Williams-Sonoma, Inc. Announces Strong Third Quarter 2012 Results - EPS Grows 20% over 2011 Raises Financial Guidance for Fiscal
Williams-Sonoma, Inc. Announces Strong Third Quarter 2012 Results - EPS
Grows 20% over 2011 Raises Financial Guidance for Fiscal Year 2012
Business Wire
SAN FRANCISCO -- November 14, 2012
Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the
third quarter of fiscal 2012 ended October 28, 2012 (“Q3 12”).
Q3 12 RESULTS
* Net revenues increased 8.9% to $945 million in Q3 12 from $867 million in
the third quarter of fiscal 2011 ended October 30, 2011 (“Q3 11”).
Comparable brand revenue increased 8.5%.
* Operating margin increased to 8.4% from 7.9% in Q3 11.
* Diluted earnings per share (“EPS”) increased 20% to $0.49 versus $0.41 in
Q3 11.
* During the quarter, the company repurchased 748,807 shares of common stock
for approximately $31 million, leaving $31 million remaining under the
$225 million stock repurchase program authorized by the Board in January
2012.
Laura Alber, President and Chief Executive Officer, said, “On behalf of all of
us at Williams-Sonoma, Inc., I would first like to express my concern for the
welfare of those individuals and families impacted by Hurricane Sandy. While
the recent storms have caused some disruptions to our business, our response
has been focused on assisting our associates and customers in need.”
Alber commented, “During the third quarter, we delivered
stronger-than-expected revenues, operating margin and diluted earnings per
share. EPS grew 20% on revenue growth of 9%, as comparable brand revenue
growth accelerated to 8.5%, from 7.4% last quarter. Importantly, we drove
these results while simultaneously investing in our strategic growth
initiatives.”
Alber continued, “We are proud of our recently announced growth initiatives,
including the launch of West Elm Market, a West Elm brand extension, and the
launch of Mark and Graham, our new on-line brand, which features personalized
gifts and accessories. This week, we announced new Williams-Sonoma branded
product lines that represent the next generation in cooking technology.
Drawing on over five decades of culinary experience, these introductions in
cookware, cooks’ tools, and new tech-driven Williams-Sonoma smart tools
represent advancements that will be appreciated by the home cook and
professional chef. These Williams-Sonoma branded products are just the
beginning of what we will bring to the market over the next several years.”
Alber concluded, “We are raising our fiscal year outlook by $0.01 to a
non-GAAP EPS range of $2.45 to $2.52 due to our strong results throughout the
year. Our guidance includes the impact of the acceleration of our global
expansion into Australia in early fiscal 2013, as well as the unexpected
impact from the storms.”
Comparable brand revenue growth in Q3 12 increased 8.5% on top of 7.3% in Q3
11 as shown in the table below:
Third Quarter Comparable Brand Revenue Growth by Concept*
Q3 12 Q3 11
Pottery Barn 11.1 % 7.0 %
Williams-Sonoma** 1.3 % 0.3 %
Pottery Barn Kids 10.1 % 5.2 %
West Elm 13.0 % 27.0 %
PBteen 2.0 % 6.5 %
Total 8.5 % 7.3 %
* See the company’s 10-K and 10-Q filings for the definition of comparable
brand revenue growth.
Williams-Sonoma excludes net revenues from Williams-Sonoma Home (“WSH”)
** merchandise. Including WSH, comparable brand revenue growth for
Williams-Sonoma was 0.8% in Q3 12 and 0.1% in Q3 11. (WSH net revenues are
included in the total.)
Direct-to-customer (“DTC”) net revenues in Q3 12 increased 14.7% to $447
million from $390 million in Q3 11, with increases across all brands. This
growth was led by Pottery Barn, West Elm, Pottery Barn Kids and
Williams-Sonoma. E-commerce net revenues increased 16.7% to $396 million in Q3
12 versus $339 million in Q3 11. DTC net revenues generated 47% of total
company net revenues in Q3 12 versus 45% in Q3 11.
Retail net revenues in Q3 12 increased 4.2% to $497 million from $478 million
in Q3 11, primarily driven by Pottery Barn and West Elm and partially offset
by a decrease in Williams-Sonoma. Retail leased square footage was flat to
last year. Comparable store sales in Q3 12 increased 2.9% versus 6.3% in Q3
11.
Gross margin expressed as a percentage of net revenues in Q3 12 increased to
39.0% from 38.3% in Q3 11.
Selling, general and administrative (“SG&A”) expenses in Q3 12 were $289
million or 30.6% of net revenues versus $263 million or 30.4% in Q3 11.
Included in the 20 basis point increase from Q3 11 to Q3 12 were planned
incremental investments to support e-commerce, global expansion and business
development growth strategies.
Operating margin expressed as a percentage of net revenues in Q3 12 increased
to 8.4% from 7.9% in Q3 11.
Merchandise inventories at the end of Q3 12 increased 9.9% to $688 million
from $627 million at the end of Q3 11.
FY 12 FINANCIAL GUIDANCE (for the 53-weeks ending February 3, 2013)
* Fourth Quarter and Fiscal Year Guidance
Guidance for Fourth Quarter and Fiscal Year 2012
Fourth Quarter Fiscal Year
Q4 12 Q4 11 FY 12 FY 11
GUID ACT GUID ACT
(14 weeks) (13 (53 weeks) (52
weeks) weeks)
Total Net Revenues $1,360 - $1,268 $3,995 - $3,721
(millions) $1,400 $4,035
Total % Growth vs. Prior
Year 7 - 10 % 6.1% 7 - 8 % 6.2%
(53-week vs. 52-week)
Total Adjusted % Growth vs.
Prior Year 2 - 4 % 6.1% 5 - 6 % 6.2%
(53-week vs. 53-week)
Comparable Brand Revenue
Growth* 2 - 4 % 6.6% 5 - 6 % 7.3%
(53-week vs. 53-week)
Non-GAAP Operating Margin** 14.5 - 15.1 15.6% 10.1 - 10.3 10.3%
% %
Non-GAAP Diluted EPS $1.21 - $1.17 $2.45 - $2.24
$1.28 $2.52
GAAP Diluted EPS $1.21 - $1.17 $2.41 - $2.22
$1.28 $2.48
Leased Square Footage % <1> - 0 % <1.5%> <1> - 0 % <1.5%>
Change
* See the company’s 10-K and 10-Q filings for the definition of comparable
brand revenue growth.
The non-GAAP operating margin above excludes the impact of unusual business
** events of approximately 20 basis points in FY 12. We anticipate GAAP
operating margin to be in the range of 9.9 - 10.1 % in FY 12.
Guidance for Fiscal Year 2012
FY 12 FY 11
GUID ACT
(53 weeks) (52 weeks)
DTC Net Revenue % Growth vs. Prior Year 12 - 14 % 12.4%
(53-week vs. 52-week)
Adjusted DTC Net Revenue % Growth vs. Prior
Year 9 - 11 % 12.4%
(53-week vs. 53-week)
Comparable Store Sales Growth* 2 - 3 % 3.5%
(53-week vs. 53-week)
Income Tax Rate 38.2 - 38.6 % 37.9%
Capital Spending (millions) $200 - $220 $130
Depreciation and Amortization (millions) $133 - $135 $131
Amortization of Deferred Lease Incentives $26 - $27 $28
(millions)
Stock-based Compensation Expense (millions) $31 - $32 $24
* See the company’s 10-K and 10-Q filings for the definition of comparable
stores.
* Store Openings and Closings
Store Opening and Closing Guidance by Retail Concept
Q4 11 Q3 YTD 12 Q4 12 FY 12
ACT ACT GUID GUID
Retail Concept Total Open Close End Open Close End Open Close End
Williams-Sonoma 259 3 <3 > 259 2 <10 > 251 5 <13 > 251
*
Pottery Barn 194 6 <7 > 193 2 <3 > 192 8 <10 > 192
*
Pottery Barn 83 1 <1 > 83 2 <1 > 84 3 <2 > 84
Kids *
West Elm 37 9 <1 > 45 4 <2 > 47 13 <3 > 47
*
Rejuvenation 3 1 - 4 - - 4 1 - 4
Total** 576 20 <12 > 584 10 <16 > 578 30 <28 > 578
FY 12 store closing numbers include 20 permanent store closures. FY 12
total store opening and closing numbers for Williams-Sonoma, Pottery Barn,
* Pottery Barn Kids and West Elm include 1, 5, 1 and 1 stores, respectively,
for temporary closure and re-opening due to remodeling. Remodeled stores
are defined as those stores temporarily closed and subsequently re-opened
due to square footage expansion, store modification, or relocation.
Temporary “pop-up” stores, where lease terms are typically short-term in
** nature and are used to test new markets, are not included in the totals
above as they are not considered permanent stores. At the close of Q3 12,
we operated three pop-up stores -- one in West Elm and two in PBteen.
CONFERENCE CALL AND WEBCAST INFORMATION
Williams-Sonoma, Inc. will host a live conference call today, November 14,
2012, 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 a live webcast and
can be accessed through the Internet at www.williams-sonomainc.com/webcast. A
replay of the webcast will be available at www.williams-sonomainc.com/webcast.
SEC REGULATION G -- NON-GAAP INFORMATION
This press release includes non-GAAP operating margin and diluted EPS. These
non-GAAP financial measures exclude the impact of employee separation charges
and the impact of asset impairment and early lease termination charges for
underperforming retail stores. 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 diluted EPS actual results and FY 12 guidance on a comparable basis
with our quarterly and FY 11 results. 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 growth initiatives; our global
expansion; our holiday strategies; and Q4 12 and fiscal year 2012 guidance.
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 Q3 12; recent 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 January 29, 2012, 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 seven 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) and
Rejuvenation (lighting and hardware) – are marketed through 584 stores, seven
direct mail catalogs and six e-commerce websites. In addition, on November 8,
2012, the company launched Mark and Graham (personalized gifts and gifts for
the home), which will be marketed through a direct mail catalog and an
e-commerce website. Williams-Sonoma, Inc. currently operates in the United
States and Canada, offers international shipping to customers worldwide, and
franchises its brands throughout the Kingdom of Saudi Arabia, Kuwait, and the
United Arab Emirates.
WILLIAMS-SONOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THIRTEEN WEEKS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THIRD QUARTER
2012 2011
(13 Weeks) (13 Weeks)
% of % of
$ Revenues $ Revenues
Direct-to-customer $ 447,115 47.3 % $ 389,653 44.9 %
net revenues
Retail net revenues 497,439 52.7 477,523 55.1
Net revenues 944,554 100.0 867,176 100.0
Cost of goods sold 576,556 61.0 535,213 61.7
Gross margin 367,998 39.0 331,963 38.3
Selling, general and
administrative 288,702 30.6 263,219 30.4
expenses
Operating income 79,296 8.4 68,744 7.9
Interest (income), (173 ) - (7 ) -
net
Earnings before 79,469 8.4 68,751 7.9
income taxes
Income taxes 30,569 3.2 25,330 2.9
Net earnings $ 48,900 5.2 % $ 43,421 5.0 %
Earnings per share:
Basic $ 0.50 $ 0.42
Diluted $ 0.49 $ 0.41
Shares used in
calculation of
earnings per share:
Basic 98,444 103,651
Diluted 100,418 105,721
WILLIAMS-SONOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THIRTY-NINE WEEKS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR-TO-DATE
2012 2011
(39 Weeks) (39 Weeks)
% of % of
$ Revenues $ Revenues
Direct-to-customer $ 1,235,883 46.9 % $ 1,101,815 44.9 %
net revenues
Retail net 1,400,568 53.1 1,350,936 55.1
revenues
Net revenues 2,636,451 100.0 2,452,751 100.0
Cost of goods sold 1,624,707 61.6 1,516,184 61.8
Gross margin 1,011,744 38.4 936,567 38.2
Selling, general
and administrative 813,022 30.8 752,038 30.7
expenses
Operating income 198,722 7.5 184,529 7.5
Interest (income) (532 ) - 63 -
expense, net
Earnings before 199,254 7.6 184,466 7.5
income taxes
Income taxes 76,258 2.9 70,121 2.9
Net earnings $ 122,996 4.7 % $ 114,345 4.7 %
Earnings per
share:
Basic $ 1.24 $ 1.09
Diluted $ 1.21 $ 1.07
Shares used in
calculation of
earnings per
share:
Basic 99,528 104,592
Diluted 101,285 106,835
WILLIAMS-SONOMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
October January October
28, 29, 30,
2012 2012 2011
Assets
Current
assets
Cash and cash $ 262,484 $ 502,757 $ 379,393
equivalents
Restricted 16,049 14,732 14,726
cash
Accounts
receivable, 59,562 45,961 54,140
net
Merchandise
inventories, 688,437 553,461 626,583
net
Prepaid
catalog 44,452 34,294 46,898
expenses
Prepaid 34,370 24,188 41,925
expenses
Deferred
income taxes, 91,718 91,744 85,602
net
Other assets 9,741 9,229 9,632
Total current 1,206,813 1,276,366 1,258,899
assets
Property and
equipment, 763,576 734,672 740,025
net
Non-current
deferred 13,691 12,382 34,061
income taxes,
net
Other assets, 39,342 37,418 18,179
net
Total assets $ 2,023,422 $ 2,060,838 $ 2,051,164
Liabilities
and
stockholders'
equity
Current
liabilities
Accounts $ 236,562 $ 218,329 $ 220,689
payable
Accrued
salaries, 96,534 111,774 89,117
benefits and
other
Customer 208,239 190,417 207,749
deposits
Income taxes 1,467 22,435 17,152
payable
Current
portion of 1,753 1,795 1,815
long-term
debt
Other 28,734 27,049 26,418
liabilities
Total current 573,289 571,799 562,940
liabilities
Deferred rent
and lease 177,912 181,762 188,989
incentives
Long-term 3,755 5,478 5,494
debt
Other
long-term 50,609 46,537 45,957
obligations
Total 805,565 805,576 803,380
liabilities
Stockholders' 1,217,857 1,255,262 1,247,784
equity
Total
liabilities
and $ 2,023,422 $ 2,060,838 $ 2,051,164
stockholders'
equity
ADDITIONAL INFORMATION
Average Leased
Store Count Square
Footage Per Store
July 29, October October October October
Retail Concept 2012 Openings Closings 28, 30, 28, 30,
2012 2011 2012 2011
Williams-Sonoma 259 1 <1 > 259 268 6,600 6,500
Pottery Barn 193 4 <4 > 193 201 13,900 13,700
Pottery Barn 83 - - 83 84 8,100 8,200
Kids
West Elm 40 5 - 45 36 15,600 17,200
Rejuvenation 4 - - 4 - 13,200 -
Total 579 10 <5 > 584 589 10,000 9,900
Total Store Square Footage
July 29, October October
2012 28, 30,
2012 2011
Total store
selling square 3,526,000 3,566,000 3,583,000
footage
Total store
leased square 5,738,000 5,813,000 5,809,000
footage
WILLIAMS-SONOMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THIRTY-NINE WEEKS ENDED OCTOBER 28, 2012 AND OCTOBER 30, 2011
(DOLLARS IN THOUSANDS)
YEAR-TO-DATE
2012 2011
(39 Weeks) (39 Weeks)
Cash flows from operating activities
Net earnings $ 122,996 $ 114,345
Adjustments to reconcile net earnings to net
cash
provided by (used in) operating activities:
Depreciation and amortization 98,653 98,773
Loss on sale/disposal of assets 1,567 1,290
Impairment of assets - 172
Amortization of deferred lease incentives (19,785 ) (20,828 )
Deferred income taxes (8,767 ) (6,989 )
Tax benefit from exercise of stock-based awards 7,098 6,036
Stock-based compensation expense 22,778 17,834
Changes in:
Accounts receivable (13,045 ) (12,526 )
Merchandise inventories (134,545 ) (113,034 )
Prepaid catalog expenses (10,157 ) (10,073 )
Prepaid expenses and other assets (12,883 ) (19,125 )
Accounts payable 4,832 (17,687 )
Accrued salaries, benefits and other current and (9,069 ) (38,535 )
long-term liabilities
Customer deposits 17,773 15,284
Deferred rent and lease incentives 15,866 8,027
Income taxes payable (20,929 ) (24,847 )
Net cash provided by (used in) operating 62,383 (1,883 )
activities
Cash flows from investing activities:
Purchases of property and equipment (116,398 ) (102,255 )
Restricted cash deposits (1,317 ) (2,214 )
Proceeds from insurance reimbursement - 707
Other (231 ) (536 )
Net cash used in investing activities (117,946 ) (104,298 )
Cash flows from financing activities:
Repurchase of common stock (124,293 ) (93,986 )
Payment of dividends (66,185 ) (51,334 )
Tax withholdings related to stock-based awards (12,327 ) (8,376 )
Proceeds from exercise of stock-based awards 12,009 7,651
Excess tax benefit from exercise of stock-based 7,399 4,895
awards
Repayments of long-term obligations (1,765 ) (1,515 )
Other (405 ) (86 )
Net cash used in financing activities (185,567 ) (142,751 )
Effect of exchange rates on cash and cash 857 (78 )
equivalents
Net decrease in cash and cash equivalents (240,273 ) (249,010 )
Cash and cash equivalents at beginning of period 502,757 628,403
Cash and cash equivalents at end of period $ 262,484 $ 379,393
Exhibit 1
Reconciliation of Q3 12 and Q3 11 Actual GAAP to Non-GAAP
Operating Margin By Segment*
(Dollars in millions)
DTC RETAIL UNALLOCATED TOTAL
Q3 12 Q3 11 Q3 12 Q3 11 Q3 12 Q3 11 Q3 12 Q3 11
Net Revenues $ 447 $ 390 $ 497 $ 478 $ - $ - $ 945 $ 867
GAAP Operating 101 84 44 46 <65> <62> 79 69
Income/<Expense>**
GAAP Operating 22.5% 21.6% 8.8% 9.7% <6.9%> <7.1%> 8.4% 7.9%
Margin***
Unusual Business - - - 0 - - - 0
Events (Note 2)
Non-GAAP Operating
Income/<Expense> $ 101 $ 84 $ 44 $ 46 $ <65> $ <62> $ 79 $ 69
Excluding Unusual
Business Events
Non-GAAP Operating 22.5% 21.6% 8.8% 9.7% <6.9%> <7.1%> 8.4% 7.9%
Margin
* See the company’s 10-K and 10-Q filings for additional information on
segment reporting.
** Operating Income/<Expense> is defined as earnings before net interest
income or expense and income taxes.
*** Operating Margin is defined as operating income as a percentage of net
revenues.
Reconciliation of FY 12 Guidance and FY 11 Actual GAAP to Non-GAAP
Diluted Earnings Per Share*
(Totals rounded to the nearest cent per diluted share)
Q1 12 Q2 12 Q3 12 Q4 12 FY 12
Weighted
ACT ACT ACT GUID Share GUID
(13 (13 (13 (14 Effect (53
Weeks) Weeks) Weeks) Weeks) Weeks)
2012 GAAP Diluted $0.30 $0.43 $0.49 $1.21 - <$0.02> $2.41 -
EPS $1.28 $2.48
Impact of
Employee $0.04 - - - - $0.04
Separation
Charges (Note 1)
Subtotal of
Unusual Business $0.04 - - - - $0.04
Events
2012 Non-GAAP
Diluted EPS $1.21 - $2.45 -
Excluding Unusual $0.34 $0.43 $0.49 $1.28 <$0.02> $2.52
Business Events
(Note 3)
Q1 11 Q2 11 Q3 11 Q4 11 FY 11
Weighted
ACT ACT ACT ACT Share ACT
(13 (13 (13 (13 Effect (52
Weeks) Weeks) Weeks) Weeks) Weeks)
2011 GAAP Diluted $0.29 $0.37 $0.41 $1.17 <$0.02> $2.22
EPS
Impact of Asset
Impairment and
Early Lease
Termination $0.01 $0.00 $0.00 $0.01 - $0.02
Charges for
Underperforming
Retail
Stores (Note 2)
Subtotal of
Unusual Business $0.01 $0.00 $0.00 $0.01 - $0.02
Events
2011 Non-GAAP
Diluted EPS
Excluding Unusual $0.30 $0.37 $0.41 $1.17 <$0.01> $2.24
Business Events
(Note 3)**
Due to the differences between quarterly share counts and the
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.
Impact of Employee Separation Charges – During Q1 12, we incurred
charges of approximately $0.04 per diluted share or approximately 90
basis points of SG&A expenses and less than 10 basis points of gross
Note 1: margin, primarily associated with the previously announced retirement
of our former Executive Vice President, Chief Operating and Chief
Financial Officer. For FY 12, we anticipate approximately 20 basis
points of SG&A expenses and less than 10 basis points of gross margin.
These charges were recorded within the unallocated segment.
Impact of Asset Impairment and Early Lease Termination Charges for
Underperforming Retail Stores (FY 11) – During Q1 11, we incurred
charges associated with asset impairment and early lease terminations
of approximately $0.01 per diluted share or approximately 20 basis
points of SG&A expenses. During Q2 11, we incurred charges associated
with early lease terminations of approximately $0.00 per diluted
share, or less than 10 basis points of SG&A expenses and less than a
10 basis point impact to gross margin. During Q3 11, we incurred
charges associated with early lease terminations of approximately
Note 2: $0.00 per diluted share or less than a 10 basis point impact to gross
margin. For Q4 11, we incurred charges associated with asset
impairment and early lease terminations of approximately $0.01 per
diluted share, or less than 10 basis points of SG&A expenses and less
than a 10 basis point impact to gross margin. For FY 11, we incurred
total charges associated with asset impairment and early lease
terminations of approximately $0.02 per diluted share, or
approximately 10 basis points of SG&A expenses and less than a 10
basis point impact to gross margin. All of these charges were recorded
within the retail segment.
SEC Regulation G – Non-GAAP Information – This table includes one
non-GAAP financial measure, Diluted EPS Excluding Unusual Business
Events. We believe that this non-GAAP financial measure provides
meaningful supplemental information for investors regarding the
performance of our business and facilitates a meaningful evaluation of
Note 3: our quarterly and FY 12 diluted EPS actual results and guidance on a
comparable basis with our quarterly and FY 11 actual results. Our
management uses this non-GAAP financial measure in order to have
comparable financial results to analyze changes in our underlying
business from quarter to quarter. This non-GAAP financial measure
should be considered as a supplement to, and not as a substitute for,
or superior to, financial measures calculated in accordance with GAAP.
Contact:
WILLIAMS-SONOMA, INC.
Julie P. Whalen, 415-616-8524
EVP, Chief Financial Officer
-or-
Stephen C. Nelson, 415-616-8754
VP, Investor Relations
-or-
Gabrielle L. Rabinovitch, 415-616-7727
Director, Investor Relations
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