wsm-20211031

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 October 31, 2021.


☐			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 November 28, 2021, 72,954,519 shares of the registrant’s Common Stock were outstanding.

Table of Contents

WILLIAMS-SONOMA, INC.

REPORT ON FORM 10-Q

FOR THE QUARTER ENDED OCTOBER 31, 2021

TABLE OF CONTENTS


	PART I. FINANCIAL INFORMATION
		PAGE
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	23
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)


	Thirteen Weeks Ended				Thirty-nine Weeks Ended
In thousands, except per share amounts	October 31, 2021		November 1, 2020		October 31, 2021		November 1, 2020
Net revenues	$	2,047,539	$	1,764,536	$	5,744,907	$	4,490,516
Cost of goods sold	1,152,054		1,058,953		3,238,181		2,819,471
Gross profit	895,485		705,583		2,506,726		1,671,045
Selling, general and administrative expenses	565,218		430,979		1,578,182		1,162,435
Operating income	330,267		274,604		928,544		508,610
Interest expense, net	121		5,344		1,954		13,967
Earnings before income taxes	330,146		269,260		926,590		494,643
Income taxes	80,622		67,488		203,194		122,884
Net earnings	$	249,524	$	201,772	$	723,396	$	371,759
Basic earnings per share	$	3.37	$	2.60	$	9.66	$	4.80
Diluted earnings per share	$	3.29	$	2.54	$	9.40	$	4.71
Shares used in calculation of earnings per share:
Basic	74,010		77,487		74,865		77,511
Diluted	75,943		79,332		76,975		79,012

See Notes to Condensed Consolidated Financial Statements.

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Thirteen Weeks Ended				Thirty-nine Weeks Ended
In thousands	October 31, 2021		November 1, 2020		October 31, 2021		November 1, 2020
Net earnings	$	249,524	$	201,772	$	723,396	$	371,759
Other comprehensive income (loss):
Foreign currency translation adjustments	792		(745)		970		716
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $(19), $21, $(235), and $146	(54)		54		(654)		403
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax (tax benefit) of $(131), $85, $(312), and $136	369		(231)		859		(375)
Comprehensive income	$	250,631	$	200,850	$	724,571	$	372,503

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


In thousands, except per share amounts	October 31, 2021		January 31, 2021		November 1, 2020
ASSETS
Current assets
Cash and cash equivalents	$	656,898	$	1,200,337	$	773,170
Accounts receivable, net	139,511		143,728		129,782
Merchandise inventories, net	1,272,028		1,006,299		1,125,475
Prepaid expenses	85,433		93,822		84,974
Other current assets	22,852		22,894		23,556
Total current assets	2,176,722		2,467,080		2,136,957
Property and equipment, net	892,226		873,894		869,092
Operating lease right-of-use assets	1,159,315		1,086,009		1,091,649
Deferred income taxes, net	61,768		61,854		42,185
Goodwill	85,392		85,446		85,402
Other long-term assets, net	101,901		87,141		85,394
Total assets	$	4,477,324	$	4,661,424	$	4,310,679
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	638,371	$	542,992	$	562,294
Accrued expenses	273,722		267,592		194,985
Gift card and other deferred revenue	431,446		373,164		349,671
Income taxes payable	38,320		69,476		36,037
Current debt	—		299,350		—

Operating lease liabilities	218,348		209,754		217,448
Other current liabilities	91,418		85,672		99,691
Total current liabilities	1,691,625		1,848,000		1,460,126
Deferred lease incentives	17,268		20,612		21,858
Long-term debt	—		—		299,173
Long-term operating lease liabilities	1,095,290		1,025,057		1,027,142
Other long-term liabilities	129,771		116,570		100,478
Total liabilities	2,933,954		3,010,239		2,908,777
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; 73,326, 76,340 and 76,697 shares issued and outstanding at October 31, 2021, January 31, 2021 and November 1, 2020, respectively	734		764		768
Additional paid-in capital	585,449		638,375		623,379
Retained earnings	963,840		1,019,762		792,196
Accumulated other comprehensive loss	(5,942)		(7,117)		(13,843)
Treasury stock, at cost: 4, 8 and 8 shares as of October 31, 2021, January 31, 2021 and November 1, 2020, respectively	(711)		(599)		(598)
Total stockholders’ equity	1,543,370		1,651,185		1,401,902
Total liabilities and stockholders’ equity	$	4,477,324	$	4,661,424	$	4,310,679

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Total
Stockholders’
Equity

In thousands

Amount

Balance at January 31, 2021

76,340

764

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