Williams-Sonoma, Inc. reports strong results for the first quarter of 2019

Comparable brand revenue growth of 3.5%
GAAP operating
margin of 6.0%; Non-GAAP operating margin expansion of 70bps to 7.0%
GAAP
diluted EPS of $0.66; Non-GAAP diluted EPS of $0.81, or a 21% increase
over Q1 18
Raises fiscal year 2019 EPS guidance

SAN FRANCISCO–(BUSINESS WIRE)–Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for
the first fiscal quarter (“Q1 19”) ended May 5, 2019 versus the first
fiscal quarter (“Q1 18”) ended April 29, 2018.

Laura Alber, President and Chief Executive Officer, commented,
“We have had a strong start to 2019 with comparable revenue growth of
3.5%, operating margin expansion and significant EPS growth. Customer
acquisition and engagement continued to grow as we delivered more
compelling and differentiated experiences to our customers. We also
reached a significant milestone for our company as we were named, for
the first time, to the Fortune 500 largest companies in the U.S. This
accomplishment speaks to the hard work and dedication of all our
associates, the ongoing support of our loyal customers and the power of
our highly differentiated platform in driving long-term, profitable
growth.”

Alber continued, “Given our strong start to the year and the strength we
are seeing early in the second quarter, we are raising our full-year EPS
guidance by $0.05. We believe we are uniquely positioned to capture the
significant opportunities we see in the home furnishings industry, and
we will continue to build on our strong momentum to achieve our goal of
maximizing growth and maintaining high profitability.”

FIRST QUARTER 2019

• Net revenue growth of 3.2% to $1.241 billion
• Comparable brand revenue growth of 3.5%, including double-digit
  comparable growth for West Elm
• GAAP operating margin of 6.0%; non-GAAP operating margin expansion of
  70bps to 7.0%
• GAAP diluted EPS of $0.66; non-GAAP diluted EPS $0.81, a 21% increase
  compared to Q1 18

GUIDANCE

• Raises fiscal year 2019 EPS guidance and reiterates long-term
  financial targets

Fiscal Year 2019*

• Total Net Revenues: $5.670 billion – $5.840 billion
• Comparable Brand Revenue Growth: 2% – 5%
• Non-GAAP Operating Margin: In-line with FY 18
• Non-GAAP Diluted EPS: $4.55 – $4.75
• Non-GAAP Income Tax Rate: 23% – 24%
• Depreciation and Amortization: $185 million – $195 million
• Net 30 store closures for a total store count of 595 by the end of FY19
• Capital Spending: $200 million – $220 million
• Return to Shareholders: quarterly cash dividend of $0.48 per share and
  incremental share buybacks under our multi-year share repurchase
  authorization of approximately $678 million.

Long-Term Financial Targets*

• Total Net Revenues growth of mid to high single digits
• Non-GAAP Operating Income growth in-line with revenue growth, driving
  Operating Margin stability
• Above-industry average ROIC

*We have not provided a reconciliation of non-GAAP guidance measures to
the corresponding GAAP measures on a forward-looking basis due to the
potential variability and limited visibility of excluded items.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, May 30,
2019, at 2:00 P.M. (PT). The call, hosted by Laura Alber, President and
Chief Executive Officer, will be open to the general public via live
webcast and can be accessed at http://ir.williams-sonomainc.com/events.
A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.

SEC REGULATION G — NON-GAAP INFORMATION

This press release includes non-GAAP financial measures. Exhibit 1
provides reconciliations of these non-GAAP financial measures to the
most comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in the U.S.
(“GAAP”). We have not provided a reconciliation of non-GAAP guidance
measures to the corresponding GAAP measures on a forward-looking basis
due to the potential variability and limited visibility of excluded
items; these excluded items include estimates related to the operations
of Outward, Inc. and employment-related expense. We believe that these
non-GAAP financial measures, when reviewed in conjunction with GAAP
financial measures, can provide meaningful supplemental information for
investors regarding the performance of our business and facilitate a
meaningful evaluation of current period performance on a comparable
basis with prior periods. Our management uses these non-GAAP financial
measures in order to have comparable financial results to analyze
changes in our underlying business from quarter to quarter. In addition,
certain other items may be excluded from non-GAAP financial measures
when the company believes this provides greater clarity to management
and investors. These non-GAAP financial measures should be considered as
a supplement to, and not as a substitute for or superior to the GAAP
financial measures presented in this press release and our financial
statements and other publicly filed reports. Non-GAAP measures as
presented herein may not be comparable to similarly titled measures used
by other companies.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements that involve
risks and uncertainties, as well as assumptions that, if they do not
fully materialize or are proven incorrect, could cause our results to
differ materially from those expressed or implied by such
forward-looking statements. Such forward-looking statements include
statements relating to: our ability to capture significant opportunities
in the home furnishings industry; our ability to continue to improve
performance; our focus on operational excellence; our ability to improve
customers’ experience; our optimism about the future; our ability to
maximize growth and maintain high profitability; our FY 2019 and
long-term financial guidance; our stock repurchase program and dividend
expectations; and our proposed store openings and closures.

The risks and uncertainties that could cause our results to differ
materially from those expressed or implied by such forward-looking
statements include: continuing changes in general economic conditions,
and the impact on consumer confidence and consumer spending; new
interpretations of or changes to current accounting rules; our ability
to anticipate consumer preferences and buying trends; dependence on
timely introduction and customer acceptance of our merchandise; changes
in consumer spending based on weather, political, competitive and other
conditions beyond our control; delays in store openings; competition
from companies with concepts or products similar to ours; timely and
effective sourcing of merchandise from our foreign and domestic vendors
and delivery of merchandise through our supply chain to our stores and
customers; effective inventory management; our ability to manage
customer returns; successful catalog management, including timing,
sizing and merchandising; uncertainties in e-marketing, infrastructure
and regulation; multi-channel and multi-brand complexities; our ability
to introduce new brands and brand extensions; challenges associated with
our increasing global presence; dependence on external funding sources
for operating capital; disruptions in the financial markets; our ability
to control employment, occupancy and other operating costs; our ability
to improve our systems and processes; changes to our information
technology infrastructure; general political, economic and market
conditions and events, including war, conflict or acts of terrorism; the
impact of current and potential future tariffs and our ability to
mitigate impacts; and other risks and uncertainties described more fully
in our public announcements, reports to stockholders and other documents
filed with or furnished to the SEC, including our Annual Report on Form
10-K for the fiscal year ended February 3, 2019 and all subsequent
quarterly reports on Form 10-Q and current reports on Form 8-K. All
forward-looking statements in this press release are based on
information available to us as of the date hereof, and we assume no
obligation to update these forward-looking statements.

ABOUT WILLIAMS-SONOMA, INC.

Williams-Sonoma, Inc. is a specialty retailer of high-quality products
for the home. These products, representing distinct merchandise
strategies — Williams Sonoma, Pottery Barn, Pottery Barn Kids, West Elm,
Pottery Barn Teen, Williams Sonoma Home, Rejuvenation, and Mark and
Graham — are marketed through e-commerce websites, direct-mail catalogs
and retail stores. 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 and South Korea, as well as e-commerce websites in certain
locations. In 2017, we acquired Outward, Inc., a 3-D imaging and
augmented reality platform for the home furnishings and décor industry.

SEC Regulation G – Non-GAAP Information

These tables include non-GAAP gross profit, selling, general and
administrative expense, operating income, operating margin, income
taxes, effective tax rate and diluted EPS. We believe that these
non-GAAP financial measures provide meaningful supplemental information
for investors regarding the performance of our business and facilitate a
meaningful evaluation of our quarterly actual results on a comparable
basis with prior periods. Our management uses these non-GAAP financial
measures in order to have comparable financial results to analyze
changes in our underlying business from quarter to quarter. These
non-GAAP financial measures should be considered as a supplement to, and
not as a substitute for, or superior to, financial measures calculated
in accordance with GAAP.

Notes to Exhibit 1:

Contacts

WILLIAMS-SONOMA, INC.
Julie Whalen, 415-616-8524
EVP, Chief
Financial Officer
-or-
Elise Wang, 415-616-8571
VP,
Investor Relations