Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Williams-Sonoma Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Net earnings	949,762)	1,127,904)	1,126,337)	680,714)	356,062)	333,684)
Depreciation and amortization	232,590)	214,153)	196,087)	188,655)	187,759)	188,808)
Loss on disposal/impairment of assets	21,869)	25,116)	1,015)	32,365)	1,755)	10,209)
Non-cash lease expense	255,286)	231,350)	216,888)	216,368)	215,810)	—)
Deferred income taxes	(29,085)	(23,823)	2,535)	(13,061)	(2,557)	23,639)
Stock-based compensation expense	84,754)	90,268)	95,240)	73,185)	64,163)	59,802)
Other	(2,796)	(2,339)	(3,994)	(6,047)	(7,740)	(26,778)
Accounts receivable	(7,461)	15,687)	11,896)	(31,503)	(5,034)	(15,329)
Merchandise inventories	209,168)	(208,908)	(239,981)	99,144)	24,219)	(70,331)
Prepaid expenses and other assets	1,016)	(11,823)	(2,060)	(16,388)	(3,189)	(54,691)
Accounts payable	99,043)	(113,521)	56,674)	25,489)	(11,051)	62,377)
Accrued expenses and other liabilities	4,935)	(61,995)	49,460)	129,142)	13,259)	45,976)
Gift card and other deferred revenue	95,005)	31,839)	75,460)	82,841)	(640)	38,899)
Deferred rent and lease incentives	—)	—)	—)	—)	—)	24,929)
Operating lease liabilities	(269,162)	(242,855)	(224,567)	(232,989)	(226,257)	—)
Income taxes payable	35,349)	(18,231)	10,157)	46,933)	735)	(35,208)
Changes in operating assets and liabilities	167,893)	(609,807)	(262,961)	102,669)	(207,958)	(3,378)
Adjustments to reconcile net earnings to net cash provided by operating activities	730,511)	(75,082)	244,810)	594,134)	251,232)	252,302)
Net cash provided by operating activities	1,680,273)	1,052,822)	1,371,147)	1,274,848)	607,294)	585,986)
Purchases of property and equipment	(188,458)	(354,117)	(226,517)	(169,513)	(186,276)	(190,102)
Other	201)	162)	270)	629)	728)	2,203)
Net cash used in investing activities	(188,257)	(353,955)	(226,247)	(168,884)	(185,548)	(187,899)
Repurchases of common stock	(313,001)	(880,038)	(899,433)	(150,000)	(148,834)	(295,304)
Payment of dividends	(232,475)	(217,345)	(187,539)	(157,645)	(150,640)	(140,325)
Tax withholdings related to stock-based awards	(52,831)	(81,290)	(104,235)	(31,729)	(27,752)	(14,437)
Repayment of long-term debt	—)	—)	(300,000)	—)	—)	—)
Debt issuance costs	—)	—)	(778)	(3,645)	—)	—)
Borrowings under revolving line of credit	—)	—)	—)	487,823)	100,000)	60,000)
Repayments under the revolving line of credit	—)	—)	—)	(487,823)	(100,000)	(60,000)
Net cash used in financing activities	(598,307)	(1,178,673)	(1,491,985)	(343,019)	(327,226)	(450,066)
Effect of exchange rates on cash and cash equivalents	954)	(3,188)	(2,914)	5,230)	(1,312)	797)
Net increase (decrease) in cash and cash equivalents	894,663)	(482,994)	(349,999)	768,175)	93,208)	(51,182)
Cash and cash equivalents at beginning of year	367,344)	850,338)	1,200,337)	432,162)	338,954)	390,136)
Cash and cash equivalents at end of year	1,262,007)	367,344)	850,338)	1,200,337)	432,162)	338,954)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

Net Earnings: Net earnings demonstrated a strong upward trend from 2019 to 2022, nearly tripling from approximately $334 million to over $1.12 billion. However, in 2024, there was a decline to approximately $950 million, indicating a potential profitability challenge despite remaining at a high level.
Depreciation and Amortization: This expense increased steadily over the period, rising from about $189 million in 2019 to approximately $233 million in 2024, reflecting ongoing investment in capital assets and possibly aging asset base requiring sustained depreciation.
Loss on Disposal/Impairment of Assets: Losses fluctuated significantly, with sharp spikes in 2021 and 2023 reaching over $25 million. Such variability suggests episodic asset write-downs potentially linked to strategic realignments or asset portfolio adjustments.
Non-Cash Lease Expense: Starting from 2020, this item showed a gradual increase from roughly $216 million to $255 million by 2024, highlighting growing lease-related expenses likely connected to expanding or renewing lease agreements.
Deferred Income Taxes: The deferred tax position was quite volatile, moving between positive and negative values over the periods, with a net negative position in recent years. This instability may point to fluctuations in taxable income recognition or changes in tax regulations impacting the company’s tax liabilities.
Stock-Based Compensation Expense: There was a consistent increase from 2019 to 2022, peaking at around $95 million before declining slightly towards 2024. This trend reflects a rising cost of incentivizing employees through equity awards, stabilizing more recently.
Working Capital Changes: Significant fluctuations in working capital items were observed, including a notable increase in accounts payable and accrued expenses, as well as high volatility in merchandise inventories and accounts receivable. The large swings in these accounts indicate dynamic operational activities and inventory management adjustments affecting cash flow.
Operating Activities: Net cash provided by operating activities showed strong growth through 2021 and 2022, peaking at approximately $1.37 billion before decreasing in 2023 and rebounding significantly in 2024 to $1.68 billion. This reflects robust core business cash generation abilities with some year-to-year variability.
Investing Activities: Cash used in investing activities increased notably over time, peaking at around $354 million in 2023. Purchases of property and equipment escalated especially in 2023, indicating substantial capital expenditure efforts, possibly for expansion or modernization.
Financing Activities: Net cash used in financing activities was significantly negative across all years, with the highest outflows in 2022 at nearly $1.5 billion. Repurchases of common stock consistently represented a large use of cash, though buying back activity moderated in 2024. Dividend payments increased gradually, and there were occasional repayments of long-term debt. Borrowings and repayments under revolving credit lines occurred primarily in earlier periods.
Liquidity and Cash Position: Cash and cash equivalents fluctuated considerably. After a substantial increase in 2021, cash levels dropped sharply over the next two years before recovering substantially in 2024 to a record high of $1.26 billion. This pattern suggests active cash management in response to investing and financing cash requirements across periods.
Summary: The financial data reveal a company with strong earnings growth up to 2022, supported by increasing operating cash flows and substantial capital investments. There has been significant volatility in working capital and tax-related accounts, influencing cash flow variability. The company has maintained aggressive stock repurchase programs and increased dividend distributions, financed partially by operational cash generation. Recent signs show some moderation in earnings alongside continuing strong cash inflows, indicating a need for close monitoring of profitability and investment returns moving forward.

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Williams-Sonoma Inc. (NYSE:WSM)

Cash Flow Statement