Williams-Sonoma, Inc. Announces Operating Results and Dividends

March 16, 2023  by HFBusiness Staff in Business Strategy, Industry   

“At Williams-Sonoma, Inc., we are proud that, despite the declining macro environment, we delivered another record year of revenue, with a comp of 6.5% on the topline, and record earnings of $16.54 per share.”

“With our relentless focus on customer service and profitable growth, we continue to outperform our peers, gain market share, and distinguish ourselves as the world's largest digital-first, design-led, sustainable home retailer,” said Laura Alber, president and CEO.

FOURTH QUARTER 2022 HIGHLIGHTS

+  Comparable brand revenue declined 0.6% with a 2-year comp of over 10% and a 3-year comp of 36%.

+  Delivered a gross margin of 41.2%, deleveraging 380bps, primarily driven by higher inbound and outbound shipping and freight costs with occupancy deleverage of 60bps. Occupancy costs increased 5.4% to $204 million.

+  Leveraged SG&A 200bps on a GAAP basis and 270bps on a non-GAAP basis to 21.3%, reflecting employment and advertising leverage, and insurance proceeds.

+  Delivered a GAAP operating margin of 19.2% and non-GAAP operating margin of 19.9%.

+  Increased non-GAAP EPS 1.5% with GAAP diluted EPS of $5.28 and non-GAAP diluted EPS of $5.50.

FISCAL YEAR 2022 HIGHLIGHTS

+  Grew comparable brand revenue 6.5% with a 2-year comp of over 28% and a 3-year comp of over 45%.

+  Delivered gross margin of 42.4%, deleveraging 160bps, primarily driven by higher shipping and freight costs, with merchandise margins flat to last year. Occupancy costs increased 7.9% to $785.4 million.

+  Leveraged SG&A 130bps on a GAAP basis and 140bps on a non-GAAP basis to 24.9%, reflecting employment and advertising leverage.

+  Delivered GAAP operating margin of 17.3%; non-GAAP operating margin of 17.5%, only down 20bps to last year's record high rate.

+  Increased EPS 11% with GAAP diluted EPS of $16.32 and non-GAAP diluted EPS of $16.54.

+  Delivered ROIC of 49.4% driven by record earnings.

+  Maintained strong liquidity position of $367 million in cash and over $1.0 billion in operating cash flow enabling the company to deliver strong returns to shareholders of $1.1 billion through $217 million in dividends and $880 million in share repurchases.

Alber concluded, “As we look to the long-term, we are confident in our continued ability to take market share, and to do so, profitably. With our culture of innovation and talent, our values, and the strength of our team, we're moving ahead with our vision of furnishing our customers everywhere.”

“As we do, we are confident that we will continue to deliver for all our customers, employees and shareholders.”

DIVIDENDS AND SHARE REPURCHASE AUTHORIZATIONS

• Increased our quarterly dividend 15%, or $0.12, to $0.90 per share.
• Expanded our stock buy-back capacity to $1 billion.

OUTLOOK

• In fiscal 2023, we expect annual net revenue growth in the range of -3% to +3% with an operating margin between 14% to 15%.
• In the long-term, we expect mid-to-high single-digit annual net revenue growth with operating margin above 15%.

CONFERENCE CALL AND WEBCAST INFORMATION

A replay of the webcast where the results were released will be available at http://ir.williams-sonomainc.com/events.