☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-2203880 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
3250 Van Ness Avenue, San Francisco, CA | 94109 | |
(Address of principal executive offices) | (Zip Code) |
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. |
Large accelerated filer | ☒ | |||||
Accelerated filer | ||||||
☐ | ||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
PAGE | ||||||||||
Item 1. | 1 | |||||||||
Item 2. | 16 | |||||||||
Item 3. | 22 | |||||||||
Item 4. | 22 | |||||||||
PART II. OTHER INFORMATION | ||||||||||
Item 1. | 23 | |||||||||
Item 1A. | 23 | |||||||||
Item 2. | 25 | |||||||||
Item 3. | 25 | |||||||||
Item 4. | 25 | |||||||||
Item 5. | 25 | |||||||||
Item 6. | 26 |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||
In thousands, except per share amounts | August 2 , 2020 | August 4 , 2019 | August 2 , 2020 | August 4 , 2019 | ||||||||||||
Net revenues | $ | 1,490,777 | $ | 1,370,814 | $ | 2,725,980 | $ | 2,611,946 | ||||||||
Cost of goods sold | 939,575 | 886,953 | 1,760,518 | 1,683,754 | ||||||||||||
Gross profit | 551,202 | 483,861 | 965,462 | 928,192 | ||||||||||||
Selling, general and administrative expenses | 365,841 | 397,696 | 731,456 | 767,895 | ||||||||||||
Operating income | 185,361 | 86,165 | 234,006 | 160,297 | ||||||||||||
Interest expense, net | 6,464 | 2,669 | 8,623 | 4,922 | ||||||||||||
Earnings before income taxes | 178,897 | 83,496 | 225,383 | 155,375 | ||||||||||||
Income taxes | 44,333 | 20,848 | 55,396 | 40,071 | ||||||||||||
Net earnings | $ | 134,564 | $ | 62,648 | $ | 169,987 | $ | 115,304 | ||||||||
Basic earnings per share | $ | 1.73 | $ | 0.80 | $ | 2.19 | $ | 1.47 | ||||||||
Diluted earnings per share | $ | 1.70 | $ | 0.79 | $ | 2.16 | $ | 1.45 | ||||||||
Shares used in calculation of earnings per share: | ||||||||||||||||
Basic | 77,783 | 78,488 | 77,522 | 78,586 | ||||||||||||
Diluted | 79,264 | 79,470 | 78,841 | 79,633 |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||
In thousands | August 2 , 2020 | August 4 , 2019 | August 2 , 2020 | August 4 , 2019 | ||||||||||||
Net earnings | $ | 134,564 | $ | 62,648 | $ | 169,987 | $ | 115,304 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustments | 6,737 | (1,251 | ) | 1,461 | (4,260 | ) | ||||||||||
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $(71), $(8), $125 and $66 | (200 | ) | (132 | ) | 349 | 72 | ||||||||||
Reclassification adjustment for realized gain on derivative financial instruments, net of tax of $38, $10, $51 and $34 | (107 | ) | (160 | ) | (144 | ) | (227 | ) | ||||||||
Comprehensive income | $ | 140,994 | $ | 61,105 | $ | 171,653 | $ | 110,889 |
Thirteen Weeks Ended | ||||||||
In thousands, except per share amounts | May 3, 2020 | May 5, 2019 | ||||||
Net revenues | $ | 1,235,203 | $ | 1,241,132 | ||||
Cost of goods sold | 820,943 | 796,801 | ||||||
Gross profit | 414,260 | 444,331 | ||||||
Selling, general and administrative expenses | 365,615 | 370,199 | ||||||
Operating income | 48,645 | 74,132 | ||||||
Interest expense, net | 2,159 | 2,253 | ||||||
Earnings before income taxes | 46,486 | 71,879 | ||||||
Income taxes | 11,063 | 19,223 | ||||||
Net earnings | $ | 35,423 | $ | 52,656 | ||||
Basic earnings per share | $ | 0.46 | $ | 0.67 | ||||
Diluted earnings per share | $ | 0.45 | $ | 0.66 | ||||
Shares used in calculation of earnings per share: | ||||||||
Basic | 77,262 | 78,683 | ||||||
Diluted | 78,399 | 79,867 |
In thousands, except per share amounts | August 2, 2020 | February 2, 2020 | August 4, 2019 | |||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 947,760 | $ | 432,162 | $ | 120,467 | ||||||
Accounts receivable, net | 128,737 | 111,737 | 111,114 | |||||||||
Merchandise inventories, net | ||||||||||||
Prepaid expenses | 109,495 | 90,426 | 117,017 | |||||||||
Other current assets | 27,098 | 20,766 | 21,693 | |||||||||
Total current assets | 2,255,430 | 1,755,635 | 1,558,019 | |||||||||
Property and equipment, net | 887,401 | 929,038 | 913,059 | |||||||||
Operating lease right-of-use | 1,146,229 | 1,166,383 | 1,208,528 | |||||||||
Deferred income taxes, net | 37,789 | 47,977 | 38,803 | |||||||||
Goodwill | 85,419 | 85,343 | 85,348 | |||||||||
Other long-term assets, net | 75,028 | 69,666 | 65,924 | |||||||||
Total assets | $ | 4,487,296 | $ | 4,054,042 | $ | 3,869,681 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 373,086 | $ | 521,235 | $ | 404,337 | ||||||
Accrued expenses | 158,407 | 175,003 | 127,137 | |||||||||
Gift card and other deferred revenue | 292,684 | 289,613 | 283,108 | |||||||||
Income taxes payable | 28,502 | 22,501 | 13,065 | |||||||||
Current debt | — | 299,818 | — | |||||||||
Borrowings under revolving line of credit | 487,823 | — | 60,000 | |||||||||
Operating lease liabilities | 221,575 | 227,923 | 222,978 | |||||||||
Other current liabilities | 102,086 | 73,462 | 76,254 | |||||||||
Total current liabilities | 1,664,163 | 1,609,555 | 1,186,879 | |||||||||
Deferred rent and lease incentives | 24,684 | 27,659 | 28,618 | |||||||||
Long-term debt | 298,995 | — | 299,719 | |||||||||
Long-term operating lease liabilities | 1,080,622 | 1,094,579 | 1,148,031 | |||||||||
Other long-term liabilities | 85,910 | 86,389 | 84,831 | |||||||||
Total liabilities | 3,154,374 | 2,818,182 | 2,748,078 | |||||||||
Commitments and contingencies – See Note F | ||||||||||||
Stockholders’ equity | ||||||||||||
Preferred stock: $.01 par value; 7,500 shares authorized; NaN issued | — | — | — | |||||||||
Common stock: $.01 par value; 253,125 shares authorized; 77,796, 77,137 and 78,203 shares issued and outstanding at August 2, 2020, February 2, 2020 and August 4, 2019, respectively | 778 | 772 | 783 | |||||||||
Additional paid-in capital | 608,892 | 605,822 | 584,828 | |||||||||
Retained earnings | 736,772 | 644,794 | 552,454 | |||||||||
Accumulated other comprehensive loss | (12,921 | ) | (14,587 | ) | (15,488 | ) | ||||||
Treasury stock, at cost: 8, 14 and 14 shares as of August 2, 2020, February 2, 2020 and August 4, 2019, respectively | (599 | ) | (941 | ) | (974 | ) | ||||||
Total stockholders’ equity | 1,332,922 | 1,235,860 | 1,121,603 | |||||||||
Total liabilities and stockholders’ equity | $ | 4,487,296 | $ | 4,054,042 | $ | 3,869,681 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||
In thousands | Shares | Amount | ||||||||||||||||||||||||||
Balance at February 2, 2020 | 77,137 | $ | 772 | $ | 605,822 | $ | 644,794 | $ | (14,587 | ) | $ | (941 | ) | $ | 1,235,860 | |||||||||||||
Net earnings | — | — | — | 35,423 | — | — | 35,423 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (5,276 | ) | — | (5,276 | ) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | 549 | — | 549 | |||||||||||||||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments, net of tax | — | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 622 | 6 | (28,747 | ) | — | — | (171 | ) | (28,912 | ) | ||||||||||||||||||
Reissuance of treasury stock under stock-based compensation plans 1 | — | — | (499 | ) | (14 | ) | — | 513 | — | |||||||||||||||||||
Stock-based compensation expense | — | — | 19,608 | — | — | — | 19,608 | |||||||||||||||||||||
Dividends declared | — | — | — | (38,286 | ) | — | — | (38,286 | ) | |||||||||||||||||||
Balance at May 3, 2020 | 77,759 | $ | 778 | $ | 596,184 | $ | 641,917 | $ | (19,351 | ) | $ | (599 | ) | $ | 1,218,929 | |||||||||||||
Net earnings | — | — | — | 134,564 | — | — | 134,564 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 6,737 | — | 6,737 | |||||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | (200 | ) | — | (200 | ) | |||||||||||||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments, net of tax | — | — | — | — | (107 | ) | — | (107 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 37 | — | (677 | ) | — | — | — | (677 | ) | |||||||||||||||||||
Stock-based compensation expense | — | — | 13,385 | — | — | — | 13,385 | |||||||||||||||||||||
Dividends declared | — | — | — | (39,709 | ) | — | — | (39,709 | ) | |||||||||||||||||||
Balance at August 2, 2020 | 77,796 | $ | 778 | $ | 608,892 | $ | 736,772 | $ | (12,921 | ) | $ | (599 | ) | $ | 1,332,922 |
1 | Amounts are shown net of shares withheld for employee taxes . |
Thirteen Weeks Ended | ||||||||
In thousands | May 3, 2020 | May 5, 2019 | ||||||
Net earnings | $ | 35,423 | $ | 52,656 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | (5,276 | ) | (3,009 | ) | ||||
Change in fair value of derivative financial instruments, net of tax of $196 and $74 | 549 | 204 | ||||||
Reclassification adjustment for realized (gain) on derivative financial instruments, net of tax of $13 and $24 | (37 | ) | (67 | ) | ||||
Comprehensive income | $ | 30,659 | $ | 49,784 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||
In thousands | Shares | Amount | ||||||||||||||||||||||||||
Balance at February 3, 2019 | 78,813 | $ | 789 | $ | 581,900 | $ | 584,333 | $ | (11,073 | ) | $ | (235 | ) | $ | 1,155,714 | |||||||||||||
Net earnings | — | — | — | 52,656 | — | — | 52,656 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (3,009 | ) | — | (3,009 | ) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | 204 | — | 204 | |||||||||||||||||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | — | — | — | — | (67 | ) | — | (67 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 571 | 5 | (25,298 | ) | — | — | (113 | ) | (25,406 | ) | ||||||||||||||||||
Repurchases of common stock | (576 | ) | (6 | ) | (2,874 | ) | (30,010 | ) | — | (958 | ) | (33,848 | ) | |||||||||||||||
Reissuance of treasury stock under stock-based compensation plans 1 | — | — | (332 | ) | — | — | 332 | — | ||||||||||||||||||||
Stock-based compensation expense | — | — | 18,376 | — | — | — | 18,376 | |||||||||||||||||||||
Dividends declared | — | — | — | (39,549 | ) | — | — | (39,549 | ) | |||||||||||||||||||
Adoption of accounting pronouncements 2 | — | — | — | (3,303 | ) | — | — | (3,303 | ) | |||||||||||||||||||
Balance at May 5, 2019 | 78,808 | $ | 788 | $ | 571,772 | $ | 564,127 | $ | (13,945 | ) | $ | (974 | ) | $ | 1,121,768 | |||||||||||||
Net earnings | — | — | — | 62,648 | — | — | 62,648 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (1,251 | ) | — | (1,251 | ) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | (132 | ) | — | (132 | ) | |||||||||||||||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax | — | — | — | — | (160 | ) | — | (160 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 31 | 1 | (482 | ) | — | — | — | (481 | ) | |||||||||||||||||||
Repurchases of common stock | (636 | ) | (6 | ) | (3,170 | ) | (35,107 | ) | — | — | (38,283 | ) | ||||||||||||||||
Stock-based compensation expense | — | — | 16,708 | — | — | — | 16,708 | |||||||||||||||||||||
Dividends declared | — | — | — | (39,214 | ) | — | — | (39,214 | ) | |||||||||||||||||||
Balance at August 4, 2019 | 78,203 | $ | 783 | $ | 584,828 | $ | 552,454 | $ | (15,488 | ) | $ | (974 | ) | $ | 1,121,603 | |||||||||||||
1 | Amounts are shown net of shares withheld for employee taxes. |
2 | Relates to our adoption of ASU 2016-02, Leases, in fiscal 2019. See Note A. |
In thousands, except per share amounts | May 3, 2020 | | February 2, 2020 | May 5, 2019 | ||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 861,002 | $ | 432,162 | $ | 107,683 | ||||||
Accounts receivable, net | 104,829 | 111,737 | 102,195 | |||||||||
Merchandise inventories, net | 1,070,681 | 1,100,544 | 1,155,427 | |||||||||
Prepaid expenses | 90,433 | 90,426 | 98,213 | |||||||||
Other current assets | 22,099 | 20,766 | 22,128 | |||||||||
Total current assets | 2,149,044 | 1,755,635 | 1,485,646 | |||||||||
Property and equipment, net | 907,219 | 929,038 | 916,030 | |||||||||
Operating lease right-of-use assets | 1,175,402 | 1,166,383 | 1,200,972 | |||||||||
Deferred income taxes, net | 33,320 | 47,977 | 34,215 | |||||||||
Goodwill | 85,335 | 85,343 | 85,357 | |||||||||
Other long-term assets, net | 67,795 | 69,666 | 66,145 | |||||||||
Total assets | $ | 4,418,115 | $ | 4,054,042 | $ | 3,788,365 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 423,375 | $ | 521,235 | $ | 385,646 | ||||||
Accrued expenses | 137,495 | 175,003 | 109,169 | |||||||||
Gift card and other deferred revenue | 299,353 | 289,613 | 291,839 | |||||||||
Income taxes payable | 24,049 | 22,501 | 24,384 | |||||||||
Current debt | 487,823 | 299,818 | — | |||||||||
Operating lease liabilities | 224,541 | 227,923 | 227,427 | |||||||||
Other current liabilities | 85,458 | 73,462 | 75,750 | |||||||||
Total current liabilities | 1,682,094 | 1,609,555 | 1,114,215 | |||||||||
Deferred rent and lease incentives | 26,254 | 27,659 | 30,536 | |||||||||
Long-term debt | 299,868 | — | 299,670 | |||||||||
Long-term operating lease liabilities | 1,109,473 | 1,094,579 | 1,139,625 | |||||||||
Other long-term liabilities | 81,497 | 86,389 | 82,551 | |||||||||
Total liabilities | 3,199,186 | 2,818,182 | 2,666,597 | |||||||||
Commitments and contingencies – See Note F | ||||||||||||
Stockholders’ equity | ||||||||||||
Preferred stock: $.01 par value; 7,500 shares authorized; NaN issued | — | — | — | |||||||||
Common stock: $.01 par value; 253,125 shares authorized; 77,759, 77,137 and 78,808 shares issued and outstanding at May 3, 2020, February 2, 2020 and May 5, 2019, respectively | 778 | 772 | 788 | |||||||||
Additional paid-in capital | 596,184 | 605,822 | 571,772 | |||||||||
Retained earnings | 641,917 | 644,794 | 564,127 | |||||||||
Accumulated other comprehensive loss | (19,351 | ) | (14,587 | ) | (13,945 | ) | ||||||
Treasury stock, at cost: 8, 14 and 14 shares as of May 3, 2020, February 2, 2020 and May 5, 2019, respectively | (599 | ) | (941 | ) | (974 | ) | ||||||
Total stockholders’ equity | 1,218,929 | 1,235,860 | 1,121,768 | |||||||||
Total liabilities and stockholders’ equity | $ | 4,418,115 | $ | 4,054,042 | $ | 3,788,365 |
Twenty-six Weeks Ended | ||||||||
In thousands | August 2, 2020 | August 4, 2019 | ||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 169,987 | $ | 115,304 | ||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 93,120 | 93,744 | ||||||
(Gain) loss on disposal/impairment of assets | 25,408 | (6 | ) | |||||
Amortization of deferred lease incentives | (2,975 | ) | (4,228 | ) | ||||
Non-cash lease expense | 108,448 | 105,437 | ||||||
Deferred income taxes | (2,229 | ) | (8,428 | ) | ||||
Tax benefit related to stock-based awards | 12,694 | 14,110 | ||||||
Stock-based compensation expense | 33,395 | 35,401 | ||||||
Other | 255 | 92 | ||||||
Changes in: | ||||||||
Accounts receivable | (16,740 | ) | (4,430 | ) | ||||
Merchandise inventories | 60,055 | (63,576 | ) | |||||
Prepaid expenses and other assets | (30,968 | ) | (24,506 | ) | ||||
Accounts payable | (141,602 | ) | (127,511 | ) | ||||
Accrued expenses and other liabilities | 12,117 | (30,677 | ) | |||||
Gift card and other deferred revenue | 2,936 | (7,173 | ) | |||||
Operating lease liabilities | (113,489 | ) | (111,782 | ) | ||||
Income taxes payable | 5,988 | (8,407 | ) | |||||
Net cash provided by (used in) operating activities | 216,400 | (26,636 | ) | |||||
�� | ||||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (76,123 | ) | (77,189 | ) | ||||
Other | 241 | 470 | ||||||
Net cash used in investing activities | (75,882 | ) | (76,719 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving line of credit | 487,823 | 60,000 | ||||||
Payment of dividends | (79,274 | ) | (75,453 | ) | ||||
Tax withholdings related to stock-based awards | (29,589 | ) | (25,887 | ) | ||||
Debt issuance costs | (1,050 | ) | — | |||||
Repurchases of common stock | — | (72,131 | ) | |||||
Net cash provided by (used in) financing activities | 377,910 | (113,471 | ) | |||||
Effect of exchange rates on cash and cash equivalents | (2,830 | ) | (1,661 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 515,598 | (218,487 | ) | |||||
Cash and cash equivalents at beginning of period | 432,162 | 338,954 | ||||||
Cash and cash equivalents at end of period | $ | 947,760 | $ | 120,467 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||
In thousands | Shares | Amount | ||||||||||||||||||||||||||
Balance at February 2, 2020 | 77,137 | $ | 772 | $ | 605,822 | $ | 644,794 | $ | (14,587 | ) | $ | (941 | ) | $ | 1,235,860 | |||||||||||||
Net earnings | — | — | — | 35,423 | — | — | 35,423 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (5,276 | ) | — | (5,276 | ) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | 549 | — | 549 | |||||||||||||||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments, net of tax | — | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 622 | 6 | (28,747 | ) | — | — | (171 | ) | (28,912 | ) | ||||||||||||||||||
Reissuance of treasury stock under stock-based compensation plans 1 | — | — | (499 | ) | (14 | ) | — | 513 | — | |||||||||||||||||||
Stock-based compensation expense | — | — | 19,608 | — | — | — | 19,608 | |||||||||||||||||||||
Dividends declared | — | — | — | (38,286 | ) | — | — | (38,286 | ) | |||||||||||||||||||
Balance at May 3, 2020 | 77,759 | $ | 778 | $ | 596,184 | $ | 641,917 | $ | (19,351 | ) | $ | (599 | ) | $ | 1,218,929 | |||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||
In thousands | Shares | Amount | ||||||||||||||||||||||||||
Balance at February 3, 2019 | 78,813 | $ | 789 | $ | 581,900 | $ | 584,333 | $ | (11,073 | ) | $ | (235 | ) | $ | 1,155,714 | |||||||||||||
Net earnings | — | — | — | 52,656 | — | — | 52,656 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (3,009 | ) | — | (3,009 | ) | |||||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | — | — | — | — | 204 | — | 204 | |||||||||||||||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments, net of tax | — | — | — | — | (67 | ) | — | (67 | ) | |||||||||||||||||||
Conversion/release of stock-based awards 1 | 571 | 5 | (25,298 | ) | — | — | (113 | ) | (25,406 | ) | ||||||||||||||||||
Repurchases of common stock | (576 | ) | (6 | ) | (2,874 | ) | (30,010 | ) | — | (958 | ) | (33,848 | ) | |||||||||||||||
Reissuance of treasury stock under stock-based compensation plans 1 | — | — | (332 | ) | — | — | 332 | — | ||||||||||||||||||||
Stock-based compensation expense | — | — | 18,376 | — | — | — | 18,376 | |||||||||||||||||||||
Dividends declared | — | — | — | (39,549 | ) | — | — | (39,549 | ) | |||||||||||||||||||
Adoption of accounting pronouncements 2 | — | — | — | (3,303 | ) | — | — | (3,303 | ) | |||||||||||||||||||
Balance at May 5, 2019 | 78,808 | $ | 788 | $ | 571,772 | $ | 564,127 | $ | (13,945 | ) | $ | (974 | ) | $ | 1,121,768 |
Thirteen Weeks Ended | ||||||||
In thousands | May 3, 2020 | May 5, 2019 | ||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 35,423 | $ | 52,656 | ||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 46,224 | 46,838 | ||||||
(Gain) loss on disposal/impairment of assets | 16,185 | (323 | ) | |||||
Amortization of deferred lease incentives | (1,405 | ) | (2,306 | ) | ||||
Non-cash lease expense | 54,262 | 51,596 | ||||||
Deferred income taxes | (2,585 | ) | (4,126 | ) | ||||
Tax benefit related to stock-based awards | 12,039 | 14,898 | ||||||
Stock-based compensation expense | 19,703 | 18,529 | ||||||
Other | 129 | 69 | ||||||
Changes in: | ||||||||
Accounts receivable | 8,950 | 4,684 | ||||||
Merchandise inventories | 28,513 | (31,460 | ) | |||||
Prepaid expenses and other assets | (215 | ) | (4,914 | ) | ||||
Accounts payable | (92,871 | ) | (144,399 | ) | ||||
Accrued expenses and other liabilities | (29,050 | ) | (49,196 | ) | ||||
Gift card and other deferred revenue | 9,960 | 1,558 | ||||||
Operating lease liabilities | (57,629 | ) | (55,099 | ) | ||||
Income taxes payable | 6,240 | 2,915 | ||||||
Net cash provided by (used in) operating activities | 53,873 | (98,080 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (42,321 | ) | (36,148 | ) | ||||
Other | 242 | 107 | ||||||
Net cash used in investing activities | (42,079 | ) | (36,041 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under revolving line of credit | 487,823 | — | ||||||
Payment of dividends | (39,391 | ) | (36,868 | ) | ||||
Tax withholdings related to stock-based awards | (28,912 | ) | (25,406 | ) | ||||
Repurchases of common stock | — | (33,848 | ) | |||||
Net cash provided by (used in) financing activities | 419,520 | (96,122 | ) | |||||
Effect of exchange rates on cash and cash equivalents | (2,474 | ) | (1,028 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 428,840 | (231,271 | ) | |||||
Cash and cash equivalents at beginning of period | 432,162 | 338,954 | ||||||
Cash and cash equivalents at end of period | $ | 861,002 | $ | 107,683 |
Shares | |||||
Balance at February 2, 2020 | 2,884,194 | ||||
Granted 1 | |||||
Released 2 | ( | ) | |||
Cancelled | ( | ) | |||
Balance at August 2, 2020 | 2,910,856 | ||||
Vested plus expected to vest at | 2,356,233 |
1 | Excludes 267,000 restricted stock units for which the accounting grant date had not yet been determined | as of August 2,2020 and, consequently, for which no expense has been recognized for the twenty-six weeks then ended | . These awards reduced the shares available for future grant under the Plan. |
2 | Excludes incremental shares |
In thousands, except per share amounts | Net Earnings | Weighted Average Shares | Earnings Per Share | |||||||||
Thirteen weeks ended May 3, 2020 | ||||||||||||
Basic | $ | 35,423 | 77,262 | $ | 0.46 | |||||||
Effect of dilutive stock-based awards | 1,137 | |||||||||||
Diluted | $ | 35,423 | 78,399 | $ | 0.45 | |||||||
Thirteen weeks ended May 5, 2019 | ||||||||||||
Basic | $ | 52,656 | 78,683 | $ | 0.67 | |||||||
Effect of dilutive stock-based awards | 1,184 | |||||||||||
Diluted | $ | 52,656 | 79,867 | $ | 0.66 |
In thousands, except per share amounts | Net Earnings | Weighted Average Shares | Earnings Per Share | |||||||||
Thirteen weeks ended August 2, 2020 | ||||||||||||
Basic | $ | 134,564 | 77,783 | $ | 1.73 | |||||||
Effect of dilutive stock-based awards | 1,481 | |||||||||||
Diluted | $ | 134,564 | 79,264 | $ | 1.70 | |||||||
Thirteen weeks ended August 4, 2019 | ||||||||||||
Basic | $ | 62,648 | 78,488 | $ | 0.80 | |||||||
Effect of dilutive stock-based awards | 982 | |||||||||||
Diluted | $ | 62,648 | 79,470 | $ | 0.79 | |||||||
Twenty-six weeks ended August 2, 2020 | ||||||||||||
Basic | $ | 169,987 | 77,522 | $ | 2.19 | |||||||
Effect of dilutive stock-based awards | 1,319 | |||||||||||
Diluted | $ | 169,987 | 78,841 | $ | 2.16 | |||||||
Twenty-six weeks ended August 4, 2019 | ||||||||||||
Basic | $ | 115,304 | 78,586 | $ | 1.47 | |||||||
Effect of dilutive stock-based awards | 1,047 | |||||||||||
Diluted | $ | 115,304 | 79,633 | $ | 1.45 |
Thirteen Weeks Ended | ||||||||||||||||||||||||
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||||||||||
In thousands | May 3, 2020 | May 5, 2019 | August 2, 2020 | August 4, 2019 | August 2, 2020 | August 4, 2019 | ||||||||||||||||||
Pottery Barn | $ | 479,615 | $ | 492,126 | $ | 563,276 | $ | 524,847 | $ | 1,042,891 | $ | 1,016,973 | ||||||||||||
West Elm | 315,430 | 309,483 | 380,552 | 357,574 | 695,982 | 667,057 | ||||||||||||||||||
Williams Sonoma | 199,302 | 194,894 | 243,133 | 191,374 | 442,435 | 386,267 | ||||||||||||||||||
Pottery Barn Kids and Teen | 188,552 | 177,046 | 235,987 | 227,853 | 424,539 | 404,899 | ||||||||||||||||||
Other 1 | 52,304 | 67,583 | 67,829 | 69,166 | 120,133 | 136,750 | ||||||||||||||||||
Total 2 | $ | 1,235,203 | $ | 1,241,132 | $ | 1,490,777 | $ | 1,370,814 | $ | 2,725,980 | $ | 2,611,946 |
1 | Primarily consists of net revenues from our international franchise operations, Rejuvenation and Mark and . |
2 | Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately million and million for the thirteen weeks ended million and $174.3 million for the twenty-six weeks ended August 2, 2020 and August 4, 2019, respectively. |
In thousands | May 3, 2020 | May 5, 2019 | ||||||
U.S. | $ | 2,117,469 | $ | 2,136,000 | ||||
International | 151,602 | 166,719 | ||||||
Total | $ | 2,269,071 | $ | 2,302,719 |
In thousands | August 2, 2020 | August 4, 2019 | ||||||
U.S. | $ | 2,076,079 | $ | 2,146,995 | ||||
International | 155,787 | 164,667 | ||||||
Total | $ | 2,231,866 | $ | 2,311,662 |
In thousands | May 3, 2020 | May 5, 2019 | ||||||
Contracts designated as cash flow hedges | $ | 11,600 | $ | 10,800 | ||||
Contracts not designated as cash flow hedges | $ | — | $ | — |
In thousands | August 2, 2020 | August 4, 2019 | ||||||
Contracts designated as cash flow hedges | $ | 6,800 | $ | 6,000 |
In thousands | May 3, 2020 | May 5, 2019 | ||||||
Net gain recognized in OCI | $ | 745 | $ | 278 |
May 3, 2020 | May 5, 2019 | |||||||||||||||
In thousands | Cost of goods sold | Selling, general and administrative expenses | Cost of goods sold | Selling, general and administrative expenses | ||||||||||||
Line items presented in the Condensed Consolidated Statement of Earnings in which the effects of derivatives are recorded | $ | 820,943 | $ | 365,615 | $ | 796,801 | $ | 370,199 | ||||||||
Gain (loss) recognized in income | ||||||||||||||||
Derivatives designated as cash flow hedges | $ | 50 | $ | — | $ | 108 | $ | — | ||||||||
Derivatives not designated as hedging instruments | $ | — | $ | 2 | $ | — | $ | (6 | ) |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||||||||||||||||||
August 2, 2020 | August 4, 2019 | August 2, 2020 | August 4, 2019 | |||||||||||||||||||||||||||||
In thousands | Cost of goods sold | Selling, general and administrative expenses | Cost of goods sold | Selling, general and administrative expenses | Cost of goods sold | Selling, general and administrative expenses | Cost of goods sold | Selling, general and administrative expenses | ||||||||||||||||||||||||
Line items presented in the Condensed Consolidated Statement of Earnings in which the effects of derivatives are recorded | $ | 939,575 | $ | 365,841 | $ | 886,953 | $ | 397,696 | $ | 1,760,518 | $ | 731,456 | $ | 1,683,754 | $ | 767,895 | ||||||||||||||||
Gain (loss) recognized in income | ||||||||||||||||||||||||||||||||
Derivatives designated as cash flow hedges | $ | 145 | $ | — | $ | 187 | $ | — | $ | 195 | $ | — | $ | 295 | $ | — | ||||||||||||||||
Derivatives not designated as hedging instruments | $ | — | $ | — | $ | — | $ | 24 | $ | — | $ | 2 | $ | — | $ | 18 | ||||||||||||||||
In thousands | May 3, 2020 | May 5, 2019 | August 2, 2020 | August 4, 2019 | ||||||||||||
Derivatives designated as cash flow hedges: | ||||||||||||||||
Other current assets | $ | 698 | $ | 475 | $ | 150 | $ | 142 | ||||||||
• | 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. |
In thousands | Foreign Currency Translation | Cash Flow Hedges | Accumulated Other Comprehensive Income (Loss) | |||||||||
Balance at February 2, 2020 | $ | (14,593 | ) | $ | 6 | $ | (14,587 | ) | ||||
Foreign currency translation adjustments | (5,276 | ) | — | (5,276 | ) | |||||||
Change in fair value of derivative financial instruments | — | 549 | 549 | |||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments 1 | — | (37 | ) | (37 | ) | |||||||
Other comprehensive income (loss) | (5,276 | ) | 512 | (4,764 | ) | |||||||
Balance at May 3, 2020 | $ | (19,869 | ) | $ | 518 | $ | (19,351 | ) | ||||
Balance at February 3, 2019 | $ | (11,259 | ) | $ | 186 | $ | (11,073 | ) | ||||
Foreign currency translation adjustments | (3,009 | ) | — | (3,009 | ) | |||||||
Change in fair value of derivative financial instruments | — | 204 | 204 | |||||||||
Reclassification adjustment for realized (gain) on derivative financial instruments 1 | — | (67 | ) | (67 | ) | |||||||
Other comprehensive income (loss) | (3,009 | ) | 137 | (2,872 | ) | |||||||
Balance at May 5, 2019 | $ | (14,268 | ) | $ | 323 | $ | (13,945 | ) |
In thousands | Foreign Currency Translation | Cash Flow Hedges | Accumulated Other Comprehensive Income (Loss) | |||||||||
Balance at February 2, 2020 | $ | (14,593 | ) | $ | 6 | $ | (14,587 | ) | ||||
Foreign currency translation adjustments | (5,276 | ) | — | (5,276 | ) | |||||||
Change in fair value of derivative financial instruments | — | 549 | 549 | |||||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 | — | (37 | ) | (37 | ) | |||||||
Other comprehensive income (loss) | (5,276 | ) | 512 | (4,764 | ) | |||||||
Balance at May 3, 2020 | (19,869 | ) | 518 | (19,351 | ) | |||||||
Foreign currency translation adjustments | 6,737 | 0 | 6,737 | |||||||||
Change in fair value of derivative financial instruments | — | (200 | ) | (200 | ) | |||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 | — | (107 | ) | (107 | ) | |||||||
Other comprehensive income (loss) | 6,737 | (307 | ) | 6,430 | ||||||||
Balance at August 2, 2020 | $ | (13,132 | ) | $ | 211 | $ | (12,921 | ) | ||||
Balance at February 3, 2019 | $ | (11,259 | ) | $ | 186 | $ | (11,073 | ) | ||||
Foreign currency translation adjustments | (3,009 | ) | 0 | (3,009 | ) | |||||||
Change in fair value of derivative financial instruments | — | 204 | 204 |
In thousands | Foreign Currency Translation | Cash Flow Hedges | Accumulated Other Comprehensive Income (Loss) | |||||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 | — | (67 | ) | (67 | ) | |||||||
Other comprehensive income (loss) | (3,009 | ) | 137 | (2,872 | ) | |||||||
Balance at May 5, 2019 | (14,268 | ) | 323 | (13,945 | ) | |||||||
Foreign currency translation adjustments | (1,251 | ) | — | (1,251 | ) | |||||||
Change in fair value of derivative financial instruments | — | (132 | ) | (132 | ) | |||||||
Reclassification adjustment for realized (gain) loss on derivative financial instruments 1 | — | (160 | ) | (160 | ) | |||||||
Other comprehensive income (loss) | (1,251 | ) | (292 | ) | (1,543 | ) | ||||||
Balance at August 4, 2019 | $ | (15,519 | ) | $ | 31 | $ | (15,488 | ) |
1 | Refer to Note H for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Condensed Consolidated Statements of Earnings. |
Thirteen Weeks Ended | ||||||||
Comparable brand revenue growth (decline) | May 3, 2020 | May 5, 2019 | ||||||
Pottery Barn | (1.1 | %) | 1.5 | % | ||||
West Elm | 3.3 | % | 11.8 | % | ||||
Williams Sonoma | 5.4 | % | (1.6 | %) | ||||
Pottery Barn Kids and Teen | 8.5 | % | 1.2 | % | ||||
Total 1 | 2.6 | % | 3.5 | % |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||
Comparable brand revenue growth (decline) | August 2, 2020 | August 4, 2019 | August 2, 2020 | August 4, 2019 | ||||||||||||
Pottery Barn | 8.1 | % | 4.2 | % | 3.6 | % | 2.9 | % | ||||||||
West Elm | 7.0 | % | 17.5 | % | 5.3 | % | 14.8 | % | ||||||||
Williams Sonoma | 29.4 | % | (1.1 | %) | 17.4 | % | (1.3 | %) | ||||||||
Pottery Barn Kids and Teen | 4.8 | % | 3.7 | % | 6.4 | % | 2.6 | % | ||||||||
Total 1 | 10.5 | % | 6.5 | % | 6.7 | % | 5.1 | % |
1 | Total comparable brand revenue growth includes the results of Rejuvenation and Mark and Graham. |
Store Count | Average Leased Square Footage Per Store | |||||||||||||||||||||||||||
May 3, 2020 1 | Openings | Closings | August 2, 2020 1 | August 4, 2019 | August 2, 2020 | August 4, 2019 | ||||||||||||||||||||||
Williams Sonoma | 212 | — | (2 | ) | 210 | 218 | 6,800 | 6,800 | ||||||||||||||||||||
Pottery Barn | 201 | — | — | 201 | 205 | 14,400 | 14,400 | |||||||||||||||||||||
West Elm | 119 | 3 | (1 | ) | 121 | 112 | 13,200 | 13,100 | ||||||||||||||||||||
Pottery Barn Kids | 74 | — | (2 | ) | 72 | 78 | 7,800 | 7,500 | ||||||||||||||||||||
Rejuvenation | 10 | — | — | 10 | 10 | 8,500 | 8,500 | |||||||||||||||||||||
Total | 616 | 3 | (5 | ) | 614 | 623 | 10,700 | 10,600 |
Store Count | Average Leased Square Footage Per Store | |||||||||||||||||||||
May 3, 2020 1 | Openings | Closings | August 2, 2020 1 | August 4, 2019 | August 2, 2020 | August 4, 2019 | ||||||||||||||||
Store selling square footage at period-end | 4,145,000 | 4,124,000 | ||||||||||||||||||||
Store leased square footage at period-end | 6,571,000 | 6,587,000 |
Store Count | Average Leased Square Footage Per Store | |||||||||||||||||||||||||||
February 2, 2020 | Openings | Closings | May 3, 2020 1 | May 5, 2019 | May 3, 2020 | May 5, 2019 | ||||||||||||||||||||||
Williams Sonoma | 211 | 1 | — | 212 | 219 | 6,900 | 6,800 | |||||||||||||||||||||
Pottery Barn | 201 | — | — | 201 | 205 | 14,400 | 14,100 | |||||||||||||||||||||
West Elm | 118 | 2 | (1 | ) | 119 | 113 | 13,200 | 13,100 | ||||||||||||||||||||
Pottery Barn Kids | 74 | — | — | 74 | 78 | 7,700 | 7,500 | |||||||||||||||||||||
Rejuvenation | 10 | — | — | 10 | 10 | 8,500 | 8,500 | |||||||||||||||||||||
Total | 614 | 3 | (1 | ) | 616 | 625 | 10,700 | 10,500 | ||||||||||||||||||||
Store selling square footage at period-end | 4,148,000 | 4,094,000 | ||||||||||||||||||||||||||
Store leased square footage at period-end | 6,580,000 | 6,549,000 |
1 | Store counts as of August 2, 2020 and May 3,2020 do not COVID-19. |
Thirteen Weeks Ended | ||||||||||||||||
In thousands | May 3, 2020 | % Net Revenues | May 5, 2019 | % Net Revenues | ||||||||||||
Cost of goods sold 1 | $ | 820,943 | 66.5 | % | $ | 796,801 | 64.2 | % |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||||||||||||||||||
In thousands | August 2, 2020 | % Net Revenues | August 4, 2019 | % Net Revenues | August 2, 2020 | % Net Revenues | August 4, 2019 | % Net Revenues | ||||||||||||||||||||||||
Cost of goods sold 1 | $ | 939,575 | 63.0 | % | $ | 886,953 | 64.7 | % | $ | 1,760,518 | 64.6 | % | $ | 1,683,754 | 64.5 | % |
1 | Includes total occupancy expenses of year-to-date year-to-date |
Thirteen Weeks Ended | ||||||||||||||||
In thousands | May 3, 2020 | % Net Revenues | May 5, 2019 | % Net Revenues | ||||||||||||
Selling, general and administrative expenses | $ | 365,615 | 29.6 | % | $ | 370,199 | 29.8 | % |
Thirteen Weeks Ended | Twenty-six Weeks Ended | |||||||||||||||||||||||||||||||
In thousands | August 2, 2020 | % Net Revenues | August 4, 2019 | % Net Revenues | August 2, 2020 | % Net Revenues | August 4, 2019 | % Net Revenues | ||||||||||||||||||||||||
Selling, general and administrative expenses | $ | 365,841 | 24.5 | % | $ | 397,696 | 29.0 | % | $ | 731,456 | 26.8 | % | $ | 767,895 | 29.4 | % |
* | Filed herewith. |
WILLIAMS-SONOMA, INC. | ||
By: | ||
/s/ Julie Whalen | ||
Julie Whalen | ||
Duly Authorized Officer and Chief Financial Officer |