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Exhibit 99.1

 

LOGO

3250 Van Ness Avenue

San Francisco, CA 94109

 

  

CONTACT:

Julie P. Whalen

EVP, Chief Financial Officer

(415) 616-8524

 

Gabrielle L. Rabinovitch

Director, Investor Relations

(415) 616-7727

PRESS RELEASE

Williams-Sonoma, Inc. announces 4th quarter and fiscal year 2013 results

4th quarter 2013 comparable brand revenues grow 10.4%, EPS increases to $1.38

Williams-Sonoma, Inc. provides financial guidance for fiscal year 2014

Authorizes $0.02, or 6%, quarterly dividend increase to $0.33 per common share

San Francisco, CA, March 12, 2014 – Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the fourth quarter of fiscal 2013 (Q4 13) and fiscal year ended February 2, 2014 (FY 13). Q4 13 included 13 weeks versus 14 weeks in the fourth quarter of fiscal 2012 ended February 3, 2013 (Q4 12). FY 13 included 52 weeks versus 53 weeks in the fiscal year ended February 3, 2013 (FY 12).

In Q4 12 and FY 12, the additional week contributed approximately $70 million in net revenues and an estimated $0.07 benefit to diluted earnings per share (EPS).

Laura Alber, President and Chief Executive Officer, commented, “Williams-Sonoma, Inc. outperformed the retail industry this holiday season, gaining market share and demonstrating the structural advantage of our multi-brand, multi-channel platform. The strength of our brands across retail and e-commerce, in conjunction with disciplined execution, enabled our team to drive record operating results.”

RELEASE HIGHLIGHTS

4th Quarter 2013

 

  Q4 13 net revenues grew to $1.466 billion versus $1.406 billion in Q4 12 with comparable brand revenue growth of 10.4%.

 

  Q4 13 operating income grew to $218 million and operating margin was 14.8%.

 

  Q4 13 EPS grew to $1.38.

Fiscal Year 2013

 

  FY 13 net revenues increased to $4.388 billion versus $4.043 billion in FY 12 with comparable brand revenue growth of 8.8%.

 

  FY 13 operating income grew to $452 million and operating margin was 10.3%. Excluding unusual business events, non-GAAP operating income increased to $455 million and non-GAAP operating margin was 10.4%.

 

  FY 13 EPS grew to $2.82. Excluding unusual business events, non-GAAP EPS increased to $2.84.

 

  Cash returned to stockholders totaled $351 million, comprising $239 million in stock repurchases and $112 million in dividends.


Alber continued, “Throughout the year we kept our focus on the customer by providing a differentiated and highly relevant experience. At the same time, we executed our strategic plan, investing in our brands and the supporting infrastructure to ensure sustainable long-term growth both domestically and around the world. The results speak for themselves: we delivered strong top and bottom line performance, which combined with over $350 million in share repurchases and dividends generated superior returns for our stockholders.”

Alber concluded, “These results confirm that our key strategies are working, and position us well for 2014 and beyond. In all of our brands we develop product that is inspiring, relevant, high quality and competitively priced. We believe that our lifestyle merchandising approach, together with our high-touch service model, separates us from commoditized offerings as we help our customers decorate, entertain, and create the homes of their dreams. Our multi-channel marketing, built from decades of data analytics experience, enables us to reach our customers and attract new ones in increasingly relevant ways. Our e-commerce business, which represented 44% of our net revenues in fiscal 2013, is growing rapidly, allowing us to capture even greater market share as more consumers transition to online shopping in our categories. Our vertically integrated supply chain is enabling us to deliver exceptional quality and value to our customers. Underlying all of these initiatives is our culture of strong financial discipline, integrity, and a commitment to social responsibility. We remain confident in our brands, our leadership team, and our ability to execute our plan. We look forward to continuing to deliver long-term value for our stockholders.”

4th QUARTER 2013 RESULTS

Net revenues increased to $1.466 billion in Q4 13 from $1.406 billion in Q4 12. Excluding the additional week in Q4 12, net revenues grew 10.0%.

Comparable brand revenue growth in Q4 13 increased 10.4% on top of 4.0% in Q4 12 as shown in the table below:

 

4th Quarter Comparable Brand Revenue Growth by Concept*

 

      Q4 13     Q4 12  

  Pottery Barn

     14.6     4.0%    

  Williams-Sonoma

     2.3     (1.7%)   

  Pottery Barn Kids

     11.2     7.7%    

  West Elm

     18.3     19.1%    

  PBteen

     9.6     6.4%    

  Total

     10.4     4.0%    

 

 

* See the company’s 10-K and 10-Q filings for the definition of comparable brand revenue growth.

Direct-to-customer (DTC) net revenues in Q4 13 increased to $706 million from $634 million in Q4 12. Excluding the additional week in Q4 12, DTC net revenues grew 19.0%, primarily driven by Pottery Barn, Pottery Barn Kids, West Elm and Williams-Sonoma. DTC net revenues generated 48% of total company net revenues in Q4 13, compared to 45% in Q4 12.

Retail net revenues in Q4 13 were $760 million versus $773 million in Q4 12. Excluding the additional week in Q4 12, retail net revenues grew 2.7%, primarily driven by Pottery Barn and West Elm, partially offset by a decrease in Williams-Sonoma and our international franchise operations.

Operating margin in Q4 13 was 14.8% compared to 15.0% in Q4 12:

 

  Gross margin was 40.6% versus 41.3% in Q4 12.

 

  Selling, general and administrative (SG&A) expenses were $378 million, or 25.8% of net revenues, versus $370 million, or 26.3%, in Q4 12.

EPS in Q4 13 increased to $1.38. Excluding the additional week in Q4 12, EPS increased 8.7%.

 

2


FISCAL YEAR 2013 RESULTS

Net revenues increased to $4.388 billion in FY 13 from $4.043 billion in FY 12. Excluding the additional week in FY 12, net revenues grew 10.5%.

Comparable brand revenue growth in FY 13 increased 8.8% on top of 6.1% in FY 12 as shown in the table below:

 

Fiscal Year Net Revenues and Comparable Brand Revenue Growth by Concept*

 

      Net Revenues (Millions)      Comparable Brand
Revenue Growth
 
     

FY 13

(52 Weeks)

    

FY 12

(53 Weeks)

     FY 13      FY 12  

Pottery Barn

     $  1,911         $  1,753         10.4%         8.5%    

Williams-Sonoma

     978         981         1.5%         (1.7%)   

Pottery Barn Kids

     598         558         7.8%         5.6%    

West Elm

     531         430         17.4%         17.4%    

PBteen

     246         220         14.1%         1.7%    

Other

     124         101         N/A         N/A    

Total

     $  4,388         $  4,043         8.8%         6.1%   

 

 

 

  * See the company’s 10-K and 10-Q filings for the definition of comparable brand revenue growth.

DTC net revenues in FY 13 increased to $2.115 billion versus $1.869 billion in FY 12. Excluding the additional week in FY 12, DTC net revenues grew 15.6%, with increases across all brands. This growth was primarily led by Pottery Barn, West Elm, Pottery Barn Kids and PBteen. DTC net revenues generated 48% of total company net revenues in FY 13 versus 46% in FY 12.

Retail net revenues in FY 13 increased to $2.273 billion versus $2.173 billion in FY 12. Excluding the additional week in FY 12, retail net revenues grew 6.2%, primarily driven by Pottery Barn, West Elm and our international franchise operations, partially offset by a decrease in Williams-Sonoma. Retail leased square footage increased 1%.

Operating margin in FY 13 was 10.3% versus 10.1% in FY 12. Excluding unusual business events, non-GAAP operating margin in FY 13 was 10.4% versus 10.3% in FY 12.

 

  Gross margin was 38.8% versus 39.4% in FY 12.

 

  SG&A expenses were $1.252 billion, or 28.5% of net revenues, versus $1.183 billion, or 29.3% in FY 12. Excluding the less than 10 basis point impact related to unusual business events in FY 13 and the 20 basis point impact related to unusual business events in FY 12, non-GAAP SG&A expenses were $1.249 billion, or 28.5% versus $1.176 billion, or 29.1% in FY 12.

The effective income tax rate in FY 13 was 38.4% versus 37.4% in FY 12. The FY 12 tax rate reflects certain favorable income tax resolutions and credits.

EPS in FY 13 increased to $2.82. Excluding unusual business events in FY 13, non-GAAP EPS was $2.84, an increase of 13.1% after excluding the impact of the additional week in FY 12.

Merchandise inventories at the end of FY 13 increased 27.1% to $813 million from $640 million at the end of FY 12. Excluding the impact of additional inventory in transit due to taking ownership of our inventory earlier in the supply chain in FY 13 versus FY 12, merchandise inventories increased 16.9% on a comparable basis.

 

3


DIVIDEND INCREASE AND STOCK REPURCHASE PROGRAM

As announced in a separate release today, our Board of Directors has authorized a 6% increase in our quarterly cash dividend to $0.33 per common share. During Q4 13, we repurchased 402,810 shares of common stock for a total of 4.3 million shares or $239 million in FY 13. As of February 2, 2014, $511 million remained under the three-year $750 million stock repurchase program announced in March 2013.

FISCAL YEAR 2014 FINANCIAL GUIDANCE

1st Quarter 2014 Guidance

 

  Net revenues in the first quarter of fiscal 2014 (Q1 14) are expected to be in the range of $920 million to $940 million.

 

  Comparable brand revenue growth in Q1 14 is expected to be in the range of 4% to 6%.

 

  Diluted EPS in Q1 14 is expected to be in the range of $0.41 to $0.44.

Fiscal Year 2014 Guidance

 

Financial Highlights

 

Total Net Revenues (millions)

   $4,630     $4,710

Comparable Brand Revenue Growth

   5     7%

Operating Margin

   10.2     10.4%

Diluted EPS

   $3.05     $3.15

Income Tax Rate

   38.0     38.5%

Capital Spending (millions)

   $200     $220

Depreciation and Amortization (millions)

   $160     $170

 

Store Opening and Closing Guidance by Retail Concept

 

                                               
FY 2013 ACT*      FY 2014 GUID  
      Total      New      Close     End  

  Williams-Sonoma

     248         5         (12     241   

  Pottery Barn

     194         7         (5     196   

  Pottery Barn Kids

     81         7         (5     83   

  West Elm

     58         12         -        70   

  Rejuvenation

     4         -         -        4   

  Total

     585         31         (22     594   

 

 
  * Included in the FY 13 numbers above are 5 stores in Australia (2 West Elm, 1 Williams-Sonoma, 1 Pottery Barn and 1 Pottery Barn Kids) and 1 West Elm store in the UK.  

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, March 12, 2014, at 2:00 P.M. (PT). The call, hosted by Laura Alber, President and Chief Executive Officer, will be open to the general public via live webcast and can be accessed at www.williams-sonomainc.com/webcast. A replay of the webcast will be available at www.williams-sonomainc.com/webcast.

 

4


SEC REGULATION G — NON-GAAP INFORMATION

This press release includes non-GAAP SG&A, operating income, operating margin and diluted EPS. These non-GAAP financial measures exclude the impact of employee separation charges in FY 13 and FY 12. We have reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures in the text of this release and in Exhibit 1. 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 and FY 13 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 measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

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 prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements relating to: our execution of our key strategies; the success of our merchandising approach; our ability to reach customers and attract new ones; our ability to capture market share as our e-commerce business expands; our future financial guidance, including Q1 14 and FY 2014 guidance; our three-year stock repurchase program; and our proposed store openings and closures.

The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: accounting adjustments as we close our books for Q4 13 and as audited year-end financial statements are prepared; continuing changes in general economic conditions, and the impact on consumer confidence and consumer spending; 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; successful catalog management, including timing, sizing and merchandising; uncertainties in e-marketing, infrastructure and regulation; multi-channel and multi-brand complexities; our ability to introduce new brands and brand extensions; dependence on external funding sources for operating capital; disruptions in the financial markets; our ability to control employment, occupancy 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; 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 February 3, 2013 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-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 a specialty retailer of high-quality products for the home. These products, representing eight distinct merchandise strategies – Williams-Sonoma (cookware and wedding registry), Pottery Barn (furniture and wedding registry), Pottery Barn Kids (kids’ furniture and baby registry), PBteen (girls’ bedding and boys’ bedding), West Elm (modern furniture and room decor), Williams-Sonoma Home (luxury furniture and decorative accessories), Rejuvenation (lighting and hardware) and Mark and Graham (personalized gifts and gifts for the home) – are marketed through e-commerce websites, direct mail catalogs and 585 stores. Williams-Sonoma, Inc. currently operates in the United States, Canada, Australia and the United Kingdom, offers international shipping to customers worldwide and has an unaffiliated franchisee that operates 27 stores in the Middle East.

 

5


Williams-Sonoma, Inc.

Condensed Consolidated Statements of Earnings (unaudited)

Thirteen weeks ended February 2, 2014 and

Fourteen weeks ended February 3, 2013

(Dollars and shares in thousands, except per share amounts)

 

     4th Quarter  
     2013 (13 Weeks)           2012 (14 Weeks)  
  

 

 

       

 

 

 
     $     % of
Revenues
          $     % of
Revenues
 
  

 

 

       

 

 

 

Direct-to-customer net revenues

     $     706,407        48.2%            $     633,503        45.0%   

Retail net revenues

     759,917        51.8                772,916        55.0       
  

 

 

       

 

 

 

Net revenues

     1,466,324        100.0                1,406,419        100.0       

Cost of goods sold

     870,605        59.4                825,687        58.7       
  

 

 

       

 

 

 

Gross margin

     595,719        40.6                580,732        41.3       

Selling, general and administrative expenses

     377,984        25.8                370,291        26.3       
  

 

 

       

 

 

 

Operating income

     217,735        14.8                210,441        15.0       

Interest (income), net

     (168     -                (261     -       
  

 

 

       

 

 

 

Earnings before income taxes

     217,903        14.9                210,702        15.0       

Income taxes

     84,105        5.7                76,968        5.5       
  

 

 

       

 

 

 

Net earnings

     $   133,798        9.1%            $   133,734        9.5%   
  

 

 

       

 

 

 

Earnings per share (EPS):

            

Basic

     $1.42              $1.36     

Diluted

     $1.38              $1.34     

Shares used in calculation of EPS:

            

Basic

     94,271              98,015     

Diluted

     96,973              99,949     

 

6


Williams-Sonoma, Inc.

Condensed Consolidated Statements of Earnings (unaudited)

Fifty-two weeks ended February 2, 2014 and

Fifty-three weeks ended February 3, 2013

(Dollars and shares in thousands, except per share amounts)

 

     Fiscal Year  
     2013 (52 Weeks)           2012 (53 Weeks)  
  

 

 

       

 

 

 
     $     % of
Revenues
          $     % of
Revenues
 
  

 

 

       

 

 

 

Direct-to-customer net revenues

     $2,115,022        48.2%            $1,869,386        46.2%   

Retail net revenues

     2,272,867        51.8                2,173,484        53.8       
  

 

 

       

 

 

 

Net revenues

     4,387,889        100.0                4,042,870        100.0       

Cost of goods sold

     2,683,673        61.2                2,450,394        60.6       
  

 

 

       

 

 

 

Gross margin

     1,704,216        38.8                1,592,476        39.4       

Selling, general and administrative expenses

     1,252,118        28.5                1,183,313        29.3       
  

 

 

       

 

 

 

Operating income

     452,098        10.3                409,163        10.1       

Interest (income), net

     (584     -                (793     -       
  

 

 

       

 

 

 

Earnings before income taxes

     452,682        10.3                409,956        10.1       

Income taxes

     173,780        4.0                153,226        3.8       
  

 

 

       

 

 

 

Net earnings

     $  278,902        6.4%            $  256,730        6.4%   
  

 

 

       

 

 

 

Earnings per share (EPS):

            

Basic

     $2.89              $2.59     

Diluted

     $2.82              $2.54     

Shares used in calculation of EPS:

            

Basic

     96,669              99,266     

Diluted

     98,765              101,051     

 

7


Williams-Sonoma, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(Dollars in thousands)

 

  

 

 

       

 

 

 
     Feb. 2, 2014           Feb. 3, 2013  
  

 

 

       

 

 

 

Assets

        

Current assets

        

Cash and cash equivalents

     $     330,121            $     424,555   

Restricted cash

     14,289            16,055   

Accounts receivable, net

     60,330            62,985   

Merchandise inventories, net

     813,160            640,024   

Prepaid catalog expenses

     33,556            37,231   

Prepaid expenses

     35,309            26,339   

Deferred income taxes, net

     121,486            99,764   

Other assets

     10,852            9,819   
  

 

 

       

 

 

 

Total current assets

     1,419,103            1,316,772   
  

 

 

       

 

 

 

Property and equipment, net

     849,293            812,037   

Non-current deferred income taxes, net

     13,824            12,398   

Other assets, net

     54,514            46,472   
  

 

 

       

 

 

 

Total assets

     2,336,734            2,187,679   
  

 

 

       

 

 

 

Liabilities and stockholders’ equity

        

Current liabilities

        

Accounts payable

     404,791            259,162   

Accrued salaries, benefits and other

     138,181            120,632   

Customer deposits

     228,193            207,415   

Income taxes payable

     49,365            41,849   

Current portion of long-term debt

     1,785            1,724   

Other liabilities

     38,781            26,345   
  

 

 

       

 

 

 

Total current liabilities

     861,096            657,127   
  

 

 

       

 

 

 

Deferred rent and lease incentives

     157,856            171,198   

Long-term debt

     1,968            3,753   

Other long-term obligations

     59,812            46,463   
  

 

 

       

 

 

 

Total liabilities

     1,080,732            878,541   
  

 

 

       

 

 

 

Stockholders’ equity

     1,256,002            1,309,138   
  

 

 

       

 

 

 

Total liabilities and stockholders’ equity

     $  2,336,734            $  2,187,679   
  

 

 

       

 

 

 

 

ADDITIONAL INFORMATION   

Store Count

          Avg. Leased Square
Footage Per Store
 
  

 

 

       

 

 

 
     Nov. 3,
2013
     Openings      Closings     Feb. 2,
2014
     Feb. 3,
2013
          Feb. 2,
2014
     Feb. 3,
2013
 
  

 

 

       

 

 

 

Williams-Sonoma

     256         -         (8     248         253            6,600         6,600   

Pottery Barn

     196         1         (3     194         192            13,800         13,900   

Pottery Barn Kids

     84         2         (5     81         84            7,900         8,100   

West Elm

     55         3         -        58         48            14,100         14,900   

Rejuvenation

     4         -         -        4         4            13,200         13,200   
  

 

 

       

 

 

 

Total

     595         6         (16     585         581            10,000         9,900   
  

 

 

       

 

 

 

 

  

 

 

    

 

 

    

 

 

 
     Nov. 3, 2013         Feb. 2, 2014         Feb. 3, 2013   
  

 

 

    

 

 

    

 

 

 

Total store selling square footage

     3,632,000         3,590,000         3,548,000   

Total store leased square footage

     5,908,000         5,838,000         5,778,000   

 

8


Williams-Sonoma, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

Fifty-two weeks ended February 2, 2014 and

Fifty-three weeks ended February 3, 2013

(Dollars in thousands)

 

    

Fiscal Year

 

 
  

 

 

      

 

 

 
    

2013

(52 Weeks)

        

2012

(53 Weeks)

 
  

 

 

      

 

 

 

Cash flows from operating activities

       

Net earnings

   $ 278,902         $ 256,730   

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

       

Depreciation and amortization

     149,795           134,453   

Loss on sale/disposal/impairment of assets

     2,764           8,388   

Amortization of deferred lease incentives

     (25,382        (26,694

Deferred income taxes

     (28,344        (9,029

Tax benefit from exercise of stock-based awards

     8,817           12,725   

Excess tax benefit from exercise of stock-based awards

     (8,743        (12,683

Stock-based compensation expense

     38,788           31,042   

Changes in:

       

Accounts receivable

     786           (16,408

Merchandise inventories

     (174,664        (85,981

Prepaid catalog expenses

     3,675           (2,937

Prepaid expenses and other assets

     (13,649        (12,204

Accounts payable

     135,095           22,461   

Accrued salaries, benefits and other current and long-term liabilities

     43,635           9,147   

Customer deposits

     21,578           16,962   

Deferred rent and lease incentives

     13,238           18,803   

Income taxes payable

     7,478           19,352   
  

 

 

      

 

 

 

Net cash provided by operating activities

     453,769           364,127   
  

 

 

      

 

 

 

Cash flows from investing activities:

       

Purchases of property and equipment

     (193,953        (205,404

Restricted cash deposits

     1,766           (1,323

Other

     1,563           (88
  

 

 

      

 

 

 

Net cash used in investing activities

     (190,624        (206,815
  

 

 

      

 

 

 

Cash flows from financing activities:

       

Repurchase of common stock

     (239,274        (155,080

Payment of dividends

     (111,581        (87,847

Tax withholdings related to stock-based awards

     (18,096        (18,637

Excess tax benefit from exercise of stock-based awards

     8,743           12,683   

Net proceeds from exercise of stock-based awards

     6,614           14,637   

Repayments of long-term obligations

     (1,724        (1,796

Other

     (58        (405
  

 

 

      

 

 

 

Net cash used in financing activities

     (355,376        (236,445
  

 

 

      

 

 

 

Effect of exchange rates on cash and cash equivalents

     (2,203        931   

Net decrease in cash and cash equivalents

     (94,434        (78,202

Cash and cash equivalents at beginning of period

     424,555           502,757   
  

 

 

      

 

 

 

Cash and cash equivalents at end of period

   $ 330,121         $ 424,555   
  

 

 

      

 

 

 

 

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Exhibit 1

 

4th Quarter Operating Margin By Segment*

($ in thousands)

 

      DTC      Retail      Unallocated      Total  
      Q4 13      Q4 12      Q4 13      Q4 12      Q4 13      Q4 12      Q4 13      Q4 12  

Net Revenues

   $ 706,407       $ 633,503       $ 759,917       $ 772,916       $ -       $ -       $ 1,466,324       $ 1,406,419   

Operating Income/(Expense)

     174,625         144,889         130,969         145,941         (87,859)         (80,389)         217,735         210,441   

Operating Margin

     24.7%         22.9%         17.2%         18.9%         (6.0%)         (5.7%)         14.8%         15.0%   

 

 

 

Reconciliation of Fiscal Year Actual GAAP to Non-GAAP

Operating Margin By Segment*

($ in thousands)

 

     DTC     Retail     Unallocated     Total  
     FY 13     FY 12     FY 13     FY 12     FY 13     FY 12     FY 13     FY 12  
Net Revenues   $ 2,115,022      $ 1,869,386      $ 2,272,867      $ 2,173,484      $ -      $ -      $ 4,387,889      $ 4,042,870   
GAAP Operating Income/(Expense)     502,143        418,836        248,894        262,899        (298,939)        (272,572)        452,098        409,163   
GAAP Operating Margin     23.7%        22.4%        11.0%        12.1%        (6.8%)        (6.7%)        10.3%        10.1%   

 

 
Unusual Business Events (UBE) (1,2)     -        -        -        -        2,936        6,990        2,936        6,990   

Non-GAAP Operating Income/

(Expense) Excluding UBE (3)

  $ 502,143      $ 418,836      $ 248,894      $ 262,899      $ (296,003)      $ (265,582)      $ 455,034      $ 416,153   
Non-GAAP Operating Margin (3)     23.7%        22.4%        11.0%        12.1%        (6.7%)        (6.6%)        10.4%        10.3%   

 

 

 

Reconciliation of Fiscal Year Actual GAAP to Non-GAAP

Diluted Earnings Per Share**

(Totals rounded to the nearest cent per diluted share)

 

     

Q1 13

(13 Weeks)

    

Q2 13

(13 Weeks)

    

Q3 13

(13 Weeks)

    

Q4 13

(13 Weeks)

    

FY 13

(52 Weeks)

 

2013 GAAP Diluted EPS

     $0.40         $0.49         $0.58         $1.38         $2.82   

Impact of Employee Separation Charges (1)

     0.02         -         -         -         0.02   

2013 Non-GAAP Diluted EPS Excluding UBE (3)***

     $0.41         $0.49         $0.58         $1.38         $2.84   

 

 
              
     

Q1 12

(13 Weeks)

    

Q2 12

(13 Weeks)

    

Q3 12

(13 Weeks)

    

Q4 12

(14 Weeks)

    

FY 12

(53 Weeks)

 

2012 GAAP Diluted EPS

     $0.30         $0.43         $0.49         $1.34         $2.54   

Impact of Employee Separation Charges (2)

     0.04         -         -         -         0.04   

2012 Non-GAAP Diluted EPS Excluding UBE (3)***

     $0.34         $0.43         $0.49         $1.34         $2.58   

 

 
* See the company’s 10-K and 10-Q filings for additional information on segment reporting and the definition of Operating Income/(Expense) and Operating Margin.
** Due to the differences between the quarterly and year-to-date weighted average share count calculations and the effect of quarterly rounding to the nearest cent per diluted share, the year-to-date calculation of GAAP and non-GAAP diluted EPS may not equal the sum of the quarters.
*** Due to rounding to the nearest cent per diluted share, totals may not equal the sum of the line items in the table above.

Notes:

(1) Impact of Employee Separation Charges – During Q1 13 and FY 13, we incurred charges of approximately $0.02 per diluted share associated with the previously announced retirement of the former President of the Williams-Sonoma brand. These charges were recorded within the unallocated segment.
(2) Impact of Employee Separation Charges – During Q1 12 and FY 12, we incurred charges of approximately $0.04 per diluted share primarily associated with the previously announced retirement of our former Executive Vice President, Chief Operating and Chief Financial Officer. These charges were recorded within the unallocated segment.
(3) SEC Regulation G – Non-GAAP Information – These tables include non-GAAP operating income, operating margin 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 and FY 13 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.

 

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