Williams-sonoma, Inc. · NYSE:WSM
Williams-sonoma — Investor Presentation (September 2015)
29 slides from Williams-sonoma's investor presentation, Sep 15, 2015
Slide 1: Leading Multi-Channel Retail
LEADING MULTI-CHANNEL RETAIL JULIE WHALEN PAT C O N N O L LY Executive Vice President, Director, Executive Vice President, Chief Financial Officer Chief Strategy and Business Development Officer POTTERY BARN POTTERY BARN KIDS PBTEEN WILLIAMS-SONOMA WILLIAMS-SONOMA HOME WEST ELM MARK AND GRAHAM REJUV
Slide 2: Multi-Channel Is the Retail Format of the Future
MULTI -CHANNEL IS THE RETAIL FORMAT OF THE FUTURE 2
Slide 3: Developing Multi-Channel Is a Strategic Imperative
MULTI-CHANNEL IS THE RETAIL FORMAT OF THE FUTURE DEVELOPING MULTI-CHANNEL IS A STRATEGIC IMPERATIVE • ~50% of ecommerce sales go to retailers with physical stores • Brick and mortar retailers control ~95% of total retail sales • Multi-channel customers are the most valuable customers - Shop more fre
Slide 4: Brick & Mortar Retailers Are Committed to Investing in Ecommerce
MULTI-CHANNEL IS THE RETAIL FORMAT OF THE FUTURE BRICK & MORTAR RETAILERS ARE COMMITTED TO INVESTING IN ECOMMERCE SPECIALTY RETAIL CAPEX SHARE 1 DESPITE THE CHALLENGING PATH TO 100% 6% PROFITABILITY… 10% 9% 10% 7% • IT and Distribution share of specialty retail capex has increased 14% 16% 22% 24% 1,
Slide 5: Ecommerce Penetration
STRONG FINANCIAL RETURNS ECOMMERCE PENETRATION ECOMMERCE PENETRATION ACROSS MULTI-CHANNEL RETAILERS 50% 50% 40% 41% % of Ecommerce Penetration 30% 29% 22% 20% 19% 19% 18% 18% 16% 16% 15% 12% 10% 11% 11% 10% 10% 10% 7% 6% 5% 4% 1% 2% 0% TJX LOW* BBBY* HD TIF MW* COH* JCP KORS* KSS* PIR FL GPS ANN* LB
Slide 6: Stores Remain a Vital Component to Retail Success
MULTI-CHANNEL IS THE RETAIL FORMAT OF THE FUTURE STORES REMAIN A VITAL COMPONENT TO RETAIL SUCCESS “BRICK AND MORTAR IS STORES ARE INTEGRAL TO BUILDING EXPERIENCING A RESURGENCE” BRAND AWARENESS AND TRUST –Rick Caruso ECOMMERCE PURE PLAYS ARE “STORES ARE THE NEW BLACK” INCREASINGLY OPENING STORES –S
Slide 7: Leading Multi-Channel Retail
LEADING MULTI-CHANNEL RETAIL 7
Slide 8: WSM Highlights
LEADING MULTI-CHANNEL RETAIL WSM HIGHLIGHTS FY14 NET REVENUES: $4.7Bn WSM’S LEADERSHIP IN MULTI-CHANNEL RETAIL CREATES SIGNIFICANT OPPORTUNITIES TO GROW REVENUES AND EARNINGS • 40+ years experience executing a combined store and direct-to- customer strategy • ~600 highly visible and productive store
Slide 9: Williams-Sonoma, Inc. Leads in Online Experience
LEADING MULTI-CHANNEL RETAIL WILLIAMS-SONOMA, INC. LEADS IN ONLINE EXPERIENCE Wells Fargo and Fluid recently conducted a study looking at the online home furnishings landscape from the consumer experience perspective. Key takeaways: 1. MULTI-CHANNEL BEATS PURE PLAYS • Multi-channel retailers win in
Slide 10: Stella Service Report Key Takeaways
LEADING MULTI-CHANNEL RETAIL STELLA SERVICE REPORT KEY TAKEAWAYS 1. BENCHMARKING CUSTOMER SERVICE • WSM brands compared to the top 25 internet retailers. Stella Services measures the speed and quality of engagement across all channels and consistently finds WSM brands to be top performers 2. SPEED O
Slide 11: Keys to Our Multi-Channel Success
KEYS TO OUR MULTI-CHANNEL SUCCESS Vision + Values _ Executive Team + Organizational Design _ Brand Portfolio with Exclusive Product _ Channel Excellence _ Optimized Supply Chain _ Growth Opportunities 11
Slide 12: Vision + Values
KEYS TO OUR MULTI-CHANNEL SUCCESS VISION + VALUES Our mission is to enhance the quality of our customers’ lives at home PEOPLE FIRST SHAREHOLDERS We believe the potential of our Company has no limit We are committed to providing a superior return to and is driven by our associates and their imaginat
Slide 13: Executive Team & Organizational Design
KEYS TO OUR MULTI-CHANNEL SUCCESS EXECUTIVE TEAM & ORGANIZATIONAL DESIGN • Average tenure of CEO direct reports averages 15 years with the company—multi-channel is part of our corporate DNA • Organizational structure—individual brand authority creates autonomy with accountability • “Shared Service”
Slide 14: Portfolio Approach to Sustainable Growth
KEYS TO OUR MULTI-CHANNEL SUCCESS PORTFOLIO APPROACH TO SUSTAINABLE GROWTH 21 % WILLIAMS-SONOMA $995M 43% POTTERY BARN 32% $2,022M WILLIAMS-SONOMA 42% 14 % POTTERY BARN WES T ELM $669M 7% WEST ELM 6% 3% P BTEEN 5% 13 % $ 2 61 M OTHER 14% PBTEEN POTTERY BARN KIDS $127M POTTERY BARN KIDS $625M FY09 NE
Slide 15: Exclusive Product & Lifestyle Merchandising
KEYS TO OUR MULTI-CHANNEL SUCCESS EXCLUSIVE PRODUCT & LIFESTYLE MERCHANDISING • Our product is what separates us from • Proprietary product and lifestyle others and brings our brands to life merchandising minimizes commodity comparison shopping—brand image • Because we create and design ~90% of and
Slide 16: Ecommerce Excellence
KEYS TO OUR MULTI-CHANNEL SUCCESS ECOMMERCE EXCELLENCE CUSTOMER DATABASE TECHNOLOGY • Comprehensive database of over 58M • State of the art, flexible ecommerce platform households who have bought from all brands shared by all brands and all channels • Agile development environment allows for • Exten
Slide 17: Retail Excellence
KEYS TO OUR MULTI-CHANNEL SUCCESS RETAIL EXCELLENCE ENGAGEMENT AND LOYALTY RELATIONSHIP-BASED RETAIL UNIQUE BRAND EXPERIENCE 17
Slide 18: Optimized Supply Chain
KEYS TO OUR MULTI-CHANNEL SUCCESS OPTIMIZED SUPPLY CHAIN • Supply chain “platform” allows individual brands to benefit from “scale of the whole” - Vertically integrated supply chain eliminates many costs enabling us to deliver great value to customers at attractive margins to WSM • Manufacturing cap
Slide 19: Growth + Margin Drivers
GROWTH + MARGIN DRIVERS 19
Slide 20: Large Addressable Market & Strengthening Customer Demographics
GROWTH + MARGIN DRIVERS LARGE ADDRESSABLE MARKET & STRENGTHENING CUSTOMER DEMOGRAPHICS FRAGMENTED INDUSTRY WITH OPPORTUNITIES FOR CONSOLIDATION 7.0% CAGR ! — U.S. FURNITURE & HOME FURNISHINGS WSM NET REVENUES Revenue Growth STORES SALES at >10x industry $120 $113 $111 0.5% CAGR $5 $4.7 $109 $4.4 $10
Slide 21: Revenue Growth and Margin Improvement Initiatives in Every Brand
GROWTH + MARGIN DRIVERS REVENUE GROWTH AND MARGIN IMPROVEMENT INITIATIVES IN EVERY BRAND NEW BRANDS/WHITE SPACE • One Home Strategy • Customer growth • 19 new stores in 2015 • Leverage customer file and analytics to quickly grow new brands to • Expanded categories and aesthetics • Ecommerce penetrat
Slide 22: Increasing Ecommerce Penetration in Our Category Benefits WSM
GROWTH + MARGIN DRIVERS INCREASING ECOMMERCE PENETRATION IN OUR CATEGORY BENEFITS WSM AS OF Q4 ’14, 21 CONSECUTIVE QUARTERS OF DOUBLE DIGIT ECOMMERCE GROWTH. ECOMMERCE NOW REPRESENTS > 12% OF ‘CORE’ RETAIL SALES IN THE U.S. 70% Projection Media, Sporting, and Hobby Goods 80% 50% Electronics and Appl
Slide 23: Global Expansion Provides Long-Term Growth Opportunities
GROWTH + MARGIN DRIVERS GLOBAL EXPANSION PROVIDES LONG-TERM GROWTH OPPORTUNITIES CANADA AUSTRALIA UNITED KINGDOM • Company-owned model • Company-owned model • Company-owned and • First stores opened in 2001 • First 4 stores opened and wholesale models • 27 stores ecommerce websites launched • West E
Slide 24: Opportunities to Expand Operating Margin
GROWTH + MARGIN DRIVERS OPPORTUNITIES TO EXPAND OPERATING MARGIN Mix Shift to Ecommerce _ Impact of In-Sourcing Foreign Agent Structure _ Marketing Efficiencies _ Global Development _ Leveraging Costs as Businesses Scale 24
Slide 25: Strong Financial Returns
STRONG FINANCIAL RETURNS 25
Slide 26: Financial Overview
STRONG FINANCIAL RETURNS FINANCIAL OVERVIEW NET REVENUES NON-GAAP EARNINGS PER SHARE $4.00 $6,000 $3.35 – $3.45 $3.50 8% CAGR $4,950 - $5,020 13% CAGR $4,800 $3.00 $3.20 $ In Millions $4,699 $2.84 $4,388 $2.50 $3,600 $4,043 $2.58 $3,721 $3,504 $2.00 $2.24 $1.95 $2,400 $1.50 $1.00 $1,200 $0.50 $0 $0.
Slide 27: Balanced Capital Allocation Strategy
STRONG FINANCIAL RETURNS BALANCED CAPITAL ALLOCATION STRATEGY CAPITAL EXPENDITURES RETURNING CASH TO SHAREHOLDERS $325 - $375 $300 $400 $351 $350 $240 $320 $ in Millions $ in Millions $205 $205 $194 $263 $243 $180 $240 $130 $184 $120 $160 $62 $60 $80 $0 $0 2010 2011 2012 2013 2014 2010 2011 2012 201
Slide 28: Comparison of Five Year Cumulative Total Return
STRONG FINANCIAL RETURNS COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN $500 $450 Williams-Sonoma, Inc. +357% $400 $350 $300 S&P Retailing +197% $250 Peer Group +150% $200 NYSE Composite +73% $150 $100 $50 $0 2010 2011 2012 2013 2014 2015 *$100 invested on 1/31/10 in stock or index, including reinv
Slide 29: Leader in Multi-Channel Retail
LEADER IN MULTI-CHANNEL RETAIL Sustainable competitive advantages will drive profitable growth _ Significant opportunities to grow existing brands and develop new brands _ Experienced management team aligned with shareholder interests 29
Williams-Sonoma — Investor Presentation (September 2015) on 6ix