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 Williams-Sonoma, Inc. announces fourth quarter and fiscal year 2016 resultsQ4 GAAP EPS of $1.63 and non-GAAP EPS of $1.55Q4 gross margin expands 100bps; merchandise inventories decrease 0.1%
   Wednesday, March 15, 2017 4:15:01 PM ET

Williams-Sonoma, Inc. (WSM ) today announced operating results for the fourth fiscal quarter ("Q4 16") and fiscal year 2016 ("FY 16") ended January 29, 2017 versus the fourth fiscal quarter ("Q4 15") and fiscal year 2015 ("FY 15") ended January 31, 2016.

4th QUARTER 2016 RESULTS

          -   Q4 16 net revenues decreased 0.3% to $1.582 billion versus $1.586
                                                                                                                                billion in Q4 15 with comparable brand revenue decreasing 0.9%.
                                                                                                                                 
                                                                                                         -                      Q4 16 operating margin was 13.6% versus 14.0% in Q4 15.
                                                                                                                                 
                                                                                                         -                      Q4 16 diluted earnings per share ("EPS") was $1.63 versus $1.55 in
                                                                                                                                Q4 15. Excluding the net benefit of approximately $0.08 per diluted
                                                                                                                                share from a one-time favorable tax adjustment, non-GAAP EPS was
                                                                                                                                $1.55 in Q4 16. See Exhibit 1 for a reconciliation of GAAP to
                                                                                                                                non-GAAP EPS.
                                                                                                                                 
                                                                                                         -                      Cash returned to stockholders totaled $69 million, comprising $36
                                                                                                                                million in stock repurchases and $33 million in dividends.
                                                                                                                                 


FISCAL YEAR 2016 RESULTS

          -   FY 16 net revenues grew 2.2% to $5.084 billion versus $4.976 billion
                                                                                                                                in FY 15 with comparable brand revenue growth of 0.7%.
                                                                                                                                 
                                                                                                         -                      FY 16 operating margin was 9.3% versus 9.8% in FY 15. Excluding
                                                                                                                                severance-related reorganization charges, non-GAAP operating margin
                                                                                                                                was 9.6% in FY 16. See Exhibit 1 for a reconciliation of GAAP to
                                                                                                                                non-GAAP operating margin.
                                                                                                                                 
                                                                                                         -                      FY 16 diluted earnings per share ("EPS") was $3.41 versus $3.37 in
                                                                                                                                FY 15. Excluding severance-related reorganization charges of
                                                                                                                                approximately $0.10 per diluted share and the net benefit of
                                                                                                                                approximately $0.08 per diluted share from a one-time favorable tax
                                                                                                                                adjustment, non-GAAP EPS was $3.43 in FY 16. See Exhibit 1.
                                                                                                                                 
                                                                                                         -                      Cash returned to stockholders totaled $285 million, comprising $151
                                                                                                                                million in stock repurchases and $134 million in dividends.
                                                                                                                                 

Laura Alber, President and Chief Executive Officer, commented: "In 2016, we delivered revenues of over $5 billion, which included another year of double-digit growth across West Elm, our newer businesses Rejuvenation and Mark and Graham, and our company-owned global operations. Additionally, from an operational perspective, we executed one of our best holiday seasons and delivered an improved customer experience which is at the center of everything we do."

Alber continued, "Entering 2017, we will continue to improve performance and increase our competitive advantage, with a focus on innovation in e-commerce, our products and service, and the retail experience. We will also remain relentlessly focused on operational excellence throughout our supply chain, driving strategies that will improve our customers’ experience across all of our brands. We are optimistic about the future and believe we have the infrastructure, strategies and talent in place to drive long-term profitable growth for our shareholders."

4th QUARTER 2016 RESULTS

Net revenues decreased 0.3% to $1.582 billion in Q4 16 from $1.586 billion in Q4 15.

Comparable brand revenue in Q4 16 decreased 0.9% compared to 0.8% growth in Q4 15 as shown in the table below:

 
                                                                                                         4th Quarter Comparable Brand Revenue
                                                                                                                  Growth by Concept*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
             Q4 16             Q4 15
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------
Pottery Barn                   (4.1%)            (2.0%)
Williams Sonoma                                                                                                                1.4%                                                                                                             0.9%
West Elm                                                                                                                       6.5%                                                                                                             12.8%
Pottery Barn Kids                                                                                                             (4.9%)                                                                                                            0.1%
PBteen                         (8.1%)            (12.2%)
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- -------------------- -------
Total                          (0.9%)             0.8%
==================== ==================== ==================== ==================== ==================== ==================== ====== ==================== ==================== ==================== ==================== ==================== =======
* See the Company’s 10-K and 10-Q filings for the definition of
comparable brand revenue.
 

E-commerce net revenues in Q4 16 increased 2.2% to $809 million from $792 million in Q4 15. E-commerce net revenues generated 51.1% of total company net revenues in Q4 16 and 49.9% of total company net revenues in Q4 15.

Retail net revenues in Q4 16 decreased 2.7% to $773 million from $794 million in Q4 15.

Operating margin in Q4 16 was 13.6% compared to 14.0% in Q4 15:

          -     Gross margin was 39.3% in Q4 16 versus 38.3% in Q4 15.
                                                                                                                                                      
                                                                                                         -                                           Selling, general and administrative ("SG&A") expenses were $406
                                                                                                                                                     million, or 25.7% of net revenues in Q4 16, versus $385 million, or
                                                                                                                                                     24.3% of net revenues in Q4 15.
                                                                                                                                                      

The effective income tax rate in Q4 16 was 33.0% versus 36.6% in Q4 15, reflecting a one-time favorable tax adjustment. Excluding this adjustment, the effective tax rate in Q4 16 was 36.5%. See Exhibit 1 for a reconciliation of GAAP to non-GAAP effective income tax rate.

EPS in Q4 16 was $1.63 versus $1.55 in Q4 15. Excluding the tax adjustment, non-GAAP EPS was $1.55 in Q4 16. See Exhibit 1.

FISCAL YEAR 2016 RESULTS

Net revenues increased 2.2% to $5.084 billion in FY 16 from $4.976 billion in FY 15.

Comparable brand revenue in FY 16 increased 0.7% on top of 3.7% in FY 15 as shown in the table below:

 
                                                                                                             Fiscal Year Net Revenues and Comparable Brand Revenue Growth by
                                                                                                                                        Concept*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                         Net Revenues (Millions)                                            Comparable Brand
                                                                                                                                                                                                                                                     Revenue Growth
-------------------- -------------------- -------------------- -------------------- ----------------------------------------------------    -------------------- -------------------- -------------------- -------------------- ----------------------------------------------------
         FY 16      FY 15          FY 16      FY 15
-------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- ------
Pottery Barn               $2,024     $2,074         (3.5%)       1.9%
Williams Sonoma                                                                      1,002                                              994                                                                                       1.3%                                             1.1%
West Elm                                                                               972                                              821                                                                                      12.8%                                            14.8%
Pottery Barn Kids                                                                      635                                              640                                                                                     (1.4%)                                             2.2%
PBteen                                                                                 238                                              254                                                                                     (6.2%)                                           (2.7%)
Other                         213        193            N/A        N/A
-------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- ------
Total                      $5,084     $4,976           0.7%       3.7%
==================== ==================== ==================== ==================== ====== ==================== ==================== ====== ==================== ==================== ==================== ==================== ====== ==================== ==================== ======
* See the Company’s 10-K and 10-Q filings for the definition of
comparable brand revenue.
 

E-commerce net revenues in FY 16 increased 4.4% to $2.634 billion from $2.523 billion in FY 15. E-commerce net revenues generated 51.8% of total company net revenues in FY 16 and 50.7% of total company net revenues in FY 15.

Retail net revenues in FY 16 decreased 0.1% to $2.450 billion from $2.454 billion in FY 15.

Operating margin in FY 16 was 9.3% compared to 9.8% in FY 15. Excluding severance-related reorganization charges, non-GAAP operating margin was 9.6% in FY 16:

          -     Gross margin was 37.0% in FY 16 versus 37.1% in FY 15.
                                                                                                                                                      
                                                                                                         -                                           Selling, general and administrative ("SG&A") expenses were $1.411
                                                                                                                                                     billion, or 27.7% of net revenues in FY 16, versus $1.356 billion,
                                                                                                                                                     or 27.2% of net revenues in FY 15. Excluding severance-related
                                                                                                                                                     reorganization charges of approximately $14 million, non-GAAP SG&A
                                                                                                                                                     expenses were $1.396 billion, or 27.5% of net revenues, in FY 16.
                                                                                                                                                     See Exhibit 1.
                                                                                                                                                      

The effective income tax rate in FY 16 was 35.3% versus 36.5% in FY 15, reflecting a one-time favorable tax adjustment. Excluding this adjustment, the effective tax rate in FY 16 was 36.9%. See Exhibit 1.

EPS in FY 16 was $3.41 versus $3.37 in FY 15. Excluding severance-related reorganization charges and the tax adjustment, non-GAAP EPS was $3.43 in FY 16. See Exhibit 1.

Merchandise inventories at the end of FY 16 were $978 million, down 0.1% compared to FY 15.

STOCK REPURCHASE PROGRAM AND DIVIDEND INCREASE

During FY 16, we repurchased 2.9 million shares of common stock at an average cost of $52.68 per share and a total cost of approximately $151 million. As of January 29, 2017, there was approximately $411 million remaining under our current stock repurchase program. As announced in a separate release today, our Board of Directors authorized a $0.02, or 5%, increase in our quarterly cash dividend to $0.39 per share.

FISCAL YEAR 2017 FINANCIAL GUIDANCE

                                                    
                                                                       1st Quarter 2017 Financial Guidance
 
Total Net Revenues (millions)                                                                                                                       $1,085 - $1,120
Comparable Brand Revenue Growth/(Decrease)                                                                                                             (1%) - 2%
Diluted EPS                                                                                                                                          $0.45 - $0.50
                                   
------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------
                                                                                                                                                     
                                                                       Fiscal Year 2017 Financial Guidance
 
Total Net Revenues (millions)                                                                                                                       $5,165 - $5,265
Comparable Brand Revenue Growth                                                                                                                         1% - 3%
Operating Margin                                                                                                                                      9.4% - 9.6%
Diluted EPS                                                                                                                                          $3.45 - $3.65
Income Tax Rate                                                                                                                                      36.5% - 37.5%
Capital Spending (millions)                                                                                                                           $200 - $220
Depreciation and Amortization (millions)               $185 - $195
------------------------------------------ -------------------- -------------------- -------------------- -------------------- -------------------- ----------------------------
                                                                                                                                                     
                                                                                                                                                                    
                                                                                                                                                                                                                                     Store Opening and Closing Guidance by Retail Concept*
                                                                                                                                                                                                                                                                                        
                                                                                                                                             FY 2016 ACT                                                                                                                                                               FY 2017 GUID
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- --------------------                      -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
              Total                                New             Close             End
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- --------------------                      -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---
Williams Sonoma                    234                                                                                                                                 3               (6)             231
Pottery Barn                                                                                                                                         201                                                                                                                                 6                                                                                                                                 (3)                                                                                                                               204
West Elm                                                                                                                                              98                                                                                                                                10                                                                                                                                 (3)                                                                                                                               105
Pottery Barn Kids                                                                                                                                     89                                                                                                                                 -                                                                                                                                 (4)                                                                                                                                85
Rejuvenation                         7                                  2                 -               9
-------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- --------------------                      -------------------- -------------------- -------------------- --- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---
Total                              629                                 21              (16)             634
==================== ==================== ==================== ==================== ==================== ==================== ==================== ===== ==================== ====================                      ==================== ==================== ==================== === ==================== ==================== ==================== ==================== ==================== ==================== ===== ==================== ==================== ==================== ==================== ==================== ==================== ===
* Included in the FY 16 store count are 19 stores in Australia and
one store in the UK.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, March 15, 2017, 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 live webcast and can be accessed at http://ir.williams-sonomainc.com/events . A replay of the webcast will be available at http://ir.williams-sonomainc.com/events .

SEC REGULATION G -- NON-GAAP INFORMATION

This press release includes non-GAAP SG&A, operating income, operating margin, income taxes, effective tax rate and diluted EPS. These non-GAAP financial measures exclude the impact of severance-related reorganization charges in Q1 16 and Q3 16 and a one-time favorable tax adjustment in Q4 16. 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 and FY 16 actual results on a comparable basis with prior periods. 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 are proven 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 ability to continue to improve performance and increase our competitive advantage; our focus on operational excellence; our ability to improve customers’ experience; our optimism about the future; our ability to drive long-term profitable growth; our future financial guidance, including Q1 17 and FY 2017 guidance; our stock repurchase program; and our proposed store openings and closures.

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 Q4 16 and as audited year-end financial statements are prepared; continuing 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; challenges associated with our increasing global presence; 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 31, 2016 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 eight distinct merchandise strategies - Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen, Williams Sonoma Home, Rejuvenation, and Mark and Graham - are marketed through e-commerce websites, direct mail catalogs and retail stores. Williams-Sonoma, Inc. currently operates in the United States, Canada, Australia and the United Kingdom, offers international shipping to customers worldwide, and has unaffiliated franchisees that operate stores in the Middle East and the Philippines and stores and e-commerce websites in Mexico.

 
                                                                                                                                                                                                                                     Williams-Sonoma, Inc.
                                                                                                                                                                                                                                     Condensed Consolidated Statements of Earnings (unaudited)
                                                                                                                                                                                                                                     Thirteen weeks ended January 29, 2017 and January 31, 2016
                                                                                                                                                                                                                                     (Dollars and shares in thousands, except per share amounts)
                                                      
                                                                                                                                                                                                                                                                                                                                                                           4th Quarter
                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                     2016                                                                                                                                                                                                                                                                           2015
                                                                                                                                                      -------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                         ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                     $                                               % of                                                                                                                         $                                                    % of
                                                                                                                                                                                                                                                                                                                Revenues                                                                                                                                                                                                                                                                         Revenues
                                                                                                                                                      -----------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------                                                                                                           -----------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------
E-commerce net revenues                                                                                                                                                  $   808,942            51.1 %                                                                                                                                                $   791,903                 49.9 %
Retail net revenues                                                                                                                                       772,639            48.9                                                                                                                794,401                 50.1  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Net revenues                                                                                                                                                               1,581,581                                                                                                          100.0                                                                                                                                                    1,586,304                                                                                                               100.0
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Cost of goods sold                                                                                                                                        959,550            60.7                                                                                                                978,744                 61.7  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Gross profit                                                                                                                                                                 622,031                                                                                                           39.3                                                                                                                                                      607,560                                                                                                                38.3
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Selling, general and administrative expenses                                                                                                              406,212            25.7                                                                                                                384,880                 24.3  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating income                                                                                                                                                             215,819                                                                                                           13.6                                                                                                                                                      222,680                                                                                                                14.0
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Interest (income) expense, net                                                                                                                                101               -                                                                                                                      2                    -  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Earnings before income taxes                                                                                                                                                 215,718                                                                                                           13.6                                                                                                                                                      222,678                                                                                                                14.0
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Income taxes                                                                                                                                               71,091             4.5                                                                                                                 81,550                  5.1  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Net earnings                                                                                                                                                             $   144,627             9.1 %                                                                                                                                                $   141,128                  8.9 %
                                                                                                                                                      ==================== ========= ==================== ==================== ==================== ==================== ==================== ===== ====================                                                                                                          ==================== ========= ==================== ==================== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Earnings per share (EPS):
Basic                                                                                                                                                       $1.65                                                                                                                                                                                                                                                    $1.57
Diluted                                                                                                                                                     $1.63                                                                                                                                                                                                                                                    $1.55
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Shares used in calculation of EPS:
Basic                                                                                                                                                                         87,669                                                                                                                                                                                                                                                                      89,760
Diluted                                                                                                                                                                       88,633                                                                                                                                                                                                                                                                      90,988
                                                      
                                                                                                                                                                                                                                     Williams-Sonoma, Inc.
                                                                                                                                                                                                                                     Condensed Consolidated Statements of Earnings (unaudited)
                                                                                                                                                                                                                                     Fifty-two weeks ended January 29, 2017 and January 31, 2016
                                                                                                                                                                                                                                     (Dollars and shares in thousands, except per share amounts)
                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                           Fiscal Year
                                                                                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                     2016                                                                                                                                                                                                                                                                           2015
                                                                                                                                                      -------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                                         ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                     $                                               % of                                                                                                                         $                                                    % of
                                                                                                                                                                                                                                                                                                                Revenues                                                                                                                                                                                                                                                                         Revenues
                                                                                                                                                      -----------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- -------------------------                                                                                                           -----------------------------  -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------
E-commerce net revenues                                                                                                                                                  $ 2,633,602            51.8 %                                                                                                                                                $ 2,522,580                 50.7 %
Retail net revenues                                                                                                                                     2,450,210            48.2                                                                                                              2,453,510                 49.3  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Net revenues                                                                                                                                                               5,083,812                                                                                                          100.0                                                                                                                                                    4,976,090                                                                                                               100.0
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Cost of goods sold                                                                                                                                      3,200,502            63.0                                                                                                              3,131,876                 62.9  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Gross profit                                                                                                                                                               1,883,310                                                                                                           37.0                                                                                                                                                    1,844,214                                                                                                                37.1
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Selling, general and administrative expenses                                                                                                            1,410,711            27.7                                                                                                              1,355,580                 27.2  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Operating income                                                                                                                                                             472,599                                                                                                            9.3                                                                                                                                                      488,634                                                                                                                 9.8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Interest (income) expense, net                                                                                                                                688               -                                                                                                                    627                    -  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Earnings before income taxes                                                                                                                                                 471,911                                                                                                            9.3                                                                                                                                                      488,007                                                                                                                 9.8
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Income taxes                                                                                                                                              166,524             3.3                                                                                                                177,939                  3.6  
                                                                                                                                                      -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ----- --------------------                                                                                                          -------------------- --------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------- --------------------
Net earnings                                                                                                                                                             $   305,387             6.0 %                                                                                                                                                $   310,068                  6.2 %
                                                                                                                                                      ==================== ========= ==================== ==================== ==================== ==================== ==================== ===== ====================                                                                                                          ==================== ========= ==================== ==================== ==================== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Earnings per share (EPS):
Basic                                                                                                                                                       $3.45                                                                                                                                                                                                                                                    $3.42
Diluted                                                                                                                                                     $3.41                                                                                                                                                                                                                                                    $3.37
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
Shares used in calculation of EPS:
Basic                                                                                                                                                                         88,594                                                                                                                                                                                                                                                                      90,787
Diluted                                                                                                                                                                       89,462                                                                                                                                                                                                                                                                      92,102
                                                                                                                                 
                                                                                                                                                                                Williams-Sonoma, Inc.
                                                                                                                                                                  Condensed Consolidated Balance Sheets (unaudited)
                                                                                                                                                             (Dollars and shares in thousands, except per share amounts)
                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                   ----------------------------------------------------                                                                                                         ----------------------------------------------------
                                                                                                                                                                                                         Jan. 29, 2017                                                                                                                                                Jan. 31, 2016
                                                                                                                                                                   ----------------------------------------------------                                                                                                         ----------------------------------------------------
Assets
Current assets
   Cash and cash equivalents                                                                                                                                                          $   213,713                                                                                                                                                  $   193,647
   Accounts receivable, net                                                                                                                                                                88,803                                                                                                                                                       79,304
   Merchandise inventories, net                                                                                                                                                           977,505                                                                                                                                                      978,138
   Prepaid catalog expenses                                                                                                                                                                23,625                                                                                                                                                       28,919
   Prepaid expenses                                                                                                                                                                        52,882                                                                                                                                                       44,654
   Other assets                                                                                                                                                         10,652                                                                                                                 11,438  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
Total current assets                                                                                                                                                 1,367,180                                                                                                              1,336,100  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                 
Property and equipment, net                                                                                                                                                               923,283                                                                                                                                                      886,813
Deferred income taxes, net                                                                                                                                                                135,238                                                                                                                                                      141,784
Other assets, net                                                                                                                                                       51,178                                                                                                                 52,730  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
Total assets                                                                                                                                                                          $ 2,476,879                                                                                                                               $ 2,417,427  
                                                                                                                                                                   ==================== ========= ====================                                                                                                          ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                 
Liabilities and stockholders’ equity
Current liabilities
   Accounts payable                                                                                                                                                                   $   453,710                                                                                                                                                  $   447,412
   Accrued salaries, benefits and other                                                                                                                                                   130,187                                                                                                                                                      127,122
   Customer deposits                                                                                                                                                                      294,276                                                                                                                                                      296,827
   Income taxes payable                                                                                                                                                                    23,245                                                                                                                                                       67,052
   Other liabilities                                                                                                                                                    59,838                                                                                                                 58,014  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
Total current liabilities                                                                                                                                              961,256                                                                                                                996,427  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                 
Deferred rent and lease incentives                                                                                                                                                        196,188                                                                                                                                                      173,061
Other long-term obligations                                                                                                                                             71,215                                                                                                                 49,713  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
Total liabilities                                                                                                                                                    1,228,659                                                                                                              1,219,201  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                                 
Stockholders’ equity
Preferred stock: $.01 par value; 7,500 shares authorized;                                                                                                                                       -                                                                                                                                                            -
  none
issued
Common stock: $.01 par value; 253,125 shares authorized;                                                                                                                                      873                                                                                                                                                          896
  87,325
and 89,563 shares issued and outstanding
  at January 29,
2017 and January 31, 2016, respectively
Additional paid-in capital                                                                                                                                                                556,928                                                                                                                                                      541,307
Retained earnings                                                                                                                                                                         701,702                                                                                                                                                      668,545
Accumulated other comprehensive loss                                                                                                                                                       (9,903 )                                                                                                                                                    (10,616 )
Treasury stock, at cost                                                                                                                                                 (1,380 )                                                                                                                                  (1,906 )
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
Total stockholders’ equity                                                                                                                1,248,220                                                                                                              1,198,226  
                                                                                                                                                                   -------------------- --------- --------------------                                                                                                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                   ----------------------------------------------------                                                                                                         ----------------------------------------------------
Total liabilities and stockholders’ equity                                                                                                                                            $ 2,476,879                                                                                                                               $ 2,417,427  
                                                                                                                                                                   ==================== ========= ====================                                                                                                          ==================== ========= ====================
 
                                                                                                                                                                              Williams-Sonoma, Inc.
                                                                                                                                                           Condensed Consolidated Statements of Cash Flows (unaudited)
                                                                                                                                                           Fifty-two weeks ended January 29, 2017 and January 31, 2016
                                                                                                                                                                             (Dollars in thousands)
 
                                                                                                                                                                   Year-to-Date
                                                                                                                                                                                                            
                                                                                                                                                                 ---------------------------------------------------                                                                                                         ---------------------------------------------------
                                                                                                                                                                                        2016                                                                                                                                                        2015
                                                                                                                                                                 ---------------------------------------------------                                                                                                         ---------------------------------------------------
Cash flows from operating activities
Net earnings                                                                                                                                                                        $  305,387                                                                                                                                                  $  310,068
                                                                                                                                                                                                                                                                                                                              
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization                                                                                                                                                          173,195                                                                                                                                                     167,760
Loss on disposal/impairment of assets                                                                                                                                                    3,806                                                                                                                                                       4,339
Amortization of deferred lease incentives                                                                                                                                              (25,212 )                                                                                                                                                   (24,721 )
Deferred income taxes                                                                                                                                                                    7,114                                                                                                                                                      (7,436 )
Tax benefit related to stock-based awards                                                                                                                                                3,230                                                                                                                                                      14,592
Excess tax benefit related to stock-based awards                                                                                                                                        (4,894 )                                                                                                                                                   (14,494 )
Stock-based compensation expense                                                                                                                                                        51,116                                                                                                                                                      41,357
Other                                                                                                                                                                                     (423 )                                                                                                                                                       149
                                                                                                                                                                                                                                                                                                                              
Changes in:
   Accounts receivable                                                                                                                                                                  (9,794 )                                                                                                                                                   (12,849 )
   Merchandise inventories                                                                                                                                                               4,493                                                                                                                                                     (92,647 )
   Prepaid catalog expenses                                                                                                                                                              5,294                                                                                                                                                       5,022
   Prepaid expenses and other assets                                                                                                                                                    (6,367 )                                                                                                                                                    (9,245 )
   Accounts payable                                                                                                                                                                      3,169                                                                                                                                                      60,507
   Accrued salaries, benefits and other liabilities                                                                                                                                     25,876                                                                                                                                                        (135 )
   Customer deposits                                                                                                                                                                    (3,037 )                                                                                                                                                    35,877
   Deferred rent and lease incentives                                                                                                                                                   35,559                                                                                                                                                      31,334
   Income taxes payable                                                                                                                                             (43,803 )                                                                                                                                 34,548  
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
Net cash provided by operating activities                                                                                                                           524,709                                                                                                               544,026  
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                              
Cash flows from investing activities:
Purchases of property and equipment                                                                                                                                                   (197,414 )                                                                                                                                                  (202,935 )
Other                                                                                                                                                                   439                                                                                                                   769  
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
Net cash used in investing activities                                                                                                                              (196,975 )                                                                                                                               (202,166 )
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                              
Cash flows from financing activities:
Repurchase of common stock                                                                                                                                                            (151,272 )                                                                                                                                                  (224,995 )
Payment of dividends                                                                                                                                                                  (133,539 )                                                                                                                                                  (127,636 )
Borrowings under revolving line of credit                                                                                                                                              125,000                                                                                                                                                     200,000
Repayments of borrowings under revolving line of credit                                                                                                                               (125,000 )                                                                                                                                                  (200,000 )
Tax withholdings related to stock-based awards                                                                                                                                         (27,062 )                                                                                                                                                   (31,790 )
Excess tax benefit related to stock-based awards                                                                                                                                         4,894                                                                                                                                                      14,494
Proceeds related to stock-based awards                                                                                                                                                   1,532                                                                                                                                                       2,647
Repayment of long-term obligations                                                                                                                                                           -                                                                                                                                                      (1,968 )
Other                                                                                                                                                                  (359 )                                                                                                                                   (135 )
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
Net cash used in financing activities                                                                                                                              (305,806 )                                                                                                                               (369,383 )
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
                                                                                                                                                                                                                                                                                                                              
Effect of exchange rates on cash and cash equivalents                                                                                                                                   (1,862 )                                                                                                                                                    (1,757 )
Net increase (decrease) in cash and cash equivalents                                                                                                                                    20,066                                                                                                                                                     (29,280 )
Cash and cash equivalents at beginning of period                                                                                                                    193,647                                                                                                               222,927  
                                                                                                                                                                 -------------------- -------- --------------------                                                                                                          -------------------- -------- --------------------
Cash and cash equivalents at end of period                                                                                                                                          $  213,713                                                                                                                               $  193,647  
                                                                                                                                                                 ==================== ======== ====================                                                                                                          ==================== ======== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                     Exhibit 1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                     Reconciliation of 4th Quarter and
                                                                                                                                                                                                                                     Fiscal Year Actual GAAP to Non-GAAP Operating Margin By Segment*
                                                                                                                                                                                                                                     ($ in thousands)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                      E-commerce                                                                                                                                                                                    Retail                                                                                                                                                                Unallocated                                                                                                                                                                                   Total
-------------------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------                                                  ------------------------------------------------------------------------------------------------------------------------------------------                                                  ----------------------------------------------------------------------------------------------------------------------------------------                                                  ------------------------------------------------------------------------------------------------------------------------------------------
                                                                Q4 16                                                   Q4 15                                                                                         Q4 16                                                   Q4 15                                                                     Q4 16                                                  Q4 15                                                                                         Q4 16                                                   Q4 15
-------------------------------- -------------------- -------------------- -------------------------------------------------   -------------------- -------------------- -------------------------------------------------                                             -------------------------------------------------   -------------------- -------------------- -------------------------------------------------                                             ------------------------------------------------   -------------------- -------------------- ------------------------------------------------                                             -------------------------------------------------   -------------------- -------------------- -------------------------------------------------
Net Revenues                                                                                  $   808,942                                             $   791,903                                                                                   $   772,639                                             $   794,401                                                                $        -                                             $        -                                                                                   $ 1,581,581                                             $ 1,586,304
Operating Income/(Expense)               191,845           174,218                                                 121,507           121,446                             (97,533 )                           (72,984 )                                                                  215,819           222,680  
-------------------------------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
Operating Margin                            23.7 %                               22.0 %                                                                     15.7 %                               15.3 %                                                 (6.2 %)                             (4.6 %)                                                                    13.6 %                               14.0 %
================================ ==================== ==================== ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                      ==================== ==================== ======== ==================== ==================== ==================== ==================== ======== ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                      E-commerce                                                                                                                                                                                    Retail                                                                                                                                                                Unallocated                                                                                                                                                                                   Total
-------------------------------- -------------------- -------------------- --------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------                     -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------------------------------------------------------------------------------------------------------
                                                                FY 16                                                   FY 15                                                                                         FY 16                                                   FY 15                                                                     FY 16                                                  FY 15                                                                                         FY 16                                                   FY 15
-------------------------------- -------------------- -------------------- ------------------------------------------------------------------------ -------------------- ----------------------------------------------------                                          ------------------------------------------------------------------------ -------------------- ----------------------------------------------------                     -------------------- ----------------------------------------------------------------------- -------------------- ---------------------------------------------------                                          ------------------------------------------------------------------------ -------------------- ----------------------------------------------------
Net Revenues                                                                                  $ 2,633,602                                                                                   $ 2,522,580                                                                                   $ 2,450,210                                                                                   $ 2,453,510                                                                                   $        -                                                                                   $        -                                                                                   $ 5,083,812                                                                                   $ 4,976,090
GAAP Operating Income/(Expense)          606,286           562,081                                                 231,929           239,288                            (365,616 )                          (312,735 )                                                                  472,599           488,634  
-------------------------------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
GAAP Operating Margin                       23.0 %                               22.3 %                                                                      9.5 %                                9.8 %                                                 (7.2 %)                             (6.3 %)                                                                     9.3 %                                9.8 %
================================ ==================== ==================== ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                      ==================== ==================== ======== ==================== ==================== ==================== ==================== ======== ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================
Severance-related Reorganization               -                 -                                                       -                 -                              14,406                -                                                  14,406                 -  
Charges(1)
-------------------------------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
Non-GAAP Operating Income/                              $   606,286                          $   562,081                                                                $   231,929                          $   239,288                                             $ (351,210 )                                           $ (312,735 )                                                                                 $   487,005                          $   488,634  
(Expense) Excluding Severance-
related
Reorganization Charges(3)
-------------------------------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- -------------------- -------- -------------------- -------------------- -------------------- -------------------- -------- --------------------                                           -------------------- --------- -------------------- -------------------- -------------------- -------------------- --------- --------------------
Non-GAAP Operating Margin(3)                23.0 %                               22.3 %                                                                      9.5 %                                9.8 %                                                 (6.9 %)                             (6.3 %)                                                                     9.6 %                                9.8 %
================================ ==================== ==================== ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================                      ==================== ==================== ======== ==================== ==================== ==================== ==================== ======== ====================                                           ==================== ========= ==================== ==================== ==================== ==================== ========= ====================
*  See the Company’s 10-K and 10-Q filings for additional
information on segment reporting and the definition of Operating
Income/(Expense) and Operating Margin.
                                                                                                                                                                                                             
                                                                                                                                                                                                                                     Reconciliation of 4th Quarter and
                                                                                                                                                                                                                                Fiscal Year Actual GAAP to Non-GAAP Effective Tax Rate
                                                                                                                                                                                                                                     ($ in thousands)
                                                                                                                                                                         
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------ -------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Q4 16                                                 Q4 15                                                 FY 16                                                                      FY 15
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- -------------------- ---------------------------------------------------------------------- -------------------- -----------------------------------------------------------------------
Earnings Before Income Taxes                                                                                                                                                  $ 215,718                                             $ 222,678                                                                                   $ 471,911                                             $   488,007
GAAP Income Taxes                                              71,091          81,550         166,524           177,939  
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
GAAP Effective Tax Rate                                          33.0 %                             36.6 %                             35.3 %                               36.5 %
================================================= ==================== ==================== ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                
One-time Favorable Tax Adjustment(2)                            7,681               -           7,681                 -  
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Non-GAAP Income Taxes Excluding Tax Adjustment(3)                              $  78,772                          $  81,550                          $ 174,205                          $   177,939  
------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- -------------------- -------------------- ------- --------------------
Non-GAAP Effective Tax Rate(3)                                   36.5 %                             36.6 %                             36.9 %                               36.5 %
================================================= ==================== ==================== ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ======= ==================== ==================== ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                 
                                                                                                                                                                                                                                     Reconciliation of Quarterly and Fiscal Year GAAP to Non-GAAP
                                                                                                                                                                                                                                     Diluted Earnings Per Share**
                                                                                                                                                                                                                                     (Totals rounded to the nearest cent per diluted share)
                                                                                    
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                   Q1 16                        Q2 16                        Q3 16                        Q4 16                        FY 16
                                                                                                                                                   ACT                                                                                                      ACT                                                                                                      ACT                                                                                                      ACT                                                                                                      ACT
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
2016 GAAP Diluted EPS                                                        $0.44                        $0.58                        $0.78                        $1.63                        $3.41
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Impact of Severance-related Reorganization Charges(1)                        $0.09                            -                        $0.01                            -                        $0.10
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
One-time Favorable Tax Adjustment(2)                                             -                            -                            -                      ($0.08)                      ($0.08)
===================================================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ====================
2016 Non-GAAP Diluted EPS Excluding Severance-                               $0.53                        $0.58                        $0.79                        $1.55                        $3.43
related
Reorganization Charges and Tax
Adjustment(3)
===================================================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
                                                                                    
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                   Q1 15                        Q2 15                        Q3 15                        Q4 15                        FY 15
                                                                                                                                                   ACT                                                                                                      ACT                                                                                                      ACT                                                                                                      ACT                                                                                                      ACT
----------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
2015 GAAP Diluted EPS                                                        $0.48                        $0.58                        $0.77                        $1.55                        $3.37
===================================================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ====================

** Due to the differences between the quarterly and year-to-date weighted average share count calculations and rounding to the nearest cent per diluted share, totals may not equal the sum of the line items and fiscal year diluted EPS may not equal the sum of the quarters.

Notes:
(1)   Impact of Severance-related Reorganization Charges - During Q1 16
                         and Q3 16, we incurred severance-related reorganization charges
                         due to headcount reduction primarily in our corporate functions
                         totaling approximately $14 million, or $0.10 per diluted share.
                         These charges were recorded as SG&A expense within the unallocated
                         segment.
(2)                      Impact of One-time Favorable Tax Adjustment - During Q4 16 we
                         incurred a benefit of approximately $8M, or $0.08 per diluted
                         share, related to tax adjustments associated with intercompany
                         transactions.
(3)                      SEC Regulation G - Non-GAAP Information - These tables include
                         non-GAAP operating income, operating margin, income taxes,
                         effective tax rate and diluted EPS. 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 and FY 16 actual results
                         on a comparable basis with prior periods. 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 financial measures should
                         be considered as a supplement to, and not as a substitute for, or
                         superior to, financial measures calculated in accordance with GAAP.
                                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                     Store Statistics
                                                                                                                                                                 Store Count                                                                                                                                                                                                                                                                           Avg. Leased Square Footage
                                                                                                                                                                                                                                                                                                                                                        Per Store
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                   ----------------------------------------------------------------------------------------------------------
          Oct. 30, 2016     Openings     Closings     Jan. 29, 2017     Jan. 31, 2016                                                                Jan. 29, 2017         Jan. 31, 2016
-------------------- -------------------- -------------------- -------------------- -------------------- ------------- -------------------- -------------------- -------  -------------------- -------------------- -------  -------------------- -------------------- ------------- -------------------- -------------------- -------------                                                                ------------- -------------------- -------------------- -------------------- -------------------- -------------
Williams Sonoma                        241            2          (9)               234               239                                                                        6,600                 6,600
Pottery Barn                                                                                                       202                                                  1                                                (2)                                                     201                                                     197                                                                       13,900                                                                                            13,800
Pottery Barn Kids                                                                                                   89                                                  1                                                (1)                                                      89                                                      89                                                                        7,400                                                                                             7,500
West Elm                                                                                                            97                                                  1                                                  -                                                      98                                                      87                                                                       13,300                                                                                            13,200
Rejuvenation                             6            1            -                 7                 6                                                                        9,100                 9,000
-------------------- -------------------- -------------------- -------------------- -------------------- ------------- -------------------- -------------------- ----------------------------- -------------------- ----------------------------- -------------------- ------------- -------------------- -------------------- -------------                                                                ------------- -------------------- -------------------- -------------------- -------------------- -------------
Total                                  635            6         (12)               629               618                                                                       10,100                10,000
==================== ==================== ==================== ==================== ==================== ============= ==================== ==================== ============================= ==================== ============================= ==================== ============= ==================== ==================== =============                                                                ============= ==================== ==================== ==================== ==================== =============
                                                                                                      
                                                                                                                                                                                                           --------------------                                                                                                                                                                         --------------------                                                                                                                                                                         --------------------
                                                                                                                                                                                                                  Oct. 30, 2016                                                                                                                                                                                Jan. 29, 2017                                                                                                                                                                                Jan. 31, 2016
                                                                                                                                                                                                           --------------------                                                                                                                                                                         --------------------                                                                                                                                                                         --------------------
Total store selling square footage                                                                                                                                                                                    3,966,000                                                                                                                                                                                    3,951,000                                                                                                                                                                                    3,827,000
Total store leased square footage                                                                                                                                                                                     6,381,000                                                                                                                                                                                    6,359,000                                                                                                                                                                                    6,163,000

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170315006414r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170315006414/en/

SOURCE: Williams-Sonoma, Inc.

WILLIAMS-SONOMA, INC. 
Julie P. Whalen 
EVP, Chief Financial Officer 
(415) 616-8524 
-or- 
Beth Potillo-Miller 
SVP, Finance & Corporate Treasurer 
Investor Relations 
(415) 616-8643


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