WILLIAMS SONOMA INC - Quarter Report: 2024 April (Form 10-Q)

Operating lease liabilities Other current liabilities Total current liabilities Long-term operating lease liabilities Other long-term liabilities Total liabilities

Commitments and contingencies – See Note F

par value; shares authorized; issued

Common stock: $ par value; shares authorized; , and shares issued and outstanding at April 28, 2024, January 28, 2024 and April 30, 2023, respectively

Additional paid-in capital Retained earnings Accumulated other comprehensive loss()()()

Treasury stock, at cost: , and shares as of April 28, 2024, January 28, 2024 and April 30, 2023, respectively

()()()Total stockholders’ equity Total liabilities and stockholders’ equity$ $ $

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WILLIAMS-SONOMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

Common Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Total
Stockholders’
Equity

(In thousands)

Amount

Balance at January 28, 2024

()

Net earnings

—

Foreign currency translation adjustments

—

()

—

()

Change in fair value of derivative financial instruments, net of tax

—

Release of stock-based awards 1

()

—

()

Repurchases of common stock

()

—

()

Reissuance of treasury stock under stock-based compensation plans 1

—

()

—

Stock-based compensation expense

—

Dividends declared

—

()

—

()

Balance at April 28, 2024

()

Net cash used in financing activities()()Effect of exchange rates on cash and cash equivalents()()Net decrease in cash and cash equivalents()()Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period$ $

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

WILLIAMS-SONOMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A.

Beginning in fiscal 2021 and continuing through fiscal 2022, global supply chain disruptions caused delays in inventory receipts and backorder delays, increased raw material costs, and higher shipping-related charges. These disruptions improved in the fourth quarter of fiscal 2022. However, the costs from these supply chain challenges impacted our Condensed Consolidated Statement of Earnings in the first half of fiscal 2023.

Out-of-Period Adjustment

Subsequent to the filing of our Form 10-K, in April 2024, the Company determined that it over-recognized freight expense in fiscal years 2021, 2022 and 2023 for a cumulative amount of $ million. The Company evaluated the error, both qualitatively and quantitatively, and determined that no prior interim or annual periods were materially misstated. The Company then evaluated whether the cumulative amount of the over-accrual was material to its projected fiscal 2024 results, and determined the cumulative amount was not material. Therefore, the Condensed Consolidated Financial Statements for the thirteen weeks ended April 28, 2024 include an out-of-period adjustment of $ million to reduce cost of goods sold and accounts payable, which corrected the cumulative error on the balance sheet as of January 28, 2024.

NOTE B.

million unsecured revolving line of credit (the “Revolver”). Our Revolver may be used to borrow revolving loans or to request the issuance of letters of credit. We may, upon

Table of Contents

million to provide for a total of up to $ million of unsecured revolving credit.

During the thirteen weeks ended April 28, 2024 and April 30, 2023, we had borrowings under our Revolver. Additionally, as of April 28, 2024, issued but undrawn standby letters of credit of $ million were outstanding under our Revolver. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs. Our Revolver matures on September 30, 2026, at which time all outstanding borrowings must be repaid and all outstanding letters of credit must be cash collateralized. We may elect to extend the maturity date, subject to lender approval.

The interest rate applicable to the Revolver is variable and may be elected by us as: (i) the Secured Overnight Financing Rate ("SOFR") plus basis points and an applicable margin based on our leverage ratio, ranging from % to % or (ii) a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio, ranging from % to %.

Our Credit Facility contains certain restrictive loan covenants, including, among others, a financial covenant requiring a maximum leverage ratio (funded debt adjusted for operating lease liabilities to earnings before interest, income tax, depreciation, amortization and rent expense), and covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of assets. As of April 28, 2024, we were in compliance with our financial covenants under our Credit Facility and, based on our current projections, we expect to remain in compliance throughout the next 12 months.

Letter of Credit Facilities

We have unsecured letter of credit facilities for a total of $ million. Our letter of credit facilities contain covenants that are consistent with our Credit Facility. Interest on unreimbursed amounts under our letter of credit facilities accrues at a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio. As of April 28, 2024, the aggregate amount outstanding under our letter of credit facilities was $ million, which represents only a future commitment to fund inventory purchases to which we had not taken legal title. of our letter of credit facilities totaling $ million mature on August 18, 2024, and the latest expiration date possible for future letters of credit issued under these facilities is January 15, 2025. of the letter of credit facilities totaling $ million matures on September 30, 2026, which is also the latest expiration date possible for future letters of credit issued under the facility.

NOTE C.

million shares. As of April 28, 2024, there were approximately million shares available for future grant. Awards may be granted under our Plan to officers, associates and non-associate members of the Board of Directors of the Company (the “Board”) or any parent or subsidiary. Shares issued as a result of award exercises or releases are primarily funded with the issuance of new shares.

Stock Awards

Annual grants of stock awards are limited to shares on a per person basis. Stock awards granted to associates generally vest evenly over a period of for service-based awards. Certain performance-based awards, which have variable payout conditions based on predetermined financial targets, generally vest from the date of grant. Certain stock awards and other agreements contain vesting acceleration clauses which cover events including, but not limited to, retirement, disability, death, merger or a similar corporate event. Stock awards granted to non-associate Board members generally vest in . Non-associate Board members automatically receive stock awards on the date of their initial election to the Board and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-associate Board member). Non-associate directors may also elect, on terms prescribed by the Company, to receive all of their annual cash compensation to be earned in respect of the applicable fiscal year either in the form of (i) fully vested stock units or (ii) fully vested deferred stock units.

Stock-Based Compensation Expense

During the thirteen weeks ended April 28, 2024 and April 30, 2023, we recognized total stock-based compensation expense, as a component of selling, general and administrative expenses ("SG&A") of $ million and $ million, respectively.

Table of Contents

NOTE D.

$ Effect of dilutive stock-based awards Diluted$

Thirteen weeks ended April 30, 2023

Basic$ $ Effect of dilutive stock-based awards Diluted$

The effect of anti-dilutive stock-based awards was not material for the thirteen weeks ended April 28, 2024 and April 30, 2023, respectively.

NOTE E.

$ West Elm Williams Sonoma Pottery Barn Kids and Teen

Other 2

Total 3

$ $

1Includes business-to-business net revenues within each brand.

2Primarily consists of net revenues from Rejuvenation, our international franchise operations, Mark and Graham and GreenRow.

3Includes 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 April 28, 2024 and April 30, 2023, respectively.

$ $ International Total$ $ $

Table of Contents

NOTE F.

NOTE G.

billion, which replaced our existing program. During the thirteen weeks ended April 28, 2024, we repurchased shares of our common stock at an average cost of $ per share for an aggregate cost of $ million, excluding excise taxes on stock repurchases (net of issuances). As of April 28, 2024, there was $ million remaining under our current stock repurchase program.

During the thirteen weeks ended April 30, 2023, we repurchased shares of our common stock at an average cost of $ per share for an aggregate cost of $ million, excluding excise taxes on stock repurchases (net of issuances) of $ million.

As of April 28, 2024 and April 30, 2023, we held treasury stock of $ million and $ million, respectively, that represents the cost of shares available for issuance intended to satisfy future stock-based award settlements in certain foreign jurisdictions.

Stock repurchases under our program may be made through open market and privately negotiated transactions at times and in such amounts as management deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability and other market conditions.

Dividends

In March 2024, our Board of Directors authorized a % increase in our quarterly cash dividend, from $ to $ per common share, subject to capital availability. We declared cash dividends of $ and $ per common share during the thirteen weeks ended April 28, 2024 and April 30, 2023, respectively. Our quarterly cash dividend may be limited or terminated at any time.

Table of Contents

NOTE H.

During the thirteen weeks ended April 28, 2024, impairment charges were recognized.

During the thirteen weeks ended April 30, 2023, we recognized impairment charges of $ million, which consisted of: (i) the impairment of operating lease right-of-use assets of $ million, (ii) the impairment of property and equipment resulting from the exiting of Aperture, a division of our Outward, Inc. subsidiary, of $ million as well as (iii) the impairment of property and equipment due to lower projected revenues from underperforming stores in Australia of $ million, all of which is recognized within SG&A.

There were transfers in and out of Level 3 categories during the thirteen weeks ended April 28, 2024 and April 30, 2023.

Table of Contents

NOTE I.

)$()$()Foreign currency translation adjustments()— ()Change in fair value of derivative financial instruments— Other comprehensive income (loss)() ()Balance at April 28, 2024$()$()$()

Balance at January 29, 2023

$()$ $()Foreign currency translation adjustments()— ()Change in fair value of derivative financial instruments— Reclassification adjustment for realized (gain) loss on derivative financial instruments— ()()Other comprehensive income (loss)()()()Balance at April 30, 2023$()$ $()

2 Total comparable brand revenue growth includes the results of Rejuvenation and Mark and Graham.

STORE DATA


	Store Count					Average Leased Square Footage Per Store
	January 28, 2024	Openings	Closings	April 28, 2024	April 30, 2023	April 28, 2024	April 30, 2023
Pottery Barn	184	1	(1)	184	188	15,100	14,800
Williams Sonoma	156	—	—	156	165	6,900	6,900
West Elm	121	1	(1)	121	123	13,300	13,200
Pottery Barn Kids	46	—	(1)	45	46	7,900	7,700
Rejuvenation	11	—	—	11	9	8,100	8,000
Total	518	2	(3)	517	531	11,400	11,300
Store selling square footage at period-end						3,815,000	3,816,000
Store leased square footage at period-end						5,901,000	5,974,000

GROSS PROFIT


(In thousands)	April 28, 2024		% Net Revenues		April 30, 2023		% Net Revenues		May 1, 2022		% Net Revenues
Gross profit 1	$	802,515	48.3	%	$	675,059	38.5	%	$	828,548	43.8	%

1Includes occupancy expenses of $196.2 million, $202.6 million and $186.4 million for the first quarters of fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

Gross profit is equal to our net revenues less cost of goods sold. Cost of goods sold includes (i) cost of goods, which consists of cost of merchandise, inbound freight expenses, freight-to-store expenses and other inventory related costs such as replacements, damages, obsolescence and shrinkage; (ii) occupancy expenses, which consists of rent, other occupancy costs (including property taxes, common area maintenance and utilities) and depreciation; and (iii) shipping costs, which consists of third-party delivery services and shipping materials.

Table of Contents

Our classification of expenses in cost of goods sold may not be comparable to other public companies, as we do not include non-occupancy-related costs associated with our distribution network in cost of goods sold. These costs, which include distribution network employment, third-party warehouse management and other distribution-related administrative expenses, are recorded in selling, general and administrative expenses ("SG&A").

First Quarter of Fiscal 2024 vs. First Quarter of Fiscal 2023

Gross profit increased $127.5 million, or 18.9%, compared to the first quarter of fiscal 2023. Gross margin increased to 48.3% from 38.5% in the first quarter of fiscal 2023. The increase in gross margin of 980 basis points was primarily driven by (i) higher merchandise margins of 480 basis points, (ii) an out-of-period period freight adjustment of 290 basis points, (iii) supply chain efficiencies of 240 basis points, including reductions in returns, replacements, damages and accommodations as well as limiting out-of-market and multiple shipments, partially offset by (iv) the deleverage of occupancy costs of 30 basis points resulting from lower sales.

First Quarter of Fiscal 2023 vs. First Quarter of Fiscal 2022

Gross profit decreased $153.5 million or 18.5%, compared to the first quarter of fiscal 2022. Gross margin decreased to 38.5% from 43.8% in the first quarter of fiscal 2022. The decline in gross margin of 530 basis points was primarily driven by (i) higher input costs as we absorbed higher product costs, ocean freight, detention and demurrage due to the impact of supply chain disruption and global inflation pressures, (ii) higher outbound customer shipping costs due to out-of-market shipping and shipping multiple times for multi-unit orders, and (iii) higher occupancy costs resulting from incremental costs from our new distribution centers on the East and West Coasts to support our long-term growth, which was partially offset by (iv) the higher pricing power of our proprietary products, (v) our ongoing commitment to forgo site wide promotions and (vi) our retail store optimization initiatives.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


(In thousands)	April 28, 2024		% Net Revenues		April 30, 2023		% Net Revenues
Selling, general and administrative expenses	$	478,687	28.8	%	$	475,582	27.1	%

SG&A consists of non-occupancy related costs associated with our retail stores, distribution and manufacturing facilities, customer care centers, supply chain operations (buying, receiving and inspection) and corporate administrative functions. These costs include employment, advertising, third party credit card processing, impairment and other general expenses.

First Quarter of Fiscal 2024 vs. First Quarter of Fiscal 2023

SG&A increased $3.1 million, or 0.7%, compared to the first quarter of fiscal 2023. SG&A as a percentage of net revenues increased to 28.8% from 27.1% in the first quarter of fiscal 2023. This increase in rate was primarily driven by (i) an increase in advertising expenses to drive sales at an efficient return and (ii) an increase in employment expense due to higher performance-based incentive compensation, which does not include any benefit from the out-of-period freight adjustment, partially offset by (iii) exit costs of $15.8 million and reduction-in-force initiatives of $8.3 million totaling $24.1 million in the first quarter of fiscal 2023 which did not recur in the first quarter of fiscal 2024.

INCOME TAXES

The effective tax rate was 21.8% for the first quarter of fiscal 2024 compared to 23.6% for the first quarter of fiscal 2023. The decrease in the tax rate is primarily due to (i) higher excess tax benefit from stock-based compensation in the first quarter of 2024 and (ii) the tax effect of earnings mix change, partially offset by (iii) the expiration of the statues of limitations related to uncertain tax positions in fiscal 2023.

Since the Organization for Economic Co-operation and Development ("OECD") announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting ("Framework") in 2021, a number of countries have begun to enact legislation to implement the OECD international tax framework, including the Pillar Two minimum tax regime. To mitigate the administrative burden for Multinational Enterprises in complying with the OECD Global Anti-Base Erosion rules during the initial years of implementation, the OECD developed the temporary “Transitional Country-by-Country Safe Harbor” ("Safe Harbor"). This transitional Safe Harbor applies for fiscal years beginning on or before December 31, 2026, but not including a fiscal year that ends after June 30, 2028. Under the Safe Harbor, the top-up tax for such jurisdiction is deemed to be zero, provided that at least one of the Safe Harbor tests is met for the jurisdiction.

Table of Contents

In the regions in which we operate, United Kingdom, Netherlands, Italy and Vietnam have implemented Pillar Two frameworks effective January 1, 2024. The Company's subsidiaries are not subject to Pillar Two minimum tax in the first quarter of fiscal 2024 under the Safe Harbor rules.

Pillar Two minimum tax will be treated as a period cost in future periods when it is applicable. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, and monitoring legislative developments by other countries, especially in the regions in which we operate.

LIQUIDITY AND CAPITAL RESOURCES

Material Cash Requirements

There were no material changes during the quarter to the Company’s material cash requirements, commitments and contingencies that are described in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2024, which is incorporated herein by reference.

Stock Repurchase Program and Dividends

See Note G to our Condensed Consolidated Financial Statements, Stock Repurchase Program and Dividends, within Item 1 of this Quarterly Report on Form 10-Q for further information.

Liquidity Outlook

For the remainder of fiscal 2024, we plan to use our cash resources to fund our inventory and inventory-related purchases, employment-related costs, advertising and marketing initiatives, the payment of income taxes, property and equipment purchases, rental payments on our leases, dividend payments and stock repurchases.

We believe our cash on hand, cash flows from operations, and our available credit facilities will provide adequate liquidity for our business operations as well as dividends, capital expenditures, stock repurchases and other liquidity requirements associated with our business operations over the next 12 months. We are currently not aware of any other trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months.

Sources of Liquidity

As of April 28, 2024, we held $1.3 billion in cash and cash equivalents, the majority of which was held in interest-bearing demand deposit accounts and money market funds, and of which $83.3 million was held by our international subsidiaries. As is consistent within our industry, our cash balances are seasonal in nature, with the fourth quarter historically representing a significantly higher level of cash than other periods.

In addition to our cash balances on hand, we have a credit facility (the "Credit Facility") which provides for a $500 million unsecured revolving line of credit (the “Revolver”). Our Revolver may be used to borrow revolving loans or to request the issuance of letters of credit. We may, upon notice to the administrative agent, request existing or new lenders, at such lenders’ option, to increase the Revolver by up to $250 million to provide for a total of up to $750 million of unsecured revolving credit.

During the thirteen weeks ended April 28, 2024 and April 30, 2023, we had no borrowings under our Revolver. Additionally, as of April 28, 2024, issued but undrawn standby letters of credit of $10.9 million were outstanding under our Revolver. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs.

Letter of Credit Facilities

We have three unsecured letter of credit facilities for a total of $35 million. Our letter of credit facilities contain covenants that are consistent with our Credit Facility. Interest on unreimbursed amounts under our letter of credit facilities accrues at a base rate as defined in the Credit Facility, plus an applicable margin based on our leverage ratio. As of April 28, 2024, the aggregate amount outstanding under our letter of credit facilities was $0.4 million, which represents only a future commitment to fund inventory purchases to which we had not taken legal title. Two of our letter of credit facilities totaling $30 million mature on August 18, 2024, and the latest expiration date possible for future letters of credit issued under these facilities is January 15,

Table of Contents

2025. One of the letter of credit facilities totaling $5 million matures on September 30, 2026, which is also the latest expiration date possible for future letters of credit issued under the facility.

Cash Flows from Operating Activities

For the first quarter of fiscal 2024, net cash provided by operating activities was $226.8 million compared to $342.5 million for the first quarter of fiscal 2023. For the first quarter of fiscal 2024, net cash provided by operating activities was primarily attributable to net earnings adjusted for non-cash items and an increase in income taxes payable, partially offset by accounts payable (as a result of supplier payment timing and the out-of-period adjustment) and accrued expenses and other liabilities. Net cash provided by operating activities compared to the first quarter of fiscal 2023 decreased primarily due to a decrease in accounts payable (as a result of supplier payment timing), partially offset by an increase in net earnings adjusted for non-cash items.

Cash Flows from Investing Activities

For the first quarter of fiscal 2024, net cash used in investing activities was $39.5 million compared to $49.9 million for the first quarter of fiscal 2023, and was primarily attributable to purchases of property and equipment related to technology, supply chain enhancements and store construction.

Cash Flows from Financing Activities

For the first quarter of fiscal 2024, net cash used in financing activities was $193.7 million compared to $362.4 million for the first quarter of fiscal 2023, primarily driven by tax withholdings remittance related to stock-based awards, payment of dividends and repurchases of common stock. Net cash used in financing activities for the first quarter of fiscal 2024 decreased compared to the first quarter of fiscal 2023, primarily due to a decrease in repurchases of common stock, partially offset by higher tax withholdings remittance related to stock-based awards (as a result of remittance timing).

Seasonality

Our business is subject to substantial seasonal variations in demand. Historically, a significant portion of our revenues and net earnings have been realized during the period from October through January, and levels of net revenues and net earnings have typically been lower during the period from February through September. We believe this is the general pattern associated with the retail industry. In preparation for and during our holiday selling season, we hire a substantial number of additional temporary associates, primarily in our retail stores, distribution facilities and customer care centers.

CRITICAL ACCOUNTING ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. These estimates and assumptions are evaluated on an ongoing basis and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ significantly from these estimates. During the first quarter of fiscal 2024, there were no significant changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2024.

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks, which include significant deterioration of the U.S. and foreign markets, changes in U.S. interest rates, foreign currency exchange rate fluctuations, and the effects of economic uncertainty which may affect the prices we pay our vendors in the foreign countries in which we do business. We do not engage in financial transactions for trading or speculative purposes.

Interest Rate Risk

Our Revolver has a variable interest rate which, when drawn upon, subjects us to risks associated with changes in that interest rate. During the first quarter of fiscal 2024, we had no borrowings under our Revolver.

In addition, we have fixed and variable income investments consisting of short-term investments classified as cash and cash equivalents, which are also affected by changes in market interest rates. As of April 28, 2024, our investments, made primarily in interest-bearing demand deposit accounts and money market funds, are stated at cost and approximate their fair values.

Foreign Currency Risks

We purchase the majority of our inventory from suppliers outside of the U.S. in transactions that are primarily denominated in U.S. dollars and, as such, any foreign currency impact related to these international purchase transactions was not significant to us during the first quarter of fiscal 2024 or the first quarter of fiscal 2023. Since we pay for the majority of our international purchases in U.S. dollars, however, a decline in the U.S. dollar relative to other foreign currencies would subject us to risks associated with increased purchasing costs from our suppliers in their effort to offset any lost profits associated with any currency devaluation. We cannot predict with certainty the effect these increased costs may have on our financial statements or results of operations.

In addition, our businesses in Canada, Australia and the United Kingdom, and our operations throughout Asia and Europe, expose us to market risk associated with foreign currency exchange rate fluctuations. Substantially all of our purchases and sales are denominated in U.S. dollars, which limits our exposure to this risk. However, some of our foreign operations have a functional currency other than the U.S. dollar. While the impact of foreign currency exchange rate fluctuations was not material to us in the first quarter of fiscal 2024 or the first quarter of fiscal 2023, we have continued to see volatility in the exchange rates in the countries in which we do business. Additionally, the effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our historical or current Condensed Consolidated Financial Statements. As we continue to expand globally, the foreign currency exchange risk related to our foreign operations may increase. To mitigate this risk, we may hedge a portion of our foreign currency exposure with foreign currency forward contracts in accordance with our risk management policies.

Inflation

While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we have experienced varying levels of inflation, resulting in part from various supply chain disruptions, increased shipping and transportation costs, increased product costs, increased labor costs in the supply chain and other disruptions caused by the pandemic and the uncertain economic environment. We believe the effects of inflation, if any, on our financial statements and results of operations have been immaterial to date. However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future, including by the heightened levels of inflation experienced globally during the first quarter of fiscal 2024 and the first quarter of fiscal 2023. Global trends, including inflationary pressures, are weakening customer sentiment, negatively impacting consumer spending behavior and slowing down consumer demand for our products. However, our unique operating model and pricing power helped mitigate these increased costs during the first quarter of fiscal 2024 and the first quarter of fiscal 2023. Our inability or failure to offset the impact of inflation could harm our business, financial condition and results of operations.

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of April 28, 2024, an evaluation was performed by management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for timely discussions regarding required disclosures, and that such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the first quarter of fiscal 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information required by this Item is contained in Note F to our Condensed Consolidated Financial Statements within Part I of this Form 10-Q.

ITEM 1A. RISK FACTORS

See Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2024 for a description of the risks and uncertainties associated with our business. There were no material changes to such risk factors in the current quarterly reporting period.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In March 2024, our Board of Directors authorized a new stock repurchase program for $1.0 billion, which replaced our existing program.

The following table provides information as of April 28, 2024 with respect to shares of common stock we repurchased during the first quarter of fiscal 2024. For additional information, please see Note G to our Condensed Consolidated Financial Statements within Part I of this Form 10-Q.


Fiscal Period	Total Number of Shares Purchased 1	Average Price Paid Per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program 1	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program
January 29, 2024 - February 25, 2024	—	$	—	—	$	686,999,000
February 26, 2024 - March 24, 2024	39,629	$	279.92	39,629	$	988,907,000
March 25, 2024 - April 28, 2024	117,270	$	278.75	117,270	$	956,219,000
Total	156,899	$	279.04	156,899	$	956,219,000

1 Excludes shares withheld for employee taxes upon vesting of stock-based awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Insider Adoption or Termination of Trading Arrangements

During the first quarter of fiscal 2024, none of our directors or officers or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Table of Contents

ITEM 6. EXHIBITS

(a) Exhibits


Exhibit Number						Exhibit Description


31.1*						Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

31.2*						Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended

32.1*						Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*						Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*						The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 28, 2024, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Earnings, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags

104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted under Exhibit 101).

Filed herewith

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


WILLIAMS-SONOMA, INC.

By:						/s/ Jeffrey E. Howie
						Jeffrey E. Howie
						Executive Vice President and Chief Financial Officer
						(Principal Financial Officer)


By:						/s/ Jeremy Brooks
						Jeremy Brooks
						Senior Vice President and Chief Accounting Officer
						(Principal Accounting Officer)

Date: May 24, 2024

WILLIAMS SONOMA INC - Quarter Report: 2024 April (Form 10-Q)

Similar companies