Williams-Sonoma (WSM) 10-K risk factor changes: FY2021 vs FY2020

[removed: Risk] [added: Risk] Factor [removed: Summary][added: Summary]

[removed: Risks] [added: Risks] Related to Our [removed: Business][added: Business]

[removed: | | • | | Our] [added: - *Our] business has been and may continue to be materially impacted by the COVID-19 pandemic, and the duration and extent to which this will impact our future financial performance remains [removed: uncertain. |][added: uncertain.*]

[removed: | | • | | We] [added: *•We] are unable to control many of the factors affecting consumer spending, and declines in consumer spending on home furnishings and kitchen products in general could reduce demand for our [removed: products. |][added: products.*]

[removed: | | • | | If] [added: *•If] we are unable to identify and analyze factors affecting our business, anticipate changing consumer preferences and buying trends, and manage our inventory commensurate with customer demand, our sales levels and operating results may [removed: decline. |][added: decline.*]

[removed: | | • | | Our] [added: *•Our] business and operating results may be harmed if we are unable to timely and effectively deliver merchandise to our stores and [removed: customers. |][added: customers.*]

[removed: | | • | | Our] [added: *•Our] failure to successfully manage our order-taking and fulfillment operations could have a negative impact on our business and operating [removed: results . |][added: results*.]

[removed: | | • | | We] [added: - *We] must protect and maintain our brand image and [removed: reputation. |][added: reputation.*]

[removed: | | • | | Our] [added: *•Our] sales may be negatively impacted by increasing competition from companies with brands or products similar to [removed: ours. |][added: ours.*]

[removed: | | • | | Our] [added: *•Our] facilities and systems, as well as those of our vendors, are vulnerable to natural disasters, adverse weather conditions, technology issues and other unexpected events, any of which could result in an interruption in our business and harm our operating [removed: results. |][added: results.*]

[removed: | | • | | If] [added: *•If] we are unable to effectively manage our e-commerce business and digital marketing efforts, our reputation and operating results may be [removed: harmed. |][added: harmed.*]

[removed: | | • | | Declines] [added: *•Declines] in our comparable brand revenues may harm our operating results and cause a decline in the market price of our common [removed: stock. |][added: stock.*]

[removed: | | • | | Our] [added: *•Our] failure to successfully [removed: anticipate merchandise returns] [added: manage the costs and performance of our catalog mailings] might have a negative impact on our [removed: business. |][added: business.*]

[removed: | | • | | Our] [added: *Our] failure to successfully manage the costs and performance of our catalog mailings might have a negative impact on our [removed: business. |][added: business.*]

[removed: | | • | | If] [added: *•If] we are unable to successfully manage the complexities associated with an omni-channel and multi-brand business, we may suffer declines in our existing business and our ability to attract new [removed: business. |][added: business.*]

[removed: | | • | | A] [added: *•A] number of factors that affect our ability to successfully open new stores or close existing stores are beyond our [removed: control, and these factors may harm our ability to expand or contract our retail operations and harm our ability to increase our sales and profits. |][added: control.*]

[removed: | | • | | Our] [added: *•Our] inability or failure to protect our intellectual property would have a negative impact on our brands, reputation and operating [removed: results. |][added: results.*]

[removed: | | • | | We] [added: *•We] outsource certain aspects of our business to third-party vendors and are in the process of insourcing certain business functions from third-party [removed: vendors, both of which subject us to risks. |][added: vendors.*]

[removed: | | • | | If] [added: *•If] we fail to attract and retain key personnel, our business and operating results may be [removed: harmed. |][added: harmed.*]

[removed: | | • | | If] [added: *•If] we are unable to introduce new brands and brand extensions successfully, or to reposition or close existing brands, our business and operating results may be negatively [removed: impacted. |][added: impacted.*]

[removed: | | • | | We] [added: *•We] may be subject to legal proceedings that could result in costly litigation, require significant amounts of management time and result in the diversion of significant operational [removed: resources. |][added: resources.*]

[removed: Risks] [added: Risks] Related to [removed: Technology][added: Technology]

[removed: | | • | | We] [added: - *We] may be exposed to cybersecurity risks and costs associated with credit card fraud, identity theft and business interruption that could cause us to incur unexpected expenses and loss of [removed: revenue. |][added: revenue.*]

[removed: | | • | | We] [added: *•We] receive, process, store, use and share data, some of which contains personal information, which subjects us to complex and evolving governmental regulation and other legal [removed: obligations related to data privacy, data protection and other matters. |][added: obligations.*]

[removed: | | • | | We] [added: *•We] are undertaking certain systems changes that might disrupt our business [removed: operations. |][added: operations.*]

[removed: Risks] [added: Risks] Related to Our Vendors and Our Global [removed: Operations][added: Operations]

[removed: | | • | | Our] [added: *•Our] dependence on foreign vendors and our increased global operations subject us to a variety of risks and uncertainties that could impact our operations and financial [removed: results. |][added: results.*]

[removed: | | • | | We] [added: *•We] depend on foreign vendors and third-party agents for timely and effective sourcing of our merchandise, and we may not be able to acquire products in sufficient quantities and at acceptable prices to meet our [removed: needs. |][added: needs.*]

[removed: | | • | | If] [added: *•If] our vendors fail to adhere to our quality control standards and test protocols, we may delay a product launch or recall a product, which could damage our reputation and negatively affect our operations and financial [removed: results. |][added: results.*]

[removed: | | • | | Our] [added: *•Our] efforts to expand globally may not be successful and could negatively impact the value of our [removed: brands. |][added: brands.*]

[removed: | | • | | We] [added: *•We do not] have [removed: limited] [added: extensive] experience operating on a global basis and our failure to effectively manage the risks and challenges inherent in a global business could adversely affect our business, operating results and financial condition and growth [removed: prospects. |][added: prospects.*]

[removed: Risks] [added: Risks] Related to Taxes and [removed: Tariffs][added: Tariffs]

[removed: | | • | | Any] [added: - *Any] significant changes in tax, trade or other policies in the U.S. or other countries, including policies that restrict imports or increase import tariffs, could have a material adverse effect on our results of [removed: operations. |][added: operations.*]

[removed: | | • | | Tariffs] [added: countries,] could [removed: result in increased prices and/or costs of goods or] [added: adversely affect customer sales, cause potential] delays in product received from our [removed: vendors] [added: vendors,] and [removed: could adversely affect] [added: negatively impact] our [added: cost of goods sold and] results of operations. [removed: |]

[removed: | | • | | Fluctuations] [added: *•Fluctuations] in our tax obligations and effective tax rate may result in volatility of our operating [removed: results. |][added: results.*]

[removed: Risks] [added: Risks] Related to Our Financial Statements and [removed: Liquidity][added: Liquidity]

[removed: | | • | | We] [added: *•We] may require funding from external sources, which may not be available at the levels we [removed: require,] [added: require] or may cost more than we [removed: expect. |][added: expect.*]

[removed: | | • | | Our] [added: *•Our] operating results may be harmed by unsuccessful management of our employment, occupancy and other operating costs, and the operation and growth of our business may be harmed if we are unable to attract qualified [removed: personnel. |][added: personnel.*]

[removed: | | • | | Our] [added: *•Our] inability to obtain commercial insurance at acceptable rates or our failure to adequately reserve for self-insured exposures might increase our expenses and have a negative impact on our [removed: business. |][added: business.*]

[removed: | | • | | If] [added: *•If] our operating and financial performance in any given period does not meet the guidance that we have provided to the public or the expectations of our investors and analysts, our stock price may [removed: decline. |][added: decline.*]

*•Our aspirations, goals and disclosures related to ESG matters expose us to numerous risks, including risks to our reputation and stock price.*

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General Risk Factors

Risks Related to our Business

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As of January 30, 2022, all of our stores have reopened for in-person shopping.

However, we have experienced, and may continue to experience, delays in inventory receipts, increased raw material costs and higher shipping-related charges as a result of port slowdowns and congestion, as well as shipping container shortages, due in part to the impact from COVID-19.

We have also experienced, and may continue to experience, reduced traffic in our stores due to the continued uncertainty around COVID-19 and the high rates of infection in certain areas.

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*Our aspirations, goals and disclosures related to ESG matters expose us to numerous risks, including risks to our reputation and stock price.*

There has been increased focus from our stakeholders, including consumers, employees and investors, on our ESG practices.

We have established and announced goals and other objectives related to ESG matters.

These goal statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.

Our efforts to accomplish and accurately report on these goals and objectives present numerous operational, reputational, financial, legal and other risks, any of which could have a material negative impact, including on our reputation, stock price, and results of operation.

We could also incur additional costs and require additional resources to implement various ESG practices to make progress against our public goals and to monitor and track our performance with respect to such goals.

The standards for tracking and reporting on ESG matters are relatively new, have not been formalized and continue to evolve.

Collecting, measuring, and reporting ESG information and metrics can be difficult and time consuming.

Our selected disclosure framework or standards may need to be changed from time to time, which may result in a lack of consistent or meaningful comparative data from period to period.

In addition, our interpretation of reporting frameworks or standards may differ from those of others and such frameworks or standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.

Our ability to achieve any ESG-related goal or objective is subject to numerous risks, many of which are outside of our control, including: (1) the availability and cost of low- or non-carbon-based energy sources and technologies, (2) evolving regulatory requirements affecting ESG standards or disclosures, (3) the availability of vendors and suppliers that can meet our sustainability, diversity and other standards, and (4) the availability of raw materials that meet and further our sustainability goals.

If our ESG practices do not meet evolving consumer, employee, investor or other stakeholder expectations and standards or our publicly-stated goals, then our reputation, our ability to attract or retain employees and our competitiveness, including as an investment and business partner, could be negatively impacted.

Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current customers and investors may elect to do business with our competitors instead, and our ability to attract or retain employees could be negatively impacted.

Our failure, or perceived failure, to pursue or fulfill our goals, targets and

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objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also expose us to government enforcement actions and private litigation.

Our dependence on a single broker and/or further

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- the availability and cost of building materials needed for store remodels;

We may experience delays in opening new store locations or remodeling existing locations due to the uncertain availability and increased costs of building materials necessary to remodel and improve our stores.

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Any new brands, brand extensions or expansion into new lines of business may not grow as expected.

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Risks Related to Technology

Other states, including Colorado and Virginia, passed similar laws that will take effect in 2023.

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As we continue to utilize our core financial reporting and human capital management systems, we may need to add or improve processes and features, which could disrupt service to our operations or cause errors in data.

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our foreign vendors that could harm our image.

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| --- | --- |

| --- | --- | --- | --- |

| | • | | Declines in general economic conditions, and the resulting impact on consumer confidence and consumer spending, could adversely impact our results of operations. |

Our business has been and may continue to be materially impacted by the

COVID-19

non-essential

retailers and other businesses, and orders to

“shelter-in-place”.

On March 11, 2020, the World Health Organization declared

to be a global pandemic and recommended containment and mitigation measures worldwide.

pandemic.

The preventative or protective actions that governments and businesses around the world have taken to contain the spread of

have resulted in a period of disruption that has and may continue to negatively impact our retail store revenues which comprised approximately 30% of our net revenues in fiscal 2020.

As of January 31, 2021, the majority of our retail stores had reopened for

in-person

shopping.

However, given the continued uncertainty around

due to high rates of infections in certain areas, state and local officials in certain geographies have extended closures or restrictions on retail capacity, which may continue to impact our store traffic and retail revenues, and may result in future store impairments.

Additionally, federal, state and local governments may impose new restrictions on retail operations, which could affect our ability to operate our retail stores until such restrictions are lifted.

Such reduced traffic and store closures have and may continue to result in material reductions in our retail store revenues and operating income as well as store asset impairment charges and write-offs, which have and may continue to negatively affect our operating results.

Further, while we have implemented strict safety protocols based on Center for Disease Control and Prevention and government recommendations in stores that we have

re-opened,

there is no guarantee that such protocols will be effective, and any virus-related illnesses linked or alleged to be linked to our stores, whether accurate or not, may negatively affect our reputation, operating results and/or financial condition.

Although to date, the impact of our store closures on our retail store revenues has been more than offset by growth in our

e-commerce

pandemic worsens due to new variants, either of which could result in decreased consumer spending in the markets in which we operate.

orders and could complicate or prevent our ability to supply merchandise to our stores.

These higher costs affected us in the third quarter of 2020 and even more so in the fourth quarter of 2020 as a result of peak surcharges during the holiday season and could continue to affect us thereafter.

Further,

The

The ultimate impact of the

Declines in general economic conditions, and the resulting impact on consumer confidence and consumer spending, could adversely impact our results of operations.

Our financial performance is subject to declines in general economic conditions and the impact of such economic conditions on levels of consumer confidence and consumer spending.

Consumer confidence and consumer spending may deteriorate significantly, and could remain depressed for an extended period of time.

Consumer purchases of discretionary items, including our merchandise, generally decline during periods when disposable income is limited, unemployment rates increase or there is economic uncertainty.

pandemic), adverse weather, availability of consumer credit, consumer debt levels, conditions in the housing market, interest rates, sales tax rates and rate increases, inflation, consumer confidence in future economic and political conditions, and consumer perceptions of personal well-being and security.

Alternatively, we may be

There is also increased focus, including by governmental and

non-governmental

organizations, investors, customers, consumers and other stakeholders, on corporate social responsibility and sustainability matters.

The following discussion and analysis of our financial condition, results of operations, and liquidity and capital resources for the 52 weeks ended January [removed: 31, 2021] [added: 30, 2022] (“fiscal [removed: 2020”),] [added: 2021”),] and the 52 weeks ended [removed: February 2, 2020] [added: January 31, 2021] (“fiscal [removed: 2019”)] [added: 2020”)] should be read in conjunction with our Consolidated Financial Statements and notes thereto.

A discussion and analysis of our financial condition, results of operations, and liquidity and capital resources for the 52 weeks ended [removed: February 2, 2020] [added: January 31, 2021] (“fiscal [removed: 2019”),] [added: 2020”),] compared to the [removed: 53] [added: 52] weeks ended February [removed: 3, 2019] [added: 2, 2020] (“fiscal [removed: 2018”),] [added: 2019”),] can be found under Item 7 in our Annual Report on Form [added: 10-K for fiscal 2020, filed with the SEC on March 30, 2021, which is available on the SEC’s website at www.sec.gov and under the Financial Reports section of our Investor Relations website.]

[removed: OVERVIEW][added: OVERVIEW]

Our products, representing distinct merchandise strategies — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, and Mark and Graham — are marketed through [added: e-commerce websites, direct-mail catalogs and retail stores.]

[added: These brands are also part of The Key Rewards, our free-to-join] loyalty program that offers members exclusive benefits across the Williams-Sonoma family of brands.

We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, offer international shipping to customers worldwide, and have unaffiliated franchisees that operate stores in the Middle East, the Philippines, Mexico, South Korea and India, as well as [added: e-commerce websites in certain locations.]

We are also proud to [removed: lead the] [added: be a leader in our] industry with our [removed: ESG] [added: Environmental, Social and Governance (“ESG”)] efforts.

In March 2020, we announced the temporary closures of all of our retail store operations to protect our employees, customers and the communities in which we operate and to help contain the [added: COVID-19 pandemic.]

As of January [removed: 31, 2021, the majority] [added: 30, 2022, all] of our [removed: retail] stores have reopened for [added: in-person shopping.]

[removed: Fiscal 2020] [added: *Fiscal 2021] Financial [removed: Results][added: Results*]

Net revenues in fiscal [removed: 2020] [added: 2021] increased by [removed: $885,181,000,] [added: $1,462,747,000,] or [removed: 15.0%,] [added: 21.6%,] compared to fiscal [removed: 2019,] [added: 2020] with comparable brand revenue growth of [removed: 17.0%] [added: 22.0%] and double-digit comparable brand revenue growth across all our brands.

During fiscal [removed: 2020,] [added: 2021,] we delivered double-digit comparable brand revenue growth across all our brands.

[removed: And,] [added: Finally,] our emerging [removed: brands,] [added: brands] Rejuvenation and Mark and Graham, [removed: combined delivered another year of double-digit] [added: combined, accelerated to 33.0%] comparable brand revenue growth.

In addition to our strong cash balance, we also ended the year with no [removed: amount] outstanding [added: borrowings] under our [added: revolving] line of credit.

This strong liquidity position allowed us to fund the operations of the [removed: business,] [added: business by investing over $226,517,000 in capital expenditures during fiscal 2021,] and to provide shareholder returns of approximately [removed: $307,645,000] [added: $1,086,972,000 in fiscal 2021] through [removed: dividends and] share [removed: repurchases.][added: repurchases and dividends.]

In fiscal [removed: 2020,] [added: 2021,] diluted earnings per share was [added: $14.75 (which included a $0.10 impact from acquisition-related expenses of Outward, Inc.) versus] $8.61 [added: in fiscal 2020] (which included a $0.26 impact related to store asset impairments, a $0.13 impact from acquisition-related expenses of Outward, Inc., an $0.11 impact related to inventory write-offs, and a $0.06 benefit related to the adjustment of certain deferred tax assets and [removed: liabilities) versus $4.49 in fiscal 2019 (which included a $0.30 impact from acquisition-related expenses and the operations of Outward, Inc., an $0.11 impact related to certain employment-related expenses, and an $0.08 benefit related to the adjustment of a deferred tax liability).][added: liabilities).]

[removed: Looking] [added: *Looking] Ahead to [removed: 2021][added: 2022*]

As we look forward to the year ahead, [removed: we will continue to] [added: our] focus [added: remains] on [added: executing against] our [removed: three key differentiators] [added: opportunities] to drive [removed: net] revenue and [removed: operating margin] [added: earnings] growth.

[added: For information on risks,] please see “Risk Factors” in Part I, Item 1A.

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

[removed: NET REVENUES][added: NET REVENUES]

[added: Net revenues consist of sales of merchandise to our customers through our e-commerce] websites, direct-mail catalogs, and at our retail stores and include shipping fees received from customers for delivery of merchandise to their homes.

Our revenues also include sales to our franchisees and wholesale customers, breakage income related to our stored-value cards, and incentives received from credit card issuers in connection with our private label and [added: co-branded credit cards.]

The following table summarizes our net revenues by brand for fiscal [removed: 2020] [added: 2021] and fiscal [removed: 2019:][added: 2020:]

| [removed: In thousands] [added: *(In thousands)*] | | [added: |] Fiscal [removed: 2020] [added: 2021] | | | | [added: | |] Fiscal [removed: 2019] [added: 2020] | | |

| Pottery Barn | | [added: |] $ | [removed: 2,526,241] [added: 3,120,687] | | | [added: | |] $ | [removed: 2,214,397] [added: 2,526,241] | |

| West Elm | | | [removed: 1,682,254] [added: 2,234,548] | | | | [removed: 1,466,537] | | [added: 1,682,254 | | |]

| Williams Sonoma | | | [removed: 1,242,271] [added: 1,345,851] | | | | [removed: 1,032,368] | | [added: 1,242,271 | | |]

| Pottery Barn Kids and Teen | | | [removed: 1,042,531] [added: 1,139,893] | | | | [removed: 908,561] | | [added: 1,042,531 | | |]

| Other [removed: 1] [added: *1*] | | | [removed: 289,892] [added: 404,957] | | | | [removed: 276,145] | | [added: 289,892 | | |]

| Total | | [added: |] $ | [removed: 6,783,189] [added: 8,245,936] | | | [added: | |] $ | [removed: 5,898,008] [added: 6,783,189] | |

[removed: | 1 | Primarily] [added: *1Primarily] consists of net revenues from [added: Rejuvenation,] our international franchise [removed: operations, Rejuvenation] [added: operations] and Mark and [removed: Graham. | |][added: Graham.*]

[removed: Comparable] [added: *Comparable] Brand [removed: Revenue][added: Revenue*]

[added: Comparable brand revenue includes comparable store sales and e-commerce] sales, including through our direct-mail catalog, as well as shipping fees, sales returns and other discounts associated with current period sales.

Comparable stores are defined as permanent stores where gross square footage did not change by more than 20% in the previous 12 [removed: months] [added: months,] and which have been open for at least 12 consecutive months without closure for seven or more consecutive [removed: days.][added: days within the same fiscal month.]

Comparable stores that were temporarily closed during [removed: the] [added: either] year due to [added: COVID-19 were not excluded from the comparable brand revenue calculation.]

Sales to our international franchisees are excluded from comparable brand revenue as their stores and [added: e-commerce websites are not operated by us.]

| [removed: Comparable] [added: *Comparable] brand revenue [removed: growth] [added: growth*] | | [added: |] Fiscal [removed: 2020] [added: 2021] | | | | [added: | |] Fiscal [removed: 2019] [added: 2020] | | |

| Pottery Barn | | | [removed: 15.2] [added: 23.9] | [added: |] % | | | [removed: 4.1] | [added: 15.2 | |] % |

| West Elm | | | [removed: 15.2] [added: 33.1] | | | | [removed: 14.4] | | [added: 15.2 | | |]

However, we have experienced, and may continue to experience, reduced traffic in our stores due to the continued uncertainty around COVID-19.

During fiscal 2021, global supply chain disruptions, including COVID-19 related factory closures and increased port congestion, caused delays in inventory receipts, increased raw material costs, shipping container shortages and higher shipping-related charges.

We expect these supply chain challenges to continue into fiscal 2022, which could negatively impact our business.

This was primarily driven by strength in both e-commerce and retail, primarily due to an increase in furniture sales, as well as the impact of stores operating at a limited capacity due to COVID-19 during portions of fiscal 2020.

The increase in net revenues also included a 23.4% increase in international revenues, related to both our franchise and company-owned operations.

On a two-year basis, comparable brand revenues increased 39.0%.

In West Elm, comparable brand revenue growth was 33.1%, with all categories driving growth.

The upholstery and outdoor businesses were strong, and customers responded well to new products, including bedroom, dining, storage, and occasional categories.

Pottery Barn, our largest brand, delivered 23.9% comparable brand revenue growth during the year driven by growth in all product categories, including our core lifestyle furniture category, home furnishings, decorating, our design services, and our furniture-advantaged growth initiatives such as apartment and our curated market-place assortment.

Our growth initiatives of Outdoor and Bath Renovation also out-paced our brand growth for the year.

The Williams Sonoma brand delivered comparable brand revenue growth of 10.5%, with growth across all key categories.

Strength in both electrics and home furniture drove these results.

In our Pottery Barn Kids and Teen businesses, we saw comparable brand revenue growth of 11.6% driven by our proprietary 100% GREENGUARD GOLD furniture and back-to-school assortment.

We also saw outsized growth in Baby, a key initiative and entry point to the brands.

This growth however, was impacted by the supply chain disruptions around the world, particularly the shutdown and backlog in Vietnam.

We expect to be impacted by this backlog until at least the second quarter of fiscal 2022.

We ended the year with a cash balance of $850,338,000 and generated positive operating cash flow of $1,371,147,000.

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Our three key differentiators - our in-house design, our digital-first channel strategy, and our values - continued to provide the framework for execution both in our core business and in our growth areas.

Throughout fiscal 2021, we continued our deliberate reduction in site-wide promotional cadence in all of our brands, and instead shifted our focus on delivering aspirational and inspirational content.

This pricing power also allowed us the flexibility to absorb supply chain costs and aggressively fund marketing efforts.

Our cross-brand loyalty program, The Key, drove record levels of engagement and membership.

Our recently launched cross-brand credit card has produced cardholder spend and cross-brand activity that has exceeded our expectations.

We are also focused on personalization efforts in our digital marketing.

We continue to leverage our in-house managed, first-party-data across our brands.

which we believe positions us well for the increased focus on consumer privacy and the “cookie-less” future that is rapidly approaching.

As a digital-first company, we are in continuous pursuit of incremental improvement to our customers’ shopping journey online.

We have improved several product-finding and purchasing experiences on our websites; from improved room styling, native registry applications, and the removal of friction in the checkout process.

Additionally, we relentlessly focus on continued optimization and automation in our distribution centers and logistics networks to improve our service times.

On the sustainability front, we take great pride in the progress we are making within our impact initiatives and ESG leadership across the home furnishings industry.

These commitments are reflected in the high quality, durable, sustainable products that we offer our customers, and continues to distinguish our company and our brands.

We believe revenue growth, in addition to strength across our core businesses, will be fueled by our strategic initiatives, including our business to business division and marketplace, our emerging brands, and our global operations.

We plan to drive this profitably from leverage across the income statement from ongoing higher sales growth; additional accretion from our accelerating growth initiatives that have a higher operating margin profile; an accelerating shift online where the operating margin is higher; strong merchandise margins from the pricing power our proprietary and vertically-integrated products provide; continued occupancy leverage from further store closures and reduced rents; various long-term supply chain efficiencies such as automation and better in-stock inventory levels; and leverage from overall strong financial discipline throughout, keeping expense growth below sales growth.

To drive this future growth, we plan to invest approximately $350,000,000 in the business with over 80% of the spend prioritized on technology and supply chain initiatives primarily to support e-commerce, including the addition of a new automated distribution center in Arizona.

In addition, we plan to return excess cash to shareholders in the form of increased dividend payouts and elevated share repurchases.

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Net revenues in fiscal 2021 increased by $1,462,747,000, or 21.6%, compared to fiscal 2020, with comparable brand revenue growth of 22.0% and double-digit comparable brand revenue growth across all our brands.

This was primarily driven by strength in both e-commerce and retail, primarily due to an increase in furniture sales, as well as the impact of stores operating at a limited capacity due to COVID-19 during portions of fiscal 2020.

The increase in net revenues also included a 23.4% increase in international revenues, related to both our franchise and company-owned operations.

On a two-year basis, comparable brand revenues increased 39.0%.

| --- | --- |

10-K

for fiscal 2019, filed with the SEC on March 27, 2020, which is available on the SEC’s website at www.sec.gov and under the Financial Reports section of our Investor Relations website.

e-commerce

websites, direct-mail catalogs and retail stores.

These brands are also part of The Key Rewards, our

free-to-join

websites in certain locations.

COVID-19

On March 11, 2020, the World Health Organization declared

to be a global pandemic and recommended containment and mitigation measures worldwide.

pandemic.

in-person

shopping.

However, given the continued uncertainty around

due to high rates of infections in certain areas, state and local officials in certain geographies have extended closures or restrictions on retail capacity, which may continue to impact our store traffic and retail revenues, and may result in future store impairments.

Throughout fiscal 2020, we have continued to operate our

sites and distribution centers and continued to deliver products to our customers.

However, governmental mandates, illness, or the absence of a substantial number of distribution center employees may require in the future that we temporarily close one or more of our distribution centers, or may prohibit or significantly limit us, or our third-party logistics providers from delivering packages to our customers and our stores, which could complicate or prevent us from fulfilling

orders and supplying merchandise to our stores.

This was primarily driven by an increase of approximately 44% in

revenues, due to both an increase in demand for our product as well as a larger portion of our net revenues being driven by furniture, which has a higher average selling price, partially offset by a decrease in retail revenues driven by limited capacity in stores and reduced customer store traffic due to

COVID-19.

The Williams Sonoma brand delivered comparable brand revenue growth of 23.8% as we implemented a content-driven marketing strategy that featured exclusive products and relevant lifestyle stories over promotions.

We also

grew our exclusive products to 70% of our total business, consistent with one of our key strategic initiatives to increase the mix of product that is only available at Williams Sonoma.

In our Pottery Barn Kids and Teen business, we delivered 16.6% comparable brand revenue growth, as we continue to amplify our leadership in design and sustainability in the children’s home furnishings business.

In addition to strong core introductions in furniture, we have added a new modern aesthetic that is driving growth and attracting new customers to our brands.

The Pottery Barn brand delivered comparable brand revenue growth of 15.2% and our multi-year work to improve our value proposition is paying off.

Our value-engineered products are attracting new customers and we believe our multi-step finish, high-quality furniture pieces are the best value in the market.

In West Elm, we delivered strong comparable brand revenue growth of 15.2% on top of 14.4% last year.

We continue to build this business with original design and by filling white space in underdeveloped categories.

We ended the year with a cash balance of $1,200,337,000, compared to $432,162,000 last year, which reflects our strong financial performance as well as operating cash flow, which was more than double last year.

Throughout fiscal 2020, our three key differentiators were instrumental to our strong financial performance.

They are: our

in-house

design, our

digital-first

channel strategy, and our values.

Our

[removed: Interest] [added: *Interest] Rate [removed: Risk][added: Risk*]

[removed: Credit Agreement each have] [added: Our Revolver has] a variable interest rate which, when drawn upon, subjects us to risks associated with changes in that interest rate.

As of January [removed: 31, 2021,] [added: 30, 2022,] our investments, made primarily in interest bearing demand deposit accounts and money market funds, are stated at cost and approximate their fair values.

[removed: Foreign] [added: *Foreign] Currency [removed: Risks][added: Risks*]

We purchase the majority of our inventory from vendors outside of the U.S. in transactions that are primarily denominated in U.S. dollars and, as such, any foreign currency impact related to these international purchase transactions was not significant to us during fiscal [removed: 2020] [added: 2021] or fiscal [removed: 2019.][added: 2020.]

While the impact of foreign currency exchange rate fluctuations was not material to us in fiscal [removed: 2020,] [added: 2021,] we have continued to see volatility in the exchange rates in the countries in which we do business.

During fiscal 2021, we had no borrowings under the Revolver.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

| --- | --- |

Our revolver, our term loan and our

364-Day

During the first quarter of fiscal 2020, we had borrowings of $487,823,000 under the revolver, all of which were repaid prior to the end of the fiscal year.

Additionally, as of January 31, 2021, we had $300,000,000 outstanding under our term loan, all of which was repaid in full in February 2021 prior to maturity, and no amount outstanding under our 364-Day Credit Agreement, which has not been drawn upon.

A hypothetical increase or decrease of one percentage point on our existing variable rate debt instruments would not materially affect our results of operations or cash flows.

[removed: OVERVIEW][added: OVERVIEW]

Williams-Sonoma, Inc., [removed: (“the Company”)] [added: (the "Company”, "we", or "us")] incorporated in 1973, is an omni-channel specialty retailer of high-quality products for the home.

He opened a store in Sonoma, [removed: California,] [added: California] to sell the French cookware that intrigued him while visiting Europe but that could not be found in America.

[added: Growth across our portfolio has been fueled by three areas of strategic investment: brand experimentation and innovation, for a best-in-class] approach to omni-channel retail experiences; operational excellence across the enterprise, from quality product and sourcing, to efficient manufacturing and supply chain; and culture and corporate social responsibility, from commitments to foster women in leadership and embrace diversity, to a healthy impact on our community and environment.

Our products represent distinct merchandise strategies — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, and Mark and Graham — are marketed through [added: e-commerce websites, direct-mail catalogs and retail stores.]

[added: These brands are also part of The Key Rewards, our free-to-join] loyalty program that offers members exclusive benefits across the Williams-Sonoma family of brands.

We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, offer international shipping to customers worldwide, and have unaffiliated franchisees that operate stores in the Middle East, the Philippines, Mexico, South Korea and India, as well as [added: e-commerce websites in certain locations.]

We are also proud to [removed: lead the] [added: be a leader in our] industry with our Environmental, Social and Governance (“ESG”) efforts.

[removed: Williams Sonoma][added: *Williams Sonoma*]

[removed: Pottery Barn][added: *Pottery Barn*]

[removed: Pottery] [added: *Pottery] Barn [removed: Kids][added: Kids*]

[removed: West Elm][added: *West Elm*]

West Elm creates unique, modern and affordable home decor and [removed: curate] [added: curates] a global selection of local, ethically-sourced and Fair Trade Certified products, available online and in our stores worldwide.

[removed: Pottery] [added: *Pottery] Barn [removed: Teen][added: Teen*]

[removed: Rejuvenation][added: *Rejuvenation*]

With design, manufacturing and distribution facilities in Portland, Oregon, Rejuvenation offers a wide assortment of [added: made-to-order lighting, hardware, furniture and home décor inspired by history, designed for today and made to last for years to come.]

[removed: Mark] [added: *Mark] and [removed: Graham][added: Graham*]

With [removed: over 100] [added: hundreds of] monograms and font types to choose from, a Mark and Graham purchase is uniquely personal.

The brand’s product lines include women’s and men’s accessories, [removed: small leather goods, jewelry, key item apparel, paper, entertaining and] [added: travel, entertaining,] bar, home décor and seasonal items.

[removed: Outward][added: *Outward*]

[added: In 2017, we acquired Outward, Inc., a 3-D] imaging and augmented reality platform for the home furnishings and décor industry.

[removed: OPERATIONS][added: OPERATIONS]

As of January [removed: 31, 2021,] [added: 30, 2022,] we had the following merchandise strategies: Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation and Mark and Graham, which sell our products through our [added: e-commerce websites, direct-mail catalogs and retail stores.]

We offer shipping from many of our brands to countries worldwide, while our catalogs reach customers throughout the U.S. The [added: e-commerce business complements the retail business by building brand awareness and acting as an effective advertising vehicle.]

[added: In addition, the retail] business complements the [removed: retail] [added: e-commerce] business by building brand awareness and [removed: acting as an effective advertising vehicle.][added: attracting new customers to our brands.]

[added: We believe that our e-commerce] websites and our direct-mail catalogs act as a cost-efficient means of testing market acceptance of new products and new brands.

Our customer mailings are continually updated to include new prospects and to eliminate [added: non-responders.]

We operate [removed: 581] [added: 544] stores, which include [removed: 538] [added: 502] stores in [removed: 42] [added: 41] states, Washington, D.C. and Puerto Rico, [removed: 21] [added: 20] stores in Canada, 19 stores in Australia and 3 stores in the United Kingdom.

We also have multi-year franchise agreements with third parties in the Middle East, the Philippines, Mexico, South Korea and India that currently operate [removed: 136] [added: 139] franchised locations as well as [added: e-commerce websites in certain locations.]

[removed: SUPPLIERS][added: SUPPLIERS]

We purchase most of our merchandise from numerous foreign and domestic manufacturers and importers, the largest of which accounted for approximately [removed: 4%] [added: 3%] of our purchases during fiscal [removed: 2020.][added: 2021.]

Approximately 65% of our merchandise purchases in fiscal [removed: 2020] [added: 2021] were sourced from foreign vendors, predominantly in Asia and Europe.

[removed: COMPETITION] [added: COMPETITION] AND [removed: SEASONALITY][added: SEASONALITY]

[added: The specialty e-commerce] and retail businesses are highly competitive.

[added: Our e-commerce] websites, direct-mail catalogs and retail stores compete with other retailers, including [added: e-commerce retailers, large department stores, discount retailers, other specialty retailers offering home-centered assortments and other direct-mail catalogs.]

[added: The continued shift to e-commerce] has encouraged the entry of many new competitors, including discount retailers selling undifferentiated products at reduced prices, new business models and has resulted in increased competition from established companies.

Our in-house teams design our own products and work with our talented vendors to bring quality, sustainable products to market through our high-touch [removed: multichannel] [added: multi-channel] platform.

In preparation for and during our holiday selling season, we hire a substantial number of additional temporary employees, primarily in our retail stores, [removed: customer care centers and] distribution [removed: facilities, and incur significant fixed catalog production] [added: facilities] and [removed: mailing costs.][added: customer care centers.]

[removed: HUMAN] [added: HUMAN] CAPITAL [removed: MANAGEMENT][added: MANAGEMENT]

As of January [removed: 31, 2021,] [added: 30, 2022,] we had approximately 21,000 employees, of whom approximately 12,200 were full-time.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

The global supply chain experienced numerous challenges and disruptions during fiscal 2021, including material and labor shortages, port congestion and capacity constraints, which has had, and is continuing to have, wide-ranging effects across multiple industries, including ours.

Refer to Item 1A.

Risk Factors and to Part II, Item 7.

MD&A for further discussion on the effect the global supply chain disruption has had on our results of operations.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

*Associate Engagement*

As of the end of fiscal 2021, approximately 67% of our total workforce identified as female and approximately 43% identified as in an ethnic minority group.

We were also included in the 2022 Bloomberg Gender-Equality Index, which tracks public companies’ commitment to gender equality, for the first time.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

To address the safety, health and well-being of our workforce due to the ongoing COVID-19 pandemic, we implemented a number of safety-related protocols and enhanced benefits, including:

- Providing a vaccine incentive to encourage front-line hourly workers to receive a COVID-19 vaccine;

- Hosting several onsite COVID-19 vaccination clinics at our supply chain facilities and corporate offices;

Depending on position and location, associates may be eligible for: 401(k) plan and other investment opportunities; paid vacations, holidays and other time-off programs; health, dental and vision insurance; health and dependent care tax-free spending accounts; medical, family and bereavement leave; paid maternity/primary caregiver benefits; tax-free commuter benefits; wellness programs including telehealth visits; time off to volunteer, and matching donations to qualifying nonprofit organizations.

During fiscal 2021, we also raised our Company minimum wage to $15 per hour for US-based hourly associates across all workforces.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

We believe that strategies that support the health of our planet, the well-being of our people and a shared sense of purpose drive long-term, sustainable growth for the Company.

Given the alignment of our ESG work with our strategic direction, our Board is highly engaged on the topic of sustainability.

Since 2019, our Nominations, Corporate Governance and Social Responsibility Committee and our Board have overseen ESG matters.

The Nominations, Corporate Governance and Social Responsibility Committee oversees corporate policies and programs that speak to long-standing commitments to our employees, supply chain, environment, health and safety, human rights, cybersecurity and ethics.

These policies and programs are relevant to our business, critical to our employees, and important to our customers.

Management of ESG is led by our Executive Vice President of Sourcing, Quality Assurance, and Sustainable Development, who coordinates a cross-functional team of subject matter experts, as well as a dedicated, global team of sustainability professionals.

Management provides reports and updates on our ESG initiatives to the Nominations, Corporate Governance and Social Responsibility Committee on a quarterly basis and to the full Board at least annually.

As a multinational retailer with a global supply chain, we are committed to environmentally sustainable practices across our business—from designing and sourcing responsible products and reducing waste to working with suppliers to lower emissions and adopt sustainable business practices.

We amplified our climate work in the past year, moving from a year-over-year reduction strategy to a 10-year, industry leading public goal aligned with climate science, and in 2021, we set a Science-Based Target for emissions reduction across our value chain.

We have also set goals for responsibly sourced materials and practices across all our brands, and we are aligning our responsible materials work with our climate strategy, using materials as part of our efforts to reach our Science-Based Target.

In 2021, we drove progress in our retail operations towards our landfill diversion goal with stores implementing waste reduction initiatives, such as backhauling of expanded polystyrene foam, and batteries and lightbulb recycling at all store locations.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

We continued to divert products from landfill into donation streams, implementing a new system to maximize recovery of product returns.

We hold our suppliers to high ethical standards, and we are committed to integrity and honesty throughout all aspects of our business.

We require our vendors to adhere to the standards outlined in our Vendor Code of Conduct and accompanying Implementation Standards, which are informed by the conventions of the International Labor Organization (ILO) and the UN’s Guiding Principles on Business and Human Rights.

We audit hundreds of factories annually to ensure compliance with our standards relating to labor practices, health and safety, environmental protection, ethical conduct, sub-contracting, management systems, and transparency.

Using a continuous improvement model, we work alongside factories to improve working conditions.

In 2021, we expanded our audit program scope, auditing a higher volume of our product purchases and covering more risks.

REGULATION

As a company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions.

Compliance with these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results of operations, or competitive position as compared to prior periods.

Also see the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

| --- | --- |

Growth across the Williams-Sonoma, Inc. portfolio has been fueled by three areas of strategic investment: brand experimentation and innovation, for a

best-in-class

e-commerce

websites, direct-mail catalogs and retail stores.

These brands are also part of The Key Rewards, our

free-to-join

websites in certain locations.

made-to-order

lighting, hardware, furniture and home décor inspired by history, designed for today and made to last for years to come.

In 2017, we acquired Outward, Inc., a

3-D

We believe that our

non-responders.

In addition, the retail business complements the

business by building brand awareness and attracting new customers to our brands.

The specialty

Our

retailers, large department stores, discount retailers, other specialty retailers offering home-centered assortments and other direct-mail catalogs.

The substantial sales growth in the

direct-to-customer

industry within the last decade, particularly in

e-commerce,

Employee Engagement

We offer a large selection of development opportunities for our employees including

in-person

We have a company-wide

Advisor Program, which matches associates in a Manager and above role with

non-managers

As of October 2019, 69% of our total workforce identified as female and 38% were minorities.

| --- | --- | --- | --- |

During fiscal 2020, to address the safety and health of our workforce due to the

COVID-19

pandemic, we implemented a number of safety-related protocols, including:

| | • | | Temporarily closing our stores and corporate offices, and implementing temporary work-from-home-policies; |

| | • | | Developing and distributing a playbook to guide the safe return to offices, stores, and work sites; and |

Depending on position and location, associates may be eligible for: 401(k) plan and other investment opportunities; paid vacations, holidays and other

time-off

programs; health, dental and vision insurance; health and dependent care

tax-free

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: WASHINGTON,] [added: WASHINGTON,] D.C. [removed: 20549][added: 20549]

[removed: FORM][added: | FORM | | | 10-K | | |]

| ☒ | [removed: ANNUAL] [added: | | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: | |]

For the fiscal year ended January [removed: 31, 2021.][added: 30, 2022.]

| ☐ | [removed: TRANSITION] [added: | | TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: | |]

For the transition period from [added: to]

Commission file number [added: 001-14077]

[removed: WILLIAMS-SONOMA, INC.][added: | WILLIAMS-SONOMA, INC. | | | | | | | | |]

[added: |] (Exact name of registrant as specified in its charter) [added: | | | | | | | | |]

| [removed: Delaware] [added: Delaware] | | [removed: 94-2203880] | [added: | | | | | | | | | 94-2203880 | | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | | | | | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| [removed: 3250] [added: 3250] Van Ness Avenue, San Francisco, [removed: CA] [added: CA] | | [removed: 94109] | [added: | | | | | | | | | 94109 | | |]

| (Address of principal executive offices) | | [added: | | | | | | | | | |] (Zip Code) | [added: | |]

Registrant’s telephone number, including area code: [added: (415) 421-7900]

| [removed: Title] [added: Title] of each [removed: class:] [added: class:] | | [removed: Trading Symbol(s):] | | [removed: Name] [added: | | | | | Trading Symbol(s): | | | | | | Name] of each exchange on which [removed: registered:] [added: registered:] | [added: | | | | |]

| [removed: Common] [added: Common] Stock, par value $.01 per [removed: share] [added: share] | | [removed: WSM] | | [removed: New] [added: | | | | | WSM | | | | | | New] York Stock Exchange, [removed: Inc.] [added: Inc.] | [added: | | | | |]

Yes [removed: ☒] [added: ý] No ☐

Yes ☐ No [removed: ☒][added: ý]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation [added: S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a [added: non-accelerated filer, a smaller reporting company, or emerging growth company.]

[removed: non-accelerated][added: Large accelerated filer ý Accelerated filer ☐ Non-accelerated filer ☐]

See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule [added: 12b-2 of the Exchange Act.]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit [removed: report.][added: report.☒]

Indicate by check mark whether the registrant is a shell company (as defined in Rule [added: 12b-2 of the Act).]

It is assumed for purposes of this computation that an affiliate includes all persons as of August [removed: 2, 2020] [added: 1, 2021] listed as executive officers and directors with the Securities and Exchange Commission.

As of March [removed: 21, 2021, 76,192,973] [added: 20, 2022, 71,558,874] shares of the registrant’s common stock were outstanding.

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of our definitive Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders, also referred to in this Annual Report on Form [added: 10-K as our Proxy Statement, which will be filed with the Securities and Exchange Commission, or SEC, have been incorporated in Part III hereof.]

[removed: FORWARD-LOOKING STATEMENTS][added: FORWARD-LOOKING STATEMENTS]

[removed: This Annual Report on Form][added: ANNUAL REPORT ON FORM 10-K]

[added: This Annual Report on Form 10-K] and the letter to stockholders contained in this Annual Report contain forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our business and operating results to differ materially from those expressed or implied by such forward-looking statements.

[added: Such forward-looking statements include, without limitation, statements related to: projections of earnings, revenues, growth] and [added: other financial items; the strength of our business and our brands; our ability to execute strategic priorities and growth initiatives regarding digital leadership, product and technology innovation, cross-brand initiatives,] retail [removed: channels;] [added: transformation and operational excellence;] our [removed: marketing efforts;] [added: ability to execute on] our [removed: acquisition] [added: environmental, social and governance initiatives; our beliefs about our competitive advantages and areas] of [removed: Outward, Inc.,] [added: potential future growth in the market; our ability to drive long-term sustainable returns; the plans, strategies, initiatives and objectives of management for future operations; our brands, products and related initiatives,] including [added: our ability to introduce new brands, brand extensions, products and product lines and bring in new customers; our belief that our e-commerce websites and direct-mail catalogs act as a cost-efficient means of testing market acceptance of new products and new brands;] the [removed: valuation] [added: complementary nature] of [removed: intangible assets acquired;] our [added: e-commerce and retail channels; our marketing efforts; our] global business and expansion efforts, including franchise, other third-party arrangements and company-owned operations; our ability to attract new customers; the seasonal variations in demand; our ability to recruit, retain and motivate skilled personnel; our belief in the reasonableness of the steps taken to protect the security and confidentiality of the information we collect; our belief in the adequacy of our facilities and the availability of suitable additional or substitute space; our belief in the ultimate resolution of current legal proceedings; the payment of dividends; our stock repurchase program; our capital allocation strategy in fiscal [removed: 2021;] [added: 2022;] our planned use of cash in fiscal [removed: 2021;] [added: 2022;] our compliance with financial covenants; our belief that our cash on hand and available credit facilities will provide adequate liquidity for our business [removed: operations over the next 12 months;] [added: operations;] the [removed: impact] [added: continuing effects] of the [removed: 2017 Tax Cuts] [added: COVID-19 pandemic or other public health crises] and [removed: Jobs Act; the impact of tariffs] [added: their related public health measures] on our [added: business, the] business [removed: and our results] of [removed: operations;] our [added: customers and partners, and the economy; our] belief regarding the effects of potential losses under our indemnification obligations; the impact of inflation; the effects of changes in our inventory reserves; the impact of new accounting pronouncements; the impact of the coronavirus on our retail store operations, global supply chain and customer spending and demand; and statements of belief and statements of assumptions underlying any of the foregoing.

The risks, uncertainties and assumptions referred to above that could cause our results to differ materially from the results expressed or implied by such forward-looking statements include, but are not limited to, those discussed under the heading “Risk Factors” in [added: Part I,] Item 1A hereto and the risks, uncertainties and assumptions discussed from time to time in our other public filings [added: with the U.S. Securities] and [removed: public announcements.][added: Exchange Commission (“SEC”), which are available on the SEC’s web site at www.sec.gov.]

All forward-looking statements included in this [removed: document] [added: Annual Report on Form 10-K] are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

[removed: FISCAL] [added: FISCAL] YEAR ENDED JANUARY [removed: 31, 2021][added: 30, 2022]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | | | [removed: PAGE] | | [added: PAGE] | [added: | |]

| | | [removed: PART I] | [added: PART I] | | | | [added: | |]

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

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Yes ý No ☐

Yes ý No ☐

As of August 1, 2021, the approximate aggregate market value of the registrant’s common stock held by non-affiliates was $11,176,524,000 based on the closing sale price as reported on the New York Stock Exchange on such date.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

WILLIAMS-SONOMA, INC.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| Item 6. | | | [Reserved](#if588bc1041b846048fb4bcf624039a26_40) | | | [26](#if588bc1041b846048fb4bcf624039a26_40) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#if588bc1041b846048fb4bcf624039a26_1598) | | | [58](#if588bc1041b846048fb4bcf624039a26_163) | | |

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[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

10-K

| --- | --- |

to

001-14077

| | | |

| --- | --- | --- |

(415) 421-7900

| | | | | |

| --- | --- | --- | --- | --- |

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

filer, a smaller reporting company, or emerging growth company.

12b-2

of the Exchange Act.

Large accelerated

filer

☒ Accelerated filer ☐ Non-accelerated

filer ☐

of the Act).

As of August 2, 2020, the approximate aggregate market value of the registrant’s common stock held by

non-affiliates

was $6,720,032,000.

as our Proxy Statement, which will be filed with the Securities and Exchange Commission, or SEC, have been incorporated in Part III hereof.

Such forward-looking statements include, without limitation, statements related to: projections of earnings, revenues, growth and other financial items; the strength of our business and our brands; our ability to execute strategic priorities and growth initiatives regarding digital leadership, product and technology innovation, cross-brand initiatives, retail transformation and operational excellence; our beliefs about our competitive advantages and areas of potential future growth in the market; our ability to drive long-term sustainable returns; the plans, strategies, initiatives and objectives of management for future operations; our brands, products and related initiatives, including our ability to introduce new brands, brand extensions, products and product lines and bring in new customers; our belief that our

e-commerce

websites and direct-mail catalogs act as a cost-efficient means of testing market acceptance of new products and new brands; the complementary nature of our

ANNUAL REPORT ON FORM

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Item 6. | | [Selected Financial Data](#tx93631_8) | | | 33 | |

| --- | --- |

For our store locations, our gross leased store space as of January [removed: 31, 2021] [added: 30, 2022] totaled approximately [removed: 6,301,000] [added: 6,004,000] square feet for [removed: 581] [added: 544] stores compared to approximately [removed: 6,558,000] [added: 6,301,000] square feet for [removed: 614] [added: 581] stores as of [removed: February 2, 2020.][added: January 31, 2021.]

[removed: Leased Properties][added: *Leased Properties*]

The following table summarizes the location and size of our leased facilities occupied by us as of January [removed: 31, 2021:][added: 30, 2022:]

| Location | | | Occupied Square Footage (Approximate) | | [added: |]

| [removed: Distribution] [added: *Distribution] and Manufacturing [removed: Facilities] [added: Facilities*] | | | | | [added: |]

| Mississippi | | | 2,258,000 | | [added: |]

| New Jersey | | | [removed: 2,103,000] [added: 3,269,000] | | [added: |]

| California | | | 2,030,000 | | [added: |]

| Texas | | | 1,298,000 | | [added: |]

| Georgia | | | [removed: 1,075,000] [added: 1,537,000] | | [added: |]

| Tennessee | | | 603,000 | | [added: |]

| North Carolina | | | [removed: 442,000] [added: 412,000] | | [added: |]

| Ohio | | | [removed: 153,000] [added: 330,000] | | [added: |]

| Massachusetts | | | 140,000 | | [added: |]

| Florida | | | 135,000 | | [added: |]

| Oregon | | | [removed: 91,000] [added: 93,000] | | [added: |]

| Colorado | | | 80,000 | | [added: |]

| [removed: Corporate Facilities] [added: *Corporate Facilities*] | | | | | [added: |]

| California | | | [removed: 269,000] [added: 255,000] | | [added: |]

| New York | | | 238,000 | | [added: |]

| Oregon | | | [removed: 49,000] [added: 51,000] | | [added: |]

| [removed: Customer] [added: *Customer] Care [removed: Centers] [added: Centers*] | | | | | [added: |]

| Nevada | | | 36,000 | | [added: |]

| Other | | | 32,000 | | [added: |]

As of January [removed: 31, 2021,] [added: 30, 2022,] the total leased space related to these properties was not material to us and is not included in the occupied square footage reported above.

[removed: Owned Properties][added: *Owned Properties*]

As of January [removed: 31, 2021,] [added: 30, 2022,] we owned 471,000 square feet of space, primarily in California, for our corporate headquarters and certain data center operations.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

In November 2021, we entered into an agreement for a new distribution facility in Arizona, which is expected to be operational in fiscal 2022.

This facility has approximately 1,200,000 leased square feet.

The square footage is not included in the table above.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

| | | | | |

| --- | --- | --- | --- | --- |

[removed: PART II][added: PART II]

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

[removed: MARKET INFORMATION][added: MARKET INFORMATION]

The closing price of our common stock on the NYSE on March [removed: 21, 2021] [added: 20, 2022] was [removed: $174.84.][added: $164.18.]

[removed: STOCKHOLDERS][added: STOCKHOLDERS]

The number of stockholders of record of our common stock as of March [removed: 21, 2021] [added: 20, 2022] was [removed: 299.][added: 290.]

[removed: PERFORMANCE GRAPH][added: PERFORMANCE GRAPH]

[removed: COMPARISON] [added: COMPARISON] OF FIVE YEAR CUMULATIVE TOTAL [removed: RETURN*][added: RETURN*]

[removed: Among] [added: Among] Williams-Sonoma, Inc., the NYSE Composite [removed: Index,][added: Index,]

[removed: and] [added: and] S&P [removed: Retailing][added: Retailing]

[removed: ][added: ]

[removed: | * | $100] [added: *$100] invested on [removed: 1/31/16] [added: 1/29/2017] in stock or index, including reinvestment of dividends. [removed: Fiscal year ending January 31, 2021. |]

[removed: Notes:][added: Notes:]

[removed: | A. | The] [added: A.The] lines represent monthly index levels derived from compounded daily returns that include all dividends. [removed: |]

[removed: | B. | The] [added: B.The] indices are re-weighted daily, using the market capitalization on the previous trading day. [removed: |]

[removed: | C. | If] [added: C.If] the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used. [removed: |]

[removed: STOCK] [added: STOCK] REPURCHASE [removed: PROGRAM][added: PROGRAM]

During fiscal [removed: 2020,] [added: 2021,] we repurchased [removed: 1,496,100] [added: 5,102,624] shares of our common stock at an average cost of [removed: $100.26] [added: $176.27] per share and a total cost of [removed: $150,000,000.][added: $899,433,000.]

As of January [removed: 31, 2021,] [added: 30, 2022,] there was [removed: approximately $424,982,000] [added: $810,751,000] remaining under our current stock repurchase program.

In March [removed: 2021,] [added: 2022,] our Board of Directors authorized a new stock repurchase program for [removed: $1,000,000,000,] [added: $1,500,000,000,] which replaced our existing program.

The following table summarizes our repurchases of shares of our common stock during the fourth quarter of fiscal [removed: 2020] [added: 2021] under our stock repurchase program:

| Fiscal period | | | | | [added: |] Total Number of Shares [removed: Purchased 1] [added: Purchased*1*] | | | | [added: | |] Average Price Paid Per Share | | | | [added: | |] Total Number of Shares Purchased as Part of a Publicly Announced [removed: Program 1] [added: Program*1*] | | | | [added: | |] Maximum Dollar Value of Shares That May Yet Be Purchased Under the Program | | [added: |]

[removed: | 1 | Excludes] [added: *1Excludes] shares withheld for employee taxes upon vesting of stock-based [removed: awards. |][added: awards*]

DIVIDENDS

While we have historically paid dividends to holders of our common stock on a quarterly basis, the declaration and payment of future dividends will depend on many factors, including, but not limited to, our earnings, financial condition, business development needs and regulatory considerations, and are at the discretion of our Board of Directors.

Fiscal year ending January 30, 2022.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 1/29/17 | | | | | | 1/28/18 | | | | | | 2/3/19 | | | | | | 2/2/20 | | | | | | 1/31/21 | | | | | | 1/30/22 | | |

| Williams-Sonoma, Inc. | | | | | | $100.00 | | | | | | $115.92 | | | | | | $120.93 | | | | | | $161.55 | | | | | | $304.39 | | | | | | $371.43 | | |

| NYSE Composite Index | | | | | | $100.00 | | | | | | $122.07 | | | | | | $115.21 | | | | | | $130.84 | | | | | | $141.76 | | | | | | $167.51 | | |

| S&P Retailing | | | | | | $100.00 | | | | | | $148.34 | | | | | | $159.89 | | | | | | $190.43 | | | | | | $278.09 | | | | | | $296.49 | | |

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| November 1, 2021 – November 28, 2021 | | | | | | 384,319 | | | | | | $ | 207.47 | | | | | 384,319 | | | | | | $ | 977,751,000 | |

| November 29, 2021 – December 26, 2021 | | | | | | 973,538 | | | | | | $ | 171.54 | | | | | 973,538 | | | | | | $ | 810,751,000 | |

| December 27, 2021 – January 30, 2022 | | | | | | — | | | | | | — | | | | | | — | | | | | | $ | 810,751,000 | |

| Total | | | | | | 1,357,857 | | | | | | $ | 181.71 | | | | | 1,357,857 | | | | | | $ | 810,751,000 | |

| --- | --- |

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 1/31/16 | | 1/29/17 | | 1/28/18 | | 2/3/19 | | 2/2/20 | | 1/31/21 |

| Williams-Sonoma, Inc. | | $100.00 | | $94.58 | | $109.64 | | $114.38 | | $152.80 | | $287.90 |

| NYSE Composite Index | | $100.00 | | $119.63 | | $146.03 | | $137.82 | | $156.52 | | $169.59 |

| S&P Retailing | | $100.00 | | $120.09 | | $174.49 | | $186.29 | | $219.46 | | $316.05 |

During fiscal 2019, we repurchased 2,341,931 shares of our common stock, of which 16,368 shares were designated as treasury stock, at an average cost of $63.55 per share and a total cost of $148,834,000.

During fiscal 2018, we repurchased 5,373,047 shares of our common stock at an average cost of $54.96 per share and a total cost of $295,304,000.

| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| November 2, 2020 – November 29, 2020 | | | | | 125,310 | | | | $ 98.91 | | | | 125,310 | | | | $ 453,539,000 | |

| November 30, 2020 – December 27, 2020 | | | | | 116,800 | | | | $ 108.75 | | | | 116,800 | | | | $ 440,837,000 | |

| December 28, 2020 – January 31, 2021 | | | | | 134,655 | | | | $ 117.75 | | | | 134,655 | | | | $ 424,982,000 | |

| Total | | | | | 376,765 | | | | $ 108.69 | | | | 376,765 | | | | $ 424,982,000 | |

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

| --- | --- |

Five-Year Selected Financial Data

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| In thousands, except percentages, per share amounts and retail stores data | | Fiscal 2020 (52 Weeks) | | | | Fiscal 2019 (52 Weeks) | | | | Fiscal 2018 1 (53 Weeks) | | | | Fiscal 2017 (52 Weeks) | | | | Fiscal 2016 (52 Weeks) | | |

| Results of Operations | | | | | | | | | | | | | | | | | | | | |

| Net revenues | | $ | 6,783,189 | | | $ | 5,898,008 | | | $ | 5,671,593 | | | $ | 5,292,359 | | | $ | 5,083,812 | |

| Net revenue growth | | | 15.0% | | | | 4.0% | | | | 7.2% | | | | 4.1% | | | | 2.2% | |

| Comparable brand revenue growth 2 | | | 17.0% | | | | 6.0% | | | | 3.7% | | | | 3.2% | | | | 0.7% | |

| Gross profit | | $ | 2,636,269 | | | $ | 2,139,092 | | | $ | 2,101,013 | | | $ | 1,931,711 | | | $ | 1,883,310 | |

| Gross margin | | | 38.9% | | | | 36.3% | | | | 37.0% | | | | 36.5% | | | | 37.0% | |

| Operating income | | $ | 910,697 | | | $ | 465,874 | | | $ | 435,953 | | | $ | 453,811 | | | $ | 472,599 | |

| Operating margin 3 | | | 13.4% | | | | 7.9% | | | | 7.7% | | | | 8.6% | | | | 9.3% | |

| Net earnings | | $ | 680,714 | | | $ | 356,062 | | | $ | 333,684 | | | $ | 259,545 | | | $ | 305,387 | |

| Basic earnings per share | | $ | 8.81 | | | $ | 4.56 | | | $ | 4.10 | | | $ | 3.03 | | | $ | 3.45 | |

| Diluted earnings per share | | $ | 8.61 | | | $ | 4.49 | | | $ | 4.05 | | | $ | 3.02 | | | $ | 3.41 | |

| Shares used in calculation of earnings per share: Basic | | | 77,260 | | | | 78,108 | | | | 81,420 | | | | 85,592 | | | | 88,594 | |

| Diluted | | | 79,055 | | | | 79,225 | | | | 82,340 | | | | 86,080 | | | | 89,462 | |

| Financial Position | | | | | | | | | | | | | | | | | | | | |

| Working capital 4 | | $ | 619,080 | | | $ | 146,080 | | | $ | 619,531 | | | $ | 628,622 | | | $ | 405,924 | |

| Total assets 4 | | $ | 4,661,424 | | | $ | 4,054,042 | | | $ | 2,812,844 | | | $ | 2,785,749 | | | $ | 2,476,879 | |

| Return on assets 4 | | | 15.6% | | | | 10.4% | | | | 11.9% | | | | 9.9% | | | | 12.5% | |

| Net cash provided by operating activities | | $ | 1,274,848 | | | $ | 607,294 | | | $ | 585,986 | | | $ | 499,704 | | | $ | 524,709 | |

| Capital expenditures | | $ | 169,513 | | | $ | 186,276 | | | $ | 190,102 | | | $ | 189,712 | | | $ | 197,414 | |

| Long-term debt and other long-term liabilities 4 | | $ | 1,141,627 | | | $ | 1,180,968 | | | $ | 380,944 | | | $ | 372,226 | | | $ | 71,215 | |

| Stockholders’ equity | | $ | 1,651,185 | | | $ | 1,235,860 | | | $ | 1,155,714 | | | $ | 1,203,566 | | | $ | 1,248,220 | |

| Stockholders’ equity per share (book value) | | $ | 21.63 | | | $ | 16.02 | | | $ | 14.66 | | | $ | 14.37 | | | $ | 14.29 | |

| Return on equity | | | 47.2% | | | | 29.8% | | | | 28.3% | | | | 21.2% | | | | 25.0% | |

| Annual dividends declared per share | | $ | 2.02 | | | $ | 1.92 | | | $ | 1.72 | | | $ | 1.56 | | | $ | 1.48 | |

| Number of stores at year-end | | | 581 | | | | 614 | | | | 625 | | | | 631 | | | | 629 | |

| Store selling square footage at year-end | | | 3,975,000 | | | | 4,129,000 | | | | 4,105,000 | | | | 4,019,000 | | | | 3,951,000 | |

| Store leased square footage at year-end | | | 6,301,000 | | | | 6,558,000 | | | | 6,557,000 | | | | 6,451,000 | | | | 6,359,000 | |

| 1 | In fiscal 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, using the modified retrospective method. Amounts reported for fiscal 2017 and fiscal 2016 have not been adjusted, and continue to be reported in accordance with previous revenue recognition guidance. |

| 2 | Comparable brand revenue is calculated on a 52-week to 52-week basis, with the exception of fiscal 2018 which is calculated on a 53-week to 53-week basis. See definition of comparable brand revenue within “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |

| 3 | Operating margin is defined as operating income as a percent of net revenues. |

| 4 | In fiscal 2019, we adopted ASU 2016-02, Leases, as of the adoption date. Amounts reported for fiscal 2018 and prior years have not been adjusted, and continue to be reported in accordance with previous lease accounting guidance. See Note A to the Consolidated Financial Statements. |

The information set forth above is not necessarily indicative of future operations and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and notes thereto in this Annual Report on Form

10-K.

[removed: Williams-Sonoma, Inc.][added: Williams-Sonoma, Inc.]

[removed: Consolidated] [added: Consolidated] Statements of [removed: Earnings][added: Earnings]

| [removed: In] [added: *(In] thousands, except per share [removed: amounts] [added: amounts)*] | | | [removed: Fiscal 2020 (52 weeks)] [added: January 30, 2022] | | | | [removed: Fiscal 2019 (52 weeks)] | | [added: January 31, 2021] | | [removed: Fiscal 2018 (53 weeks)] | | [added: | | February 2, 2020 | | |]

| Net revenues | | [added: |] $ | [removed: 6,783,189] [added: 8,245,936] | | | [added: | |] $ | [removed: 5,898,008] [added: 6,783,189] | | | [added: | |] $ | [removed: 5,671,593] [added: 5,898,008] | |

| Cost of goods sold | | | [removed: 4,146,920] [added: 4,613,973] | | | | [removed: 3,758,916] | | [added: 4,146,920] | | [removed: 3,570,580] | | [added: | | 3,758,916 | | |]

| Gross profit | | | [removed: 2,636,269] [added: 3,631,963] | | | | [removed: 2,139,092] | | [added: 2,636,269] | | [removed: 2,101,013] | | [added: | | 2,139,092 | | |]

| Selling, general and administrative expenses | | | [removed: 1,725,572] [added: 2,178,847] | | | | [removed: 1,673,218] | | [added: 1,725,572] | | [removed: 1,665,060] | | [added: | | 1,673,218 | | |]

| Operating income | | | [removed: 910,697] [added: 1,453,116] | | | | [removed: 465,874] | | [added: 910,697] | | [removed: 435,953] | | [added: | | 465,874 | | |]

| Interest expense, net | | | [removed: 16,231] [added: 1,865] | | | | [removed: 8,853] | | [added: 16,231] | | [removed: 6,706] | | [added: | | 8,853 | | |]

| Earnings before income taxes | | | [removed: 894,466] [added: 1,451,251] | | | | [removed: 457,021] | | [added: 894,466] | | [removed: 429,247] | | [added: | | 457,021 | | |]

| Income taxes | | | [removed: 213,752] [added: 324,914] | | | | [removed: 100,959] | | [added: 213,752] | | [removed: 95,563] | | [added: | | 100,959 | | |]

| Net earnings | | [added: |] $ | [removed: 680,714] [added: 1,126,337] | | | [added: | |] $ | [removed: 356,062] [added: 680,714] | | | [added: | |] $ | [removed: 333,684] [added: 356,062] | |

| Basic earnings per share | | [added: |] $ | [removed: 8.81] [added: 15.17] | | | [added: | |] $ | [removed: 4.56] [added: 8.81] | | | [added: | |] $ | [removed: 4.10] [added: 4.56] | |

| Diluted earnings per share | | [added: |] $ | [removed: 8.61] [added: 14.75] | | | [added: | |] $ | [removed: 4.49] [added: 8.61] | | | [added: | |] $ | [removed: 4.05] [added: 4.49] | |

| Shares used in calculation of earnings per share: | | | | | | | | | | | | | [added: | | | | |]

| Basic | | | [removed: 77,260] [added: 74,272] | | | | [removed: 78,108] | | [added: 77,260] | | [removed: 81,420] | | [added: | | 78,108 | | |]

| Diluted | | | [removed: 79,055] [added: 76,354] | | | | [removed: 79,225] | | [added: 79,055] | | [removed: 82,340] | | [added: | | 79,225 | | |]

[removed: See] [added: *See] Notes to Consolidated Financial [removed: Statements.][added: Statements.*]

[removed: Consolidated] [added: Consolidated] Statements of Comprehensive [removed: Income][added: Income]

| Net earnings | | | $ [removed: 680,714] | [added: 1,126,337] | | | [added: | |] $ [removed: 356,062] | [added: 680,714] | | | [added: | |] $ [removed: 333,684] | [added: 356,062] | [added: |]

| Other comprehensive income (loss): | | | | | | | | | | | | | [added: | | | | |]

| Foreign currency translation adjustments | | | [removed: 8,195] [added: (4,488)] | | | | [removed: (3,334] | [removed: )] | [added: 8,195] | | [removed: (5,032] | [removed: )] | [added: | | (3,334) | | |]

| Change in fair value of derivative financial instruments, net of tax (tax benefit) of [removed: $(113), $ 195] [added: $(91), $(113)] and [removed: $390] [added: $195] | | | [removed: (315] [added: (247)] | [removed: )] | | | [removed: 163] | | [added: (315)] | | [removed: 1,098] | | [added: | | 163 | | |]

| Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax (tax benefit) of [removed: $149, $261] [added: $(371), $149] and [removed: $122] [added: $261] | | | [removed: (410] [added: 1,024] | [removed: )] | | | [removed: (343] | [removed: )] | [added: (410)] | | [removed: (357] | [removed: )] | [added: | | (343) | | |]

| Comprehensive income | | | $ [removed: 688,184] | [added: 1,122,626] | | | [added: | |] $ [removed: 352,548] | [added: 688,184] | | | [added: | |] $ [removed: 329,393] | [added: 352,548] | [added: |]

[removed: Consolidated] [added: Consolidated] Balance [removed: Sheets][added: Sheets]

| [removed: In] [added: *(In] thousands, except per share [removed: amounts] [added: amounts)*] | | [removed: Jan. 31, 2021] | [added: January 30, 2022] | | | [removed: Feb. 2, 2020] | | | [added: January 31, 2021 | | |]

| ASSETS | | | | | | | | | [added: | | |]

| Current assets | | | | | | | | | [added: | | |]

| Cash and cash equivalents [added: at beginning of year] | | [removed: $] | 1,200,337 | | | [removed: $] | [added: | |] 432,162 | | [added: | | | | 338,954 | | |]

| Accounts receivable, net | | | [removed: 143,728] [added: 131,683] | | | | [removed: 111,737] | | [added: 143,728 | | |]

| Merchandise inventories, net | | | [removed: 1,006,299] [added: 1,246,372] | | | | [removed: 1,100,544] | | [added: 1,006,299 | | |]

| Prepaid expenses | | | [removed: 93,822] [added: 69,252] | | | | [removed: 90,426] | | [added: 93,822 | | |]

| Other current assets | | | [removed: 22,894] [added: 26,249] | | | | [removed: 20,766] | | [added: 22,894 | | |]

| Total current assets | | | [removed: 2,467,080] [added: 2,323,894] | | | | [removed: 1,755,635] | | [added: 2,467,080 | | |]

| Property and equipment, net | | | [removed: 873,894] [added: 920,773] | | | | [removed: 929,038] | | [added: 873,894 | | |]

| Operating lease right-of-use assets | | | [removed: 1,086,009] [added: 1,132,764] | | | | [removed: 1,166,383] | | [added: 1,086,009 | | |]

| Deferred income taxes, net | | | [removed: 61,854] [added: 56,585] | | | | [removed: 47,977] | | [added: 61,854 | | |]

| Goodwill | | | [removed: 85,446] [added: 85,354] | | | | [removed: 85,343] | | [added: 85,446 | | |]

| Other long-term assets, net | | | [removed: 87,141] [added: 106,250] | | | | [removed: 69,666] | | [added: 87,141 | | |]

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | For the Fiscal Year Ended | | | | | | | | | | | | | | |

Williams-Sonoma, Inc.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | For the Fiscal Year Ended | | | | | | | | | | | | | | |

| *(In thousands)* | | | January 30, 2022 | | | | | | January 31, 2021 | | | | | | February 2, 2020 | | |

*See Notes to Consolidated Financial Statements.*

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

Williams-Sonoma, Inc.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

*See Notes to Consolidated Financial Statements.*

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

Williams-Sonoma, Inc.

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| Net earnings | | | — | | | | | | — | | | | | | — | | | | | | 1,126,337 | | | | | | — | | | | | | — | | | | | | 1,126,337 | | |

| Conversion/release of stock-based awards*1* | | | 745 | | | | | | 7 | | | | | | (103,742) | | | | | | — | | | | | | — | | | | | | (500) | | | | | | (104,235) | | |

| Repurchases of common stock | | | (5,103) | | | | | | (51) | | | | | | (26,806) | | | | | | (872,576) | | | | | | — | | | | | | — | | | | | | (899,433) | | |

| Dividends declared | | | — | | | | | | — | | | | | | — | | | | | | (199,395) | | | | | | — | | | | | | — | | | | | | (199,395) | | |

| Balance at January 30, 2022 | | | 71,982 | | | | | | $ | 720 | | | | | $ | 600,942 | | | | | $ | 1,074,084 | | | | | $ | (10,828) | | | | | $ | (711) | | | | | $ | 1,664,207 | |

*See Notes to Consolidated Financial Statements.*

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

Williams-Sonoma, Inc.

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| | | | For the Fiscal Year Ended | | | | | | | | | | | | | | |

| *(In thousands)* | | | January 30, 2022 | | | | | | January 31, 2021 | | | | | | February 2, 2020 | | |

| Net earnings | | | $ | 1,126,337 | | | | | $ | 680,714 | | | | | $ | 356,062 | |

| Repayment of long-term debt | | | (300,000) | | | | | | — | | | | | | — | | |

*See Notes to Consolidated Financial Statements.*

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

Williams-Sonoma, Inc.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

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During fiscal 2021, no impairment charges were recognized.

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| In thousands | | | Fiscal 2020 (52 weeks) | | | | Fiscal 2019 (52 weeks) | | | | Fiscal 2018 (53 weeks) | |

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| Balance at January 28, 2018 | | | 83,726 | | | $ | 837 | | | $ | 562,814 | | | $ | 647,422 | | | $ | (6,782) | | | $ | (725 | ) | | $ | 1,203,566 | |

| Net earnings | | | — | | | | — | | | | — | | | | 333,684 | | | | — | | | | — | | | | 333,684 | |

| Conversion/release of stock-based awards 1 | | | 460 | | | | 5 | | | | (14,149 | ) | | | — | | | | — | | | | (291 | ) | | | (14,435 | ) |

| Repurchases of common stock | | | (5,373 | ) | | | (53 | ) | | | (25,775 | ) | | | (269,476 | ) | | | — | | | | — | | | | (295,304 | ) |

| Dividends declared | | | — | | | | — | | | | — | | | | (144,609 | ) | | | — | | | | — | | | | (144,609 | ) |

| 2 | Primarily relates to our adoption of ASU 2014-09, Revenue from Contracts with Customers, in fiscal 2018. |

| In thousands | | Fiscal 2020 (52 Weeks) | | | | Fiscal 2019 (52 Weeks) | | | | Fiscal 2018 (53 Weeks) | | |

| Deferred rent and lease incentives | | | — | | | | — | | | | 24,929 | |

e-commerce

websites, direct-mail catalogs and retail stores.

These brands are also part of The Key Rewards, our

free-to-join

websites in certain locations.

53-week

year.

52-week

year, ended on February 2, 2020; and Fiscal 2018, a

year, ended on February 3, 2019.

The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage.

Actual shrinkage is recorded at

year-end

off-site

storage locations, and with our third-party warehouse and transportation providers.

year-end.

We made no material changes to our assumptions included in the calculations of the obsolescence and shrinkage reserves throughout fiscal year 2020.

9,827,000

and $

13,424,000

, respectively.

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right-of-use

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[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

As of January [removed: 31, 2021,] [added: 30, 2022,] an evaluation was performed by management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures.

Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of [removed: 1934] [added: 1934, as amended,] is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for timely discussions regarding required disclosures, and that such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting][added: Reporting]

Our management assessed the effectiveness of the Company’s internal control over financial reporting as of January [removed: 31, 2021.][added: 30, 2022.]

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in [added: *Internal Control-Integrated Framework (2013).* Based on our assessment using those criteria, our management concluded that, as of January 30, 2022, our internal control over financial reporting is effective.]

Our independent registered public accounting firm audited the Consolidated Financial Statements included in this Annual Report on Form [added: 10-K and the Company’s internal control over financial reporting.]

[removed: and the Company’s internal control over financial reporting.][added: Changes in Internal Control Over Financial Reporting]

Their audit report appears on pages [removed: 69] [added: 56] through [removed: 71] [added: 57] of this Annual Report on Form [added: 10-K.]

There were no significant changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal [removed: 2020,] [added: 2021,] that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Internal Control-Integrated Framework (2013).

Based on our assessment using those criteria, our management concluded that, as of January 31, 2021, our internal control over financial reporting is effective.

10-K

10-K.

Changes in Internal Control Over Financial Reporting

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PART III

Not applicable.

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

PART III

Information required by this Item is incorporated by reference herein to information under the headings “Election of Directors,” “Information Concerning Executive Officers,” “Audit and Finance Committee Report,” “Corporate Governance — Corporate Governance Guidelines and Code of Business Conduct and Ethics,” and “Corporate Governance — Audit and Finance Committee” in our Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of [removed: Stockholders] [added: Stockholders, which will be filed with the SEC no later than 120 days after January 30, 2022] (the “Proxy Statement”).

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Information [removed: required] [added: about aggregate fees billed to us] by [removed: this Item] [added: our principal accountant, Deloitte & Touche LLP (PCAOB ID #34),] is incorporated by reference herein to information under the headings “Audit and Finance Committee Report” and “Proposal [removed: 4] [added: 3] — Ratification of Selection of Independent Registered Public Accounting Firm — Deloitte Fees and Services” in our Proxy Statement.

[removed: PART IV][added: PART IV]

[Table of Contents](#if588bc1041b846048fb4bcf624039a26_10)

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| [added: (a)] | [removed: (a] | [removed: )(1)] | [added: (1)] | [added: | |] Financial Statements: | | | | | [added: |]

| | | | | [added: | |] The following Consolidated Financial Statements of Williams-Sonoma, Inc. and subsidiaries and the related notes are filed as part of this [removed: report] [added: Annual Report on Form 10-K] pursuant to Item 8: | | | | | [added: |]

| | | | | | | [removed: PAGE] | | | [added: PAGE | | |]

| | | | | [added: | |] [Consolidated Statements of [removed: Earnings](#tx93631_101)] [added: Earnings](#if588bc1041b846048fb4bcf624039a26_79)] | | | [removed: 46] [added: [36](#if588bc1041b846048fb4bcf624039a26_79)] | | [added: |]

| | | | | [added: | |] [Consolidated Statements of Comprehensive [removed: Income](#tx93631_102)] [added: Income](#if588bc1041b846048fb4bcf624039a26_82)] | | | [removed: 46] [added: [36](#if588bc1041b846048fb4bcf624039a26_82)] | | [added: |]

| | | | | [added: | |] [Consolidated Balance [removed: Sheets](#tx93631_103)] [added: Sheets](#if588bc1041b846048fb4bcf624039a26_85)] | | | [removed: 47] [added: [37](#if588bc1041b846048fb4bcf624039a26_85)] | | [added: |]

| | | | | [added: | |] [Consolidated Statements of Stockholders’ [removed: Equity](#tx93631_104)] [added: Equity](#if588bc1041b846048fb4bcf624039a26_88)] | | | [removed: 48] [added: [38](#if588bc1041b846048fb4bcf624039a26_88)] | | [added: |]

| | | | | [added: | |] [Consolidated Statements of Cash [removed: Flows](#tx93631_105)] [added: Flows](#if588bc1041b846048fb4bcf624039a26_91)] | | | [removed: 49] [added: [39](#if588bc1041b846048fb4bcf624039a26_91)] | | [added: |]

| | | | | [added: | |] [Notes to Consolidated Financial [removed: Statements](#tx93631_106)] [added: Statements](#if588bc1041b846048fb4bcf624039a26_94)] | | | [removed: 50] [added: [40](#if588bc1041b846048fb4bcf624039a26_94)] | | [added: |]

| | | | | [added: | |] [Report of Independent Registered Public Accounting [removed: Firm](#tx93631_107)] [added: Firm](#if588bc1041b846048fb4bcf624039a26_151)] | | | [removed: 69] [added: [56](#if588bc1041b846048fb4bcf624039a26_151)] | | [added: |]

| [added: (a)] | [removed: (a] | [removed: )(2)] | [added: (2)] | [added: | |] Financial Statement Schedules: Schedules have been omitted because they are not required, are not applicable, or because the required information, where material, is included in the financial statements, notes, or supplementary financial information. | | | | | [added: |]

| [added: (a)] | [removed: (a] | [removed: )(3)] | [added: (3)] | [added: | |] Exhibits: The exhibits listed in the below Exhibit Index are filed or incorporated by reference as part of this [added: Annual Report on] Form 10-K | | | | | [added: |]

| [added: (b)] | [removed: (b] | [removed: )] | | [added: | |] Exhibits: The exhibits listed in the below Exhibit Index are filed or incorporated by reference as part of this [added: Annual Report on] Form 10-K | | | | | [added: |]

| [added: (c)] | [removed: (c] | [removed: )] | | [added: | |] Financial Statement Schedules: Schedules have been omitted because they are not required or are not applicable. | | | | | [added: |]

[removed: Exhibit Index][added: Exhibit Index]

| [removed: | CERTIFICATE] [added: CERTIFICATE] OF INCORPORATION AND [removed: BYLAWS] [added: BYLAWS] | | | | [added: | |]

| [removed: |] 3.1 | | | [Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed with the Commission on May 25, 2011, File No. [removed: 001-14077)](http://www.sec.gov/Archives/edgar/data/719955/000119312511150431/dex31.htm)] [added: 001-14077)](https://www.sec.gov/Archives/edgar/data/719955/000119312511150431/dex31.htm)] | [added: | |]

| [removed: |] 3.2 | | | [Amended and Restated Bylaws of Williams-Sonoma, Inc., effective June 3, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K as filed with the Commission on June 9, 2020, File No. [removed: 001-14077)](http://www.sec.gov/Archives/edgar/data/719955/000119312520164672/d887906dex31.htm)] [added: 001-14077)](https://www.sec.gov/Archives/edgar/data/719955/000119312520164672/d887906dex31.htm)] | [added: | |]

| [removed: | INSTRUMENTS] [added: INSTRUMENTS] DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING [removed: INDENTURES] [added: INDENTURES] | | | | [added: | |]

| [removed: |] 4.1 | | | [removed: [Form] [added: [Description] of [removed: Common Stock Certificate] [added: Registrant’s Securities] (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to the Company’s [removed: Current] [added: Annual] Report on Form [removed: 8-K] [added: 10-K for the fiscal year ended February 2, 2020] as filed with the Commission on [removed: May 25, 2011,] [added: March 27, 2020,] File No. [removed: 001-14077)](http://www.sec.gov/Archives/edgar/data/719955/000119312511150431/dex41.htm)] [added: 001-14077)](https://www.sec.gov/Archives/edgar/data/719955/000119312520088937/d856872dex42.htm)] | [added: | |]

| [removed: | 4.2] [added: 10.7+] | | | [removed: [Description of Registrant’s Securities] [added: [Williams-Sonoma, Inc. Pre-2005 Executive Deferral Plan] (incorporated by reference to Exhibit [removed: 4.2] [added: 10.40] to the Company’s Annual Report on Form 10-K for the fiscal year ended February [removed: 2, 2020] [added: 1, 2009] as filed with the Commission on [removed: March 27, 2020,] [added: April 2, 2009,] File No. [removed: 001-14077)](http://www.sec.gov/Archives/edgar/data/719955/000119312520088937/d856872dex42.htm)] [added: 001-14077)](https://www.sec.gov/Archives/edgar/data/719955/000119312509071708/dex1040.htm)] | [added: | |]

| [added: FINANCING AGREEMENTS] | [removed: FINANCING AGREEMENTS] | | | | [added: |]

| [removed: |] 10.1 | | | [removed: [Seventh Amended] [added: [Eighth](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [Amended] and Restated Credit Agreement, [removed: dated January 8, 2018, between] [added: dated](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [September 30, 2021,](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [between] the Company and Bank of America, N.A., as administrative agent, letter of credit issuer and swingline lender, Wells Fargo Bank, National Association, as syndication agent and the lenders party thereto (incorporated by reference to [removed: Exhibit 10.1 to] [added: Exhibit](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [10.4](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [to] the [removed: Company’s Annual Report] [added: Company’s](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [Quarterly](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [Report] on [removed: Form 10-K for the fiscal year ended January 28, 2018 as] [added: Form](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [10-Q](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [for the](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [period](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [ended](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [October 31, 2021](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [as] filed with the Commission [removed: on March 29, 2018, File No. 001-14077)](http://www.sec.gov/Archives/edgar/data/719955/000119312518102232/d689546dex101.htm)] [added: on](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [December 6, 2021,](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [File No.](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm) [001-14077](https://www.sec.gov/Archives/edgar/data/0000719955/000162828021024590/exhibit104-credit_agreemen.htm)] | [added: | |]