Williams-Sonoma(US:WSM)2024-08-22 12:03Revenue Performance - Q2 comparable brand revenue decreased by 3.3%[1] - Net revenues for the thirteen weeks ended July 28, 2024, were $1,788,307 thousand, a decrease of 3.9% compared to $1,862,614 thousand for the same period in 2023[15] - Net earnings for the twenty-six weeks ended July 28, 2024, increased to $491,411,000, compared to $358,038,000 for the same period in 2023, representing a growth of 37.1%[21] Profitability Metrics - Q2 operating margin was 16.2%, with diluted EPS growth of 11.5% to $1.74[1][2] - Gross profit increased to $826,326 thousand, representing 46.2% of revenues, compared to $757,567 thousand or 40.7% of revenues in the prior year[15] - Operating income for the quarter was $289,916 thousand, which is 16.2% of revenues, up from $271,548 thousand or 14.6% in the previous year[15] - Net earnings reached $225,745 thousand, a 12.6% margin, compared to $201,507 thousand or 10.8% in the same quarter last year[15] - Non-GAAP gross profit for the twenty-six weeks ended July 28, 2024, was $1,628,841,000, reflecting a gross margin of 47.2%, compared to $1,432,626,000 or 39.6% in the same period last year[25] Expense Management - SG&A expenses increased by 10.4% year-over-year to $536 million, with an SG&A rate of 30.0%[2][3] - Selling, general and administrative expenses for the second quarter were $536,410,000, accounting for 30.0% of revenues, compared to $486,019,000 or 26.1% in the prior year[25] Cash Flow and Liquidity - Strong liquidity position maintained with $1.3 billion in cash and operating cash flow of $246 million[3] - Net cash provided by operating activities for the twenty-six weeks ended July 28, 2024, was $473,283,000, down from $714,985,000 in the prior year[21] - Cash and cash equivalents at the end of the period were $1,265,259,000, compared to $514,435,000 at the end of the same period last year[21] - The company reported a net cash used in financing activities of $398,222,000, down from $476,593,000 in the previous year[21] Inventory and Asset Management - Merchandise inventories decreased by 4.1% year-over-year to $1.2 billion[3] - Total current assets as of July 28, 2024, were $2,744,297 thousand, up from $2,719,797 thousand at the end of January 2024[16] - Total assets decreased to $5,211,672 thousand from $5,273,548 thousand at the end of January 2024[16] - Total liabilities decreased to $2,961,442 thousand from $3,145,687 thousand at the end of January 2024[16] - Retained earnings increased to $1,728,063 thousand from $1,555,595 thousand at the end of January 2024[16] Future Outlook - Full year revenue outlook revised to a range of down 4.0% to down 1.5%, while operating margin guidance raised to 17.4% to 17.8%[2][4] - Fiscal 2024 is a 53-week year, expected to contribute 150 basis points to net revenue growth[4][5] - Long-term expectations include mid-to-high single-digit annual net revenue growth and operating margin in the mid-to-high teens[5] Store Operations - The company opened 6 new retail stores and closed 2, resulting in a total of 521 stores as of July 28, 2024[19] Tax and Exit Costs - The effective tax rate for the second quarter was 26.0%, compared to 26.7% in the prior year[23] - The company incurred exit costs of $17.9 million during Q1 2023, primarily related to the closure of a manufacturing facility[26]