Williams-Sonoma has officially announced its operating results for the fourth quarter and fiscal year ending February 2, 2025 (fiscal 2024). The fourth quarter of fiscal 2024 included 14 weeks compared to the 13 weeks in the fourth quarter of fiscal 2023. Williams-Sonoma Additionally, fiscal 2024 was a 53-week year, while fiscal 2023 comprised 52 weeks.
Williams-Sonoma Laura Alber, President and Chief Executive Officer of Williams-Sonoma, Inc., shared her perspective on the company’s performance: “We are proud of our strong finish to 2024. In Q4, our comparable brand revenue exceeded expectations, increasing by 3.1%. Our profitability was robust, with an operating margin of 21.5% and earnings per share reaching $3.28. Williams-Sonoma This success reflects our resilient operating model, standout seasonal offerings, strategic collaborations, and notable improvements in retail and online furniture sales. Over the entire year, our comparable brand revenue was down by 1.6%, yet we delivered a record annual operating margin of 17.9% and full-year earnings per share of $8.50.”
Williams-Sonoma Alber continued, “As we look ahead to 2025, we remain confident in our strategies and competitive positioning. Despite economic uncertainties, we are committed to returning to growth, enhancing customer service, and driving profitability. Our innovative approach and operational efficiency set us up for a promising 2025.”
Fourth Quarter 2024 Financial Highlights:
- Comparable brand revenue: Increased by 3.1%.
- Gross margin: 47.3%, up 130 basis points (bps) from the previous year, driven by:
- Occupancy leverage (+80bps)
- Higher merchandise margins (+40bps)
- Supply chain efficiencies (+10bps)
- Occupancy costs: $205 million, a 1.6% decrease year-over-year.
- Selling, General & Administrative (SG&A) expenses:
- SG&A rate at 25.8%, down 10bps from last year.
- SG&A expenses of $635 million, representing a 7.6% increase year-over-year.
- Operating income: $530 million, marking a record operating margin of 21.5%, up 140bps from last year.
- Diluted earnings per share (EPS): $3.28, reflecting a 20.6% increase from the previous year.
- Impact of the additional 14th week: Contributed an estimated 510bps to revenue growth and 60bps to the operating margin.
Fiscal Year 2024 Financial Highlights:
- Comparable brand revenue: Decreased by 1.6%.
- Gross margin:
- Reported at 46.5%, benefiting from a 70bps gain due to an out-of-period freight adjustment in Q1 FY24.
- Excluding this adjustment, gross margin was 45.8%, reflecting a 320bps year-over-year increase on a GAAP basis.
- The increase was driven by:
- Higher merchandise margins (+170bps)
- Supply chain efficiencies (+130bps)
- Occupancy leverage (+20bps)
- Occupancy costs: $793 million, a 2.6% decrease compared to the prior year on a GAAP basis.
- SG&A expenses:
- SG&A rate increased to 27.9% on a GAAP basis, due to higher performance-based incentives and advertising expenses, partially offset by lower general expenses.
- Total SG&A expenses reached $2.15 billion, marking a 4.5% year-over-year increase on a GAAP basis.
- Operating income:
- Reported at $1.43 billion, with an operating margin of 18.6% (including the 70bps benefit from the Q1 FY24 freight adjustment).
- Excluding this adjustment, operating income was $1.38 billion, with an operating margin of 17.9%.
- Diluted EPS:
- Reported at $8.79, inclusive of a $0.29 per share benefit from the Q1 FY24 freight adjustment.
- Excluding this adjustment, diluted EPS was $8.50, marking a 16.8% increase on a GAAP basis and a 14.4% increase on a non-GAAP basis.
- Return on invested capital (ROIC): 54.0%, driven primarily by net earnings.
- Liquidity position:
- Maintained strong liquidity with $1.2 billion in cash and $1.4 billion in operating cash flow.
- Returned nearly $1.1 billion to stockholders through $807 million in stock repurchases and $280 million in dividends.
- Stock repurchase authorization of $1.2 billion remains under existing programs.
- Impact of the 53rd week: Estimated to contribute 150bps to revenue growth and 20bps to the operating margin in fiscal 2024.
Dividend Increase:
- Quarterly dividend increased by 16%, or $0.09, to $0.66 per share.
Fiscal 2025 Outlook:
- Fiscal 2025 will consist of 52 weeks, while fiscal 2024 included 53 weeks.
- Revenue expectations:
- Net revenues projected to range from -1.5% to +1.5%, reflecting the absence of a 53rd week.
- Comparable brand revenue expected to be flat to +3.0%.
- Operating margin projected between 17.4% and 17.8%, accounting for a 20bps impact from the 53rd week in fiscal 2024.
- Long-term outlook:
- Mid-to-high single-digit annual revenue growth anticipated.
- Operating margins expected to remain in the mid-to-high teens.
Out-of-Period Freight Adjustment in Q1 2024:
Following a review of past financials, Williams-Sonoma determined that it had over-recognized freight expenses in fiscal years 2021, 2022, and 2023, amounting to a cumulative $49 million. This adjustment was deemed immaterial to prior financial statements and was recorded in Q1 FY24, reducing the cost of goods sold and correcting the balance sheet.
Second Quarter 2024 Stock Split:
On July 9, 2024, Williams-Sonoma executed a 2-for-1 stock split through a stock dividend. All historical share and per-share figures in this release have been adjusted accordingly.
Conference Call and Webcast:
Williams-Sonoma, Inc. will host a live conference call on March 19, 2025, at 7:00 A.M. (PT).
SEC Regulation G – Non-GAAP Information:
This press release includes non-GAAP financial measures. Reconciliations to the most comparable GAAP measures can be found in Exhibit 1 of this release. Forward-looking non-GAAP guidance is not reconciled to GAAP due to the potential variability of certain excluded items such as exit costs, reduction-in-force initiatives, and impairment charges. Non-GAAP financial measures should be considered as supplemental information and not as replacements for GAAP financial measures.
Williams-Sonoma, Inc. remains committed to strong operational execution, strategic innovation, and delivering value to its customers and shareholders as it heads into fiscal 2025 with a clear roadmap for sustained growth and profitability.
