WSMWilliams-Sonoma, Inc.

On page 35 you disclose decreased revenue in fiscal 2024 for Pottery Barn was due in part to your strategy to reduce promotional activity, whereas on page 40 you disclose increased SG&A in fiscal 2024 was in part due to an increase in advertising expenses. Please reconcile these disclosures for us and revise your disclosures as appropriate.

The Company acknowledges the Staff’s comment and would like to provide additional context regarding the use of the term “promotional activity.” In the retail industry, this phrase typically refers to selling products at a discounted price rather than to advertising expenses.

Therefore, it is possible that during a fiscal year, like fiscal 2024, one of the Company’s brands can both reduce promotional activity (meaning fewer sales made at a discounted price) and increase advertising expenses (spending more on marketing). The Company believes its disclosures are appropriate. Read in the reply ↗

It appears the increase of $82.8 million in cash paid for income taxes, net of refunds, in fiscal 2024 compared to fiscal 2023 is a material item that is not disclosed as a factor in your analysis of changes in operating cash flows. Please discuss all material usages of cash as appropriate. Refer to Item 303(a) and (b) of Regulation S-K.

Rest of the question

Additionally, quantify each variance factor cited in annual and interim period reports. Exhibit 99.1

The Company acknowledges the Staff’s comment and, in future filings, to the extent cash paid for income taxes, net of refunds, is determined to be a material factor in the changes in operating cash flows, the Company will disclose such factor in its analysis of changes in operating cash flows. Additionally, in future filings, the Company will quantify the variance for any material factor cited. Read in the reply ↗

You make adjustments to both the numerator and denominator in your calculation of Return on Invested Capital. As it appears your calculation is not that as typically calculated, it appears you should qualify the label of the measure as "adjusted" or some other appropriate description.

Rest of the question

Also, please explain the purpose and basis for all adjustments made and disclose what the measure is intended to represent and why your measure provides useful information to investors. Lastly, present this measure calculated using the most directly comparable GAAP measures. Refer to Item 10(e)(1)(i) of Regulation S-K and the third bullet under Question 102.10(a) and by analogy to Questions 102.02 and 103.01 of the Staff's Compliance and Disclosure Interpretations on Non-GAAP Financial Measures.

The Company acknowledges the Staff's comment and confirms that, in future filings, it will refer to this ratio as “Adjusted Return on Invested Capital” (Adjusted ROIC), and disclose what the measure is intended to represent and why the Company believes the measure provides useful information to investors. Additionally, we will explain the purpose and basis for all adjustments made in the calculation of Adjusted ROIC with footnote disclosure.

Rest of the answer

We will also present the ratio using the most directly comparable GAAP measures and refer to it as “Return on Invested Capital” (ROIC).

An example of the intended future disclosure of ROIC and Adjusted ROIC based on an illustrative revision of the actual disclosure in Exhibit 99.1 to the Company’s Form 8-K furnished on March 19, 2025 is presented below.

Adjusted Return on Invested Capital (“Adjusted ROIC”)

We believe that Adjusted ROIC is a useful financial ratio for investors in evaluating the efficiency and effectiveness of the capital we have invested in our business to generate returns over time. Our Adjusted ROIC calculation excludes certain items that we do not consider representative of our operating performance.

Adjusted ROIC is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for net earnings, total assets or other GAAP financial measures. Our method of calculating a non-GAAP financial ratio may differ from other companies’ methods and therefore may not be comparable to those used by other companies. We also present the financial ratio calculated using the most directly comparable GAAP measures and refer to this as Return on Invested Capital (“ROIC”). The following tables reconcile ROIC to Adjusted ROIC:

Numerator (using the most directly comparable GAAP measures):

For the Fiscal Year Ended

(In thousands) February 2, 2025 January 28, 2024

Operating income

$ 1,430,184 $ 1,244,193

Income tax 1

(347,535) (316,025)

Operating income after tax $ 1,082,649 $ 928,168

1Reflects a hypothetical provision for income taxes on operating income, using the Company's effective tax rates of 24.3% for fiscal 2024 and 25.4% for fiscal 2023.

Numerator (adjusted):

Out-of-period Freight Adjustment 1

(48,972) —

Exit Costs 2

— 17,931

Reduction-in-force Initiatives 3

— 8,316

Operating lease costs 4

299,105 296,779

Income tax adjustment 5

(408,317) (398,074)

Adjusted operating income after tax $ 1,272,000 $ 1,169,145

1During Q1 2024, we determined that we over-recognized freight expense in fiscal 2021, 2022 and 2023. Therefore, we recorded an out-of-period adjustment to reduce cost of goods sold. We believe this is not related to the operations of fiscal 2024.

2During Q1 2023, we incurred exit costs of $17.9 million, including $9.3 million associated with the closure of our West Coast manufacturing facility and $8.6 million associated with the exiting of Aperture, a division of our Outward, Inc. subsidiary.

3During Q1 2023, we incurred costs related to reduction-in-force initiatives of $8.3 million primarily in our corporate functions.

4We adjust for operating lease costs to align with the metrics we use to determine certain components of management compensation.

5Adjustment reflects a hypothetical provision for income taxes using the Company's effective tax rates of 24.3% for fiscal 2024 and 25.4% for fiscal 2023.

Denominator:

As of

(In thousands)

February 2, 2025 January 28, 2024 January 29, 2023

Total assets

$ 5,301,607 $ 5,273,548 $ 4,663,016

Total current liabilities

(1,911,974) (1,880,315) (1,636,451)

Cash in excess of $200 million

(1,012,977) (1,062,007) (167,344)

Read in the reply ↗

Please revise your disclosure to include discussion of how your operations are impacted by the differing sales channels on which your products are offered. In this regard, we note your disclosure on page 13 that your “e-commerce channel has been [y]our fastestgrowing business over the last several years.” We also noted, you present retail store data which shows a decline in retail stores year over year with an

Rest of the question

overall increase to your net revenues. To the extent results and trends are not materially consistent across all sales channels, please quantify in dollars and/or percentage change the impact each sales channel had and is expected to have on your results of operations. Refer to Item 303 of Regulation S-K.

Williams-Sonoma, Inc. is an omni-channel retailer selling products through its portfolio of brands, including Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, and GreenRow. We focus our efforts on meeting the demands of customers where they are, whether that be physically in a retail store, on their tablets at home, on their mobile phone while traveling, or on the phone with our customer care center.

Rest of the answer

Sometimes a customer who is physically in our store may purchase product through our e-commerce channel due to inventory availability or a made-to-order custom upholstery selection. And conversely, a customer exploring our assortment online may travel to a store to view the product, seek our in-house design services, or pick-up an order they processed online. Advances in technology, along with our omni-channel approach to the customer experience and inventory management, have “blurred the lines” between the traditional sales channels of brick-and-mortar retail stores and e-commerce platforms.

Given the increasingly indistinguishable delineation between sales channels, we disclose comparable brand revenues, which include both (i) e-commerce net sales and shipping fees, and (ii) comparable store net sales. Because we run our business by brand, and do not separate our on-hand inventory or open-to-buy inventory purchases by sales channel, we are indifferent as to the channel of the customer purchase. We plan our business to be in a position to fulfill the customer’s order in a manner that best suits the customer. Therefore, the change in comparable brand revenue is how we internally measure the health of our business, and we believe it is the most useful and relevant metric an investor has in assessing our top-line performance.

When preparing our filings, we considered Item 303 of Regulation S-K and Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations, which requires management to provide information that is material to assist in understanding the business, including the results of operations and trends. We believe our discussion of the performance of our brands, along with details on certain category and product performance, provides the reader with the material drivers of our revenue growth or decline.

However, in future filings, to the extent that the change in e-commerce net sales or comparable store net sales is materially different, we will disclose our e-commerce sales in dollars and our e-commerce percentage change in sales versus the prior period within Management’s Discussion and Analysis of Financial Condition. We will continue to disclose the e-commerce percentage of total revenues, which currently provides the reader an indication of the e-commerce channel’s contribution to comparable brand revenue. We will continue to endeavor to provide meaningful disclosures that meet the objectives of Management’s Discussion and Analysis of Financial Condition, and will make disclosures of material trends, economic or industry-wide factors, opportunities, challenges and risks of which we become aware in our future filings.

Read in the reply ↗

Please tell us your consideration of the guidance in the answer to Question 102.10 of the Non-GAAP Financial Measures section of our Compliance Disclosure and Interpretations related to your presentation of full non-GAAP income statements.

In response to the Staff’s comment, the Company respectfully advises the Staff that it had not previously considered the non-GAAP reconciliations on page 8 to be a full non-GAAP income statement, as the reconciliations do not include certain line items from the Company’s GAAP income statement. However, the Company acknowledges the Staff’s comment and will revise its disclosure accordingly going forward to ensure that future non-GAAP reconciliations in the Company’s earnings releases do not constitute a full non-GAAP income statement.

Rest of the answer

Attached please find an example of how the Company intends to present future non-GAAP reconciliations, using Q4 2018 numbers for illustrative purposes.

Attn:

Page

Should the Staff have any additional comments or questions, please contact me at (415) 616-8524 or David King at (415) 616-8478. The Company respectfully requests that the Staff confirm that it has no additional requests or comments when the Staff’s review is complete.

Read in the reply ↗

We note your discussions of changes in net revenues, e-commerce net revenues, retail net revenues and other data, cost of goods sold and selling, general and administrative expenses during each year presented. Please revise future filings to quantify the impact of price and volume changes on net sales as well as the other factors you identify as impacting such revenues and expenses.

Rest of the question

For example, you should quantify to the extent practicable the increase in your international operations and the loss of the additional week of revenues in fiscal 2012 on retail net revenues and lower selling margins and increases in occupancy costs on costs of goods sold as a percentage of revenue. In addition, please include a discussion of the factors causing the changes.

In response to the Staff’s comment, we advise the Staff that as disclosed on page 26 of our Form 10-K for the year ended February 1,

2015, our practice is to discuss factors affecting year-over-year changes within our MD&A in their order of magnitude in order to provide the reader with an understanding of the importance of each driver.

Rest of the answer

In future filings, we will continue to disclose the primary factors affecting our results of operations on a qualitative basis in the order of quantitative significance, and, as requested, will provide additional details around the material drivers of the changes in our net revenues, cost of goods sold and selling, general and administrative expenses, including quantifying such factors where meaningful.

An example

(using our Net Revenues disclosure on page 27 of our Form 10-K for the year ended February 1, 2015) of how our disclosure may be presented in future filings is as follows:

Net revenues in fiscal 2014 increased by $310,830,000, or 7.1%, compared to fiscal 2013, with comparable brand revenue growth of 7.1%. The increase in net revenues was driven by a 12.1% increase in our e-commerce net revenues and a 2.4% increase in our retail net revenues. These revenue increases were primarily due to a higher mix of furniture sales which have higher average unit prices, 16 net new stores, and a 9% increase in our foreign revenues. By Brand, our revenue growth was primarily driven by the West Elm and Pottery Barn brands.

Read in the reply ↗

Please tell us what consideration you gave to describing any known trends or uncertainties that have had or that you reasonably expect will have a material favorable or unfavorable impact on net revenues or income from continuing operations. For example, please include a discussion of the trends in same store sales, selling margins and occupancy costs and advertising efficiency.

Rest of the question

Please refer to Item 303(a) of Regulation S- K.

In response to the Staff’s comment, we advise the Staff that in determining whether or not to disclose a known trend, we applied the guidance in SEC FRM 9220.11, including assessing the materiality of the trend on our overall financial statements, as well as such factors as market conditions and the long or short term nature of such trends.

Rest of the answer

Based on these factors, we respectfully advise the Staff that we did not identify known trends or uncertainties that we believed had occurred or were likely to occur or that we believed would have a material favorable or unfavorable impact on our net revenues or income from continuing operations.

We review our historical and projected results for all of our key metrics on a continual basis, including comparable store sales, selling margins, occupancy costs and advertising efficiency. The retail business is inherently unpredictable and our management team makes decisions impacting revenues and expenses on a daily basis based on sales and operational information. Due to this, the results of these metrics fluctuate during any one period and from period to period and are therefore difficult to predict or to identify any known trends.

We also respectfully point the Staff to the section titled “Competition and Seasonality” on page 5 of our Form 10-K for the year ended February 1, 2015, in which we remind the reader of the seasonality of our business and the impact on revenues as well as employee and catalog costs.

We will continue to evaluate material trends on our business and will disclose any additional material known trends in future filings, as applicable.

Read in the reply ↗

We note your disclosure of “selling square footage” and “LSF” metrics on page 28. We also note the disclosure of such metrics in your press releases. Please tell us your consideration of disclosing how these metrics correlate to your results of operations and discussing their limitations.

In response to the Staff’s comment, we advise the Staff that we have historically provided selling square footage and leased square footage within our public filings in order to provide the reader with additional data points, including productivity metrics, on our retail business and occupancy costs. For example, we would expect an increase in our selling or leased square footage to correspond to an increase in our net revenues and/or occupancy costs.

Rest of the answer

However, this metric cannot be solely relied upon because changes in our selling and leased square footage may not be the key driver and/or may be only one of several drivers of the changes in our business. Other key drivers of net revenues and occupancy costs include price changes, changes in our comparative store sales, rent increases, depreciation of our capital expenditures, etc. In future filings, where selling and/or leased square footage changes are significant drivers of the changes in our results, we will disclose the correlation of such metrics.

Read in the reply ↗

Please tell us the amount of breakage recognized for each year presented and how the breakage is classified in your financial statements. If material, please disclose the amount of breakage recognized in future filings. Please also disclose whether your gift cards have expiration dates.

In response to the Staff’s comment, we advise the Staff that the amount of breakage recognized from unredeemed gift cards by the Company, for each year presented is:

Fiscal 2014

Fiscal 2013

Fiscal 2012

$9,491,000

$8,421,000

$9,487,000

This income, which we do not consider to be material to our consolidated financial statements, is recorded in other income within selling, general and administrative expenses. Our gift cards do not have expiration dates and we will revise future filings to disclose this.

Rest of the answer

For example, we will revise our disclosure as follows, with new language indicated by underlined text.

Customer Deposits

Customer deposits are primarily comprised of unredeemed gift cards and merchandise credits and deferred revenue related to undelivered merchandise. We maintain a liability for unredeemed gift cards and merchandise credits until the earlier of redemption, escheatment or four years as we have concluded that the likelihood of our gift cards being redeemed beyond four years from the date of issuance is remote. Income from unredeemed gift cards and merchandise credits, which is recorded in other income within selling, general and administrative expense is not material to our consolidated financial statements. Our gift cards and merchandise credits have no expiration dates.

Read in the reply ↗

We note that you have multi-year franchise agreements with third parties in the Middle East, Philippines and Mexico. Please tell us the terms of your franchise agreements and your revenue recognition policy for franchise revenues, including any initial fees paid by franchisees. Please also tell us the significance of franchise fees and product sales to franchisees for each year presented.

In response to the Staff’s comment, we advise the Staff that the terms of our franchise agreements generally include product sales (cost plus a mark-up), as well as royalty fees dependent on the market. No initial fees have been received from the franchisees.

Revenues for merchandise sales are recognized upon the transfer of merchandise title from the Company to the franchisee when all other criteria for revenue recognition set forth in ASC 605 has been met.

Rest of the answer

Royalty revenues are recognized based on a percentage of the franchisees actual sales.

We advise the Staff that total foreign revenues, which include product sales and any applicable royalty fees from our franchise operations, are less than 5% of our total net revenues and are not material to our consolidated financial statements for each of the three years presented. We respectfully direct the Staff to the disclosure set forth in Note 1 to the table presented in Note L of our Form 10-K for the year ending February 1, 2015, “Segment Reporting”, which states that our total fiscal

2014, 2013 and 2012 foreign net revenues include approximately $235.8 million (or 5.0% of total net revenues), $215.5 million (or 4.9% of total net revenues), and $166.6 million (or 4.1% of total net revenues) related to our foreign operations.

Read in the reply ↗

Please disclose the changes in the accumulated balance of foreign currency translation adjustments. Please refer to ASC 220-10-45-14A.

In response to the Staff’s comment, although we do not believe these amounts are material, we will disclose the accumulated balance of foreign currency translation adjustments within our future filings. Had we disclosed this information within the notes to our Form 10-K for the fiscal year ended February 1, 2015, it would have been presented as follows:

In thousands

Foreign Currency

Translation

Cash Flow Hedges

Accumulated Other

Comprehensive

Income

Balance at January 29, 2012

$

12,590

—

Foreign currency translation adjustments, net of tax

1,043

Balance at February 3,

Rest of the answer

2013

13,633

(7,850

)

Change in fair value of derivative financial instruments, net of tax

870

Reclassification adjustment for realized gains on derivative financial instruments, net of tax 1

(129

Other comprehensive income (loss), net

741

(7,109

Balance at February 2, 2014

5,783

6,524

(9,305

806

(573

233

(9,072

Balance at February 1, 2015

(3,522

974

(2,548

Refer to Note M to the Consolidated Financial Statements for additional disclosures about reclassifications out of accumulated other comprehensive income and their corresponding effects on the respective line items in the Consolidated Statements of Earnings.

Read in the reply ↗

We note your disclosure that you have retail and e-commerce businesses in Canada, Australia and the United Kingdom, and operations throughout Asia and Europe. Please tell us your consideration of providing the disclosure required by to ASC 280-10-50-41.

In response to the Staff’s comment, we respectfully advise the Staff that we have considered the guidance in ASC 280-10-50-41 which requires that revenues and long-lived assets attributed to an individual foreign country be disclosed separately, if material. We advise the Staff that neither revenues nor long-lived assets attributed to an individual foreign country is material to our consolidated financial statements.

Rest of the answer

We respectfully direct the Staff’s attention to the disclosure set forth in Note 1 to the table presented in Note L of our Form 10-K for the year ending February 1, 2015, “Segment Reporting”, which states that our total net revenues for fiscal 2014 include approximately $235.8 million (or 5.0% of total net revenues) and our total assets as of

February 1, 2015, include approximately $58.3 million (or 2.5% of total assets), related to our foreign operations. There are several separate foreign jurisdictions included within these figures, none of which is individually material to our consolidated financial statements. Accordingly, we do not believe that separate disclosure within our consolidated financial statements is required.

* * *

The Company advises the Staff that it is aware of and acknowledges the following:

•

The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should the Staff have any additional comments or questions, please contact me at (415) 616–8524. The Company respectfully requests that the Staff confirm that it has no additional requests or comments when the Staff’s review is complete.

Read in the reply ↗