May 6, 2019
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
Office of Consumer Products
100 F Street, NE
Washington, DC 20549
Attention: | Tony Watson, Accountant |
Re: | Williams-Sonoma, Inc. |
Ladies and Gentlemen:
Williams-Sonoma, Inc. (the “Company”) is submitting this letter in response to the comment letter dated April 30, 2019 (the “Comment Letter”) from the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”) regarding the Staff’s review of the Company’s Form8-K filed March 20, 2019.
For your convenience, the Staff’s comment has been repeated below in its entirety, with the Company’s response set out immediately underneath it. The heading and numbered response in this response letter correspond to the heading and numbered comment contained in the Comment Letter.
Form8-K filed March 20, 2019
Non-GAAP Reconciliations, page 8
1. | Please tell us your consideration of the guidance in the answer to Question 102.10 of theNon-GAAP Financial Measures section of our Compliance Disclosure and Interpretations related to your presentation of fullnon-GAAP income statements. |
Response: In response to the Staff’s comment, the Company respectfully advises the Staff that it had not previously considered thenon-GAAP reconciliations on page 8 to be a fullnon-GAAP income statement, as the reconciliations do not include certain line items from the Company’s GAAP income statement. However, the Company acknowledges the Staff’s comment and will revise its disclosure accordingly going forward to ensure that futurenon-GAAP reconciliations in the Company’s earnings releases do not constitute a fullnon-GAAP income statement. Attached please find an example of how the Company intends to present futurenon-GAAP reconciliations, using Q4 2018 numbers for illustrative purposes.
Securities and Exchange Commission
Attn: | Tony Watson, Accountant |
May 6, 2019
Page 2
Should the Staff have any additional comments or questions, please contact me at (415)616-8524 or David King at (415)616-8478. The Company respectfully requests that the Staff confirm that it has no additional requests or comments when the Staff’s review is complete.
Sincerely,
/s/ Julie Whalen
Julie Whalen
Executive Vice President,
Chief Financial Officer
cc: | David King – Executive Vice President, General Counsel and Secretary |
Brett Cooper – Orrick, Herrington & Sutcliffe LLP
Attachment
-2-
Exhibit 1
4th Quarter GAAP to Non-GAAP Reconciliation (unaudited)
Fourteen Weeks Ended February 3, 2019
(Dollars in thousands, except per share data)
$ | % of revenues | |||||||
Selling, general and administrative expenses | $ | 509,070 | 27.7% | |||||
Outward-related1 | (6,918 | ) | ||||||
Employment-related expense2 | (2,543 | ) | ||||||
Tax legislation3 | (269 | ) | ||||||
Impairment and early termination charges4 | (5,995 | ) | ||||||
| ||||||||
Non-GAAP selling, general and administrative expenses | $ | 493,345 | 26.9% | |||||
| ||||||||
$ | % of revenues | |||||||
Operating income | $ | 200,853 | 10.9% | |||||
Outward-related1 | 7,242 | |||||||
Employment-related expense2 | 2,543 | |||||||
Tax legislation3 | 269 | |||||||
Impairment and early termination charges4 | 6,762 | |||||||
| ||||||||
Non-GAAP operating income | $ | 217,669 | 11.9% | |||||
| ||||||||
$ | Tax rate | |||||||
Income taxes | $ | 43,882 | 22.0% | |||||
Outward-related1 | 846 | |||||||
Employment-related expense2 | 584 | |||||||
Tax legislation3 | (254 | ) | ||||||
Impairment and early termination charges4 | 1,588 | |||||||
| ||||||||
Non-GAAP income taxes | $ | 46,646 | 21.6% | |||||
| ||||||||
$ | ||||||||
Diluted EPS | $ | 1.93 | ||||||
Outward-related1 | 0.08 | |||||||
Employment-related expense2 | 0.02 | |||||||
Tax legislation3 | 0.01 | |||||||
Impairment and early termination charges4 | 0.06 | |||||||
| ||||||||
Non-GAAP Diluted EPS* | $ | 2.10 | ||||||
|
* Per share amounts may not sum due to rounding to the nearest cent per diluted share
Notes to Exhibit 1:
1 During Q4 18 we incurred approximately $7.2 million of expense, primarily associated with acquisition-related compensation expense, amortization of intangible assets, as well as the operations of Outward, Inc, of which $6.9 million was recorded within selling, general and administrative expenses.
2 During Q4 18 we incurred approximately $2.5 million of employment-related expense primarily associated with a one-time special equity grant, which was recorded within selling, general and administrative expenses.
3 During Q4 18, we incurred approximately $0.3 million in expenses associated with tax legislation changes, which was recorded within selling, general and administrative expenses.
4 During Q4 18, we incurred approximately $6.8 million of expense, primarily associated with store impairment and early lease termination charges, of which $6.0 million was recorded within selling, general and administrative expenses. |