WILLIAMS SONOMA INC - Quarter Report: 2025 May (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

Stockholders’ equity

Preferred stock: $ par value; shares authorized; issued

Common stock: $ par value; shares authorized; , and shares issued and outstanding at May 4, 2025, February 2, 2025 and April 28, 2024, respectively

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

Treasury stock, at cost: , and shares as of May 4, 2025, February 2, 2025 and April 28, 2024, respectively

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

See Notes to Condensed Consolidated Financial Statements.

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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 February 2, 2025

()

Net earnings

—

Foreign currency translation adjustments

—

Release of stock-based awards 1

()

—

()

Repurchases of common stock 2

()

—

()

Reissuance of treasury stock under stock-based compensation plans 1

—

()

—

Stock-based compensation expense

—

Dividends declared

—

()

—

()

Balance at May 4, 2025

()

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.

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WILLIAMS-SONOMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A.

Common Stock Split

On July 9, 2024, we effected a -for-1 stock split of our common stock through a stock dividend. All historical share and per share amounts, excluding treasury share amounts, in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $ per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from additional paid-in capital to common stock.

Out-of-Period Freight Adjustment in First Quarter of Fiscal 2024

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

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NOTE B.

million unsecured revolving line of credit. Our Credit Facility 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 Credit Facility by up to $ million to provide for a total of up to $ million of unsecured revolving credit.

During the thirteen weeks ended May 4, 2025 and April 28, 2024, we had borrowings under our Credit Facility. Additionally, as of May 4, 2025, issued but undrawn standby letters of credit of $ million were outstanding under our Credit Facility. The standby letters of credit were primarily issued to secure the liabilities associated with workers’ compensation and other insurance programs. Our Credit Facility 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 Credit Facility 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 May 4, 2025, 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 May 4, 2025, 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 mature on August 18, 2025, and the latest expiration date possible for future letters of credit issued under these facilities is January 15, 2026. 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 May 4, 2025, 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 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 of Directors members generally vest in . Non-associate Board of Directors members automatically receive stock awards on the date of their initial election to the Board of Directors and annually thereafter on the date of the annual meeting of stockholders (so long as they continue to serve as a non-associate Board of Directors 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

million and $ million, respectively.

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NOTE D.

$ Effect of dilutive stock-based awards Diluted$

Thirteen weeks ended April 28, 2024

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

1Other segment items within operating income include general expenses, which consist primarily of credit card fees, data processing expenses and administrative expenses.

The following table summarizes our net revenues by brand for the thirteen weeks ended May 4, 2025 and April 28, 2024.


(In thousands)	May 4, 2025	April 28, 2024
Pottery Barn	$	$
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 May 4, 2025 and April 28, 2024, respectively.

$ $ International Total$ $ $

NOTE F.

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NOTE G.

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 May 4, 2025, there was $ million remaining under the $ billion stock repurchase program we announced in March 2024. In September 2024, our Board of Directors authorized a new $ billion stock repurchase program, which will become effective once the program we announced in March 2024 is fully utilized. As of May 4, 2025, the total stock repurchase authorization remaining under these programs was approximately $ billion.

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 May 4, 2025, February 2, 2025 and April 28, 2024, we held treasury stock of $ million, $ 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 programs 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

On July 9, 2024, we effected a 2-for-1 stock split of our common stock through a stock dividend. The prior cash dividends per share have been retroactively adjusted to reflect the stock split. See Note A for further information.

In March 2025, 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 May 4, 2025 and April 28, 2024, respectively. Our quarterly cash dividend may be limited or terminated at any time.

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NOTE H.

During the thirteen weeks ended May 4, 2025 and April 28, 2024, impairment charges were recognized.

There were transfers in and out of Level 3 categories during the thirteen weeks ended May 4, 2025 and April 28, 2024.

NOTE I.

)$ $()Foreign currency translation adjustments — Other comprehensive income (loss) Balance at May 4, 2025$()$ $()

Balance at January 28, 2024

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

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NOTE J.

As of May 4, 2025, February 2, 2025 and April 28, 2024, we recorded a liability for expected sales returns of approximately $ million, $ million and $ million, respectively, within other current liabilities and a corresponding asset for the expected net realizable value of the merchandise inventory to be returned of approximately $ million, $ million and $ million, respectively, within other current assets in our Condensed Consolidated Balance Sheets.

See Note E for the disclosure of our net revenues by operating segment.

, the majority of which is recognized within of the card issuance. Breakage revenue is not material to our Condensed Consolidated Financial Statements.

We have customer loyalty programs, which allow members to earn points for each qualifying purchase. Customers can earn points through spend on both our private label and co-branded credit cards, or can earn points as part of our non-credit card related loyalty program. Points earned through both loyalty programs enable members to receive certificates that may be redeemed on future merchandise purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points or certificates earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Condensed Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be issued and redeemed, based on historical patterns. This measurement is applied to our portfolio of performance obligations for points or certificates earned, as all obligations have similar economic characteristics. We believe the impact to our Condensed Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than , as our certificates generally expire within of issuance.

We enter into agreements with credit card issuers in connection with our private label and co-branded credit cards, whereby we receive cash incentives in exchange for promised services, such as licensing our brand names and marketing the credit card program to customers. These separate non-loyalty program related services promised under these agreements are interrelated and are thus considered a single performance obligation. Revenue is recognized over time as we transfer promised services throughout the contract term.

As of May 4, 2025, February 2, 2025 and April 28, 2024, we had recorded $ million, $ million and $ million, respectively, for gift card and other deferred revenue within current liabilities in our Condensed Consolidated Balance Sheets.

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NOTE K.

$ $ Gross profit () Selling, general and administrative expenses ()

Operating income

() Earnings before income taxes () Income taxes () Net earnings$ $()$ Basic earnings per share$ $()$ Diluted earnings per share$ $()$

Condensed Consolidated Statement of Comprehensive Income (unaudited)

For the Thirteen Weeks Ended April 28, 2024

(In thousands)

As Previously Reported

Adjustments

As
Corrected

Net earnings

()

Comprehensive income

()

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$()$ Total current assets () Total assets () Accrued expenses () Income taxes payable () Total current liabilities () Total liabilities () Retained earnings () Total stockholders’ equity () Total liabilities and stockholders’ equity$ $()$

Condensed Consolidated Statement of Stockholders' Equity (unaudited)


	Retained Earnings	Total Stockholders’ Equity
(In thousands)
As Previously Reported
Balance at January 28, 2024	$	$
Net earnings
Balance at April 28, 2024
Adjustments
Net earnings	()	()
Balance at April 28, 2024	()	()
As Corrected
Balance at January 28, 2024
Net earnings
Balance at April 28, 2024	$	$

2 Total comparable brand revenue growth (decline) includes the results of Rejuvenation, Mark and Graham, and GreenRow.

STORE DATA


	Store Count					Average Leased Square Footage Per Store
	February 2, 2025	Openings	Closings	May 4, 2025	April 28, 2024	May 4, 2025	April 28, 2024
Pottery Barn	181	2	(3)	180	184	14,900	15,100
Williams Sonoma	154	—	—	154	156	6,900	6,900
West Elm	121	1	(3)	119	121	13,300	13,300
Pottery Barn Kids	45	—	(1)	44	45	7,800	7,900
Rejuvenation	11	—	—	11	11	8,100	8,100
Total	512	3	(7)	508	517	11,300	11,400
Store selling square footage at period-end						3,751,000	3,815,000
Store leased square footage at period-end						5,761,000	5,901,000

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GROSS PROFIT

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.

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”).


(In thousands)	May 4, 2025		% Net Revenues		April 28, 2024		% Net Revenues
Gross profit 1	$	765,809	44.3	%	$	795,168	47.9	%

1Includes occupancy expenses of $197.7 million and $196.2 million for the first quarter of fiscal 2025 and fiscal 2024, respectively.

First Quarter of Fiscal 2025 vs. First Quarter of Fiscal 2024

Gross profit decreased $29.4 million, or 3.7%, compared to the first quarter of fiscal 2024. Gross margin decreased to 44.3% from 47.9% in the first quarter of fiscal 2024. This decrease in gross margin of 360 basis points was driven by (i) the out-of-period freight adjustment in the first quarter of fiscal 2024 of 300 basis points and (ii) lower merchandise margins of 220 basis points due to higher input costs, including higher ocean freight and tariff mitigation costs, partially offset by (iii) supply chain efficiencies of 120 basis points, including reductions in returns, accommodations, replacements and damages and (iv) the leverage of occupancy costs of 40 basis points resulting from higher sales.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

SG&A consists of non-occupancy related costs associated with our retail stores and e-commerce websites, 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.


(In thousands)	May 4, 2025		% Net Revenues		April 28, 2024		% Net Revenues
Selling, general and administrative expenses	$	475,096	27.5	%	$	478,056	28.8	%

First Quarter of Fiscal 2025 vs. First Quarter of Fiscal 2024

SG&A decreased $3.0 million, or 0.6%, compared to the first quarter of fiscal 2024. SG&A as a percentage of net revenues decreased to 27.5% from 28.8% in the first quarter of fiscal 2024. This leverage of 130 basis points was primarily driven by (i) lower advertising expenses of 60 basis points, (ii) employment leverage of 60 basis points resulting from higher sales and lower performance-based incentive compensation and (iii) general expenses leverage of 10 basis points.

INCOME TAXES

The effective tax rate was 23.0% for the first quarter of fiscal 2025, compared to 21.8% for the first quarter of fiscal 2024. The increase was primarily driven by (i) lower excess tax benefit from stock-based compensation in first quarter of fiscal 2025 and (ii) the tax effect of the change in earnings mix.

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.

Of the regions in which we operate, Singapore, Canada, United Kingdom, Australia, Netherlands, Italy, Portugal, Vietnam and Jersey have implemented Pillar Two frameworks. Our subsidiaries were not subject to Pillar Two minimum tax in the first quarter of fiscal 2025.

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.

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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 February 2, 2025, which is incorporated herein by reference.

Stock Repurchase Programs and Dividends

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

Liquidity Outlook

For the remainder of fiscal 2025, we plan to use our cash resources to fund our inventory purchases, employment-related costs, advertising and marketing initiatives, dividend payments, capital expenditures, stock repurchases, rental payments on our leases and the payment of income taxes.

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 would impact our capital needs during or beyond the next 12 months.

Sources of Liquidity

As of May 4, 2025, we held $1.0 billion in cash and cash equivalents, the majority of which was held in money market funds and interest-bearing demand deposit accounts, and of which $96.1 million was held by our international subsidiaries. Consistent with 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. Our Credit Facility 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 Credit Facility by up to $250 million to provide for a total of up to $750 million of unsecured revolving credit.

During the thirteen weeks ended May 4, 2025 and April 28, 2024, we had no borrowings under our Credit Facility. Additionally, as of May 4, 2025, issued but undrawn standby letters of credit of $11.9 million were outstanding under our Credit Facility. 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 May 4, 2025, the aggregate amount outstanding under our letter of credit facilities was $0.7 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 mature on August 18, 2025, and the latest expiration date possible for future letters of credit issued under these facilities is January 15, 2026. 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 2025, net cash provided by operating activities was $118.9 million compared to $226.8 million for the first quarter of fiscal 2024, and was primarily attributable to net earnings adjusted for non-cash items, partially offset by accounts payable (as a result of supplier payment timing) and accrued expenses and other liabilities. Net cash provided by operating activities compared to the first quarter of fiscal 2024 decreased primarily due to a decrease in net earnings adjusted for non-cash items, higher spending on merchandise inventories and a decrease in accrued expenses and other liabilities.

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Cash Flows from Investing Activities

For the first quarter of fiscal 2025, net cash used in investing activities was $58.2 million compared to $39.5 million for the first quarter of fiscal 2024, 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 2025, net cash used in financing activities was $230.0 million compared to $193.7 million for the first quarter of fiscal 2024, primarily driven by repurchases of common stock, payment of dividends and tax withholdings remittance related to stock-based awards. Net cash used in financing activities for the first quarter of fiscal 2025 increased compared to the first quarter of fiscal 2024, primarily due to an increase in repurchases of our common stock.

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 our peak selling season, 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 within our industry. In preparation for and during our peak 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 2025, there were no significant changes to the critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended February 2, 2025.

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, inflation and the effects of economic uncertainty which may affect the prices we pay our suppliers 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 Credit Facility 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 2025, we had no borrowings under our Credit Facility.

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 May 4, 2025, our investments, made primarily in money market funds and interest-bearing demand deposit accounts, 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 2025 or the first quarter of fiscal 2024. 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.

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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 2025 or the first quarter of fiscal 2024, 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 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 2025 and the first quarter of fiscal 2024. 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 2025 and the first quarter of fiscal 2024. Our inability or failure to offset the impact of inflation could harm our business, financial condition and results of operations.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of May 4, 2025, 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 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 February 2, 2025 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

The following table provides information as of May 4, 2025 with respect to shares of common stock we repurchased during the first quarter of fiscal 2025 under the $1.0 billion stock repurchase program announced in March 2024 (the “March 2024 program”).


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	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
February 3, 2025 - March 2, 2025	—	$	—	—	$	192,523,000
March 3, 2025 - March 30, 2025	326,584	$	158.95	326,584	$	140,612,000
March 31, 2025 - May 4, 2025	272,607	$	139.62	272,607	$	102,552,000
Total	599,191	$	150.15	599,191	$	102,552,000

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

Additionally, in September 2024, our Board of Directors authorized a new $1.0 billion stock repurchase program (together with the March 2024 program, “our programs”), which will become effective once our March 2024 program is fully utilized. As of May 4, 2025, we had a total of $1.1 billion in stock repurchase authorization remaining under our programs. For additional information, please see Note G to our Condensed Consolidated Financial Statements within Part I of this Form 10-Q.

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 2025, 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.

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ITEM 6. EXHIBITS

(a) Exhibits


Exhibit Number						Exhibit Description

10.1*+						Williams-Sonoma, Inc. 2021 Incentive Bonus Plan, as amended

10.2*+						Amended and Restated 2012 EVP Level Management Retention Plan

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 May 4, 2025, 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.

Indicates a management contract or compensation plan or arrangement.

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 28, 2025

WILLIAMS SONOMA INC - Quarter Report: 2025 May (Form 10-Q)

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