.com/

WSM-IR

Return on Invested Capital ("ROIC")

We believe ROIC is a useful financial measure for investors in evaluating the efficient and effective use of capital, and is an important component of long-term shareholder return.

The following table presents the calculation of ROIC, together with a reconciliation of net earnings to non-GAAP net operating profit after tax ("NOPAT"):

SEC Regulation G - Non-GAAP Information

These tables include non-GAAP occupancy costs, gross profit, gross margin, selling, general and administrative expense, operating income, Adjusted 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/20240313523576/en/