WILLIAMS SONOMA INC MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS (Form 10-Q)

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This Quarterly Report on Form 10-Q 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 business and results
of operations to differ materially from those expressed or implied by such
forward-looking statements. Such forward-looking statements include statements
related to: supply chain challenges; backorder levels and inventory constraints;
the continuing impact of the COVID-19 pandemic on our business, results of
operations and financial condition; our revenue growth; expanding our sales and
operating margin; the impact of inflation and measures to control inflation on
consumer spending; our strategic initiatives; our beliefs regarding customer
behavior and industry trends; our merchandise strategies; our growth strategies
for our brands; our beliefs regarding the resolution of current lawsuits, claims
and proceedings; our stock repurchase program; our expectations regarding our
cash flow hedges and foreign currency risks; our planned use of cash, including
our commitment to continue or increase quarterly dividend payments; our future
compliance with the financial covenants contained in our credit facility; our
belief that our cash on-hand, in addition to our available credit facility, will
provide adequate liquidity for our business operations over the next 12 months;
our beliefs regarding our exposure to foreign currency exchange rate
fluctuations; and our beliefs regarding seasonal patterns associated with our
business, as well as statements of belief and statements of assumptions
underlying any of the foregoing. You can identify these and other
forward-looking statements by the use of words such as "may," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"intends," "potential," "continue," or the negative of such terms, or other
comparable terminology. 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 this document
and our Annual Report on Form 10-K for the year ended January 30, 2022, and the
risks, uncertainties and assumptions discussed from time to time in our other
public filings and public announcements. All forward-looking statements included
in this document are based on information available to us as of the date hereof,
and we assume no obligation to update these forward-looking statements.

OVERVIEW

Williams-Sonoma, Inc. ("Company, "we", or "us") is a specialty retailer of
high-quality sustainable products for the home. Our products in our portfolio of
eight brands - Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn
Teen, West Elm, Williams Sonoma Home, Rejuvenation, and Mark and Graham - are
marketed through e-commerce websites, at our retail stores and through our
direct-mail catalogs. These brands are also part of The Key Rewards, our loyalty
and credit card 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 e-commerce
websites in certain locations. We are also proud to be a leader in our industry
with our Environmental, Social and Governance ("ESG") efforts.

The following discussion and analysis of financial condition, results of
operations, and liquidity and capital resources for the thirteen weeks ended
May 1, 2022 ("first quarter of fiscal 2022"), as compared to the thirteen weeks
ended May 2, 2021 ("first quarter of fiscal 2021"), should be read in
conjunction with our Condensed Consolidated Financial Statements and the notes
thereto. All explanations of changes in operational results are discussed in
order of magnitude.

During fiscal 2021 and continuing into the first quarter of fiscal 2022, global
supply chain disruptions, including COVID-19 related factory closures and
increased port congestion, caused delays in inventory receipts, increased raw
material costs, and higher shipping-related charges. We expect these supply
chain challenges to continue into the remainder of fiscal 2022, which could
negatively impact our business.

Financial results for the first quarter of fiscal 2022

Net revenues in the first quarter of fiscal 2022 increased by $142.2 million or
8.1%, compared to the first quarter of fiscal 2021, with comparable brand
revenue growth of 9.5%. This was driven by strength in both retail and
e-commerce, particularly in our Pottery Barn and West Elm brands, primarily due
to an increase in furniture sales. Net revenue growth was partially offset by
comparable brand revenue declines in our Williams Sonoma and Pottery Barn Kids
and Teen brands, and a decrease in international net revenues of 5.0%.

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For the first quarter of fiscal 2022, we delivered comparable brand revenue
growth of 9.5%. Pottery Barn, our largest brand, delivered 14.6% comparable
brand revenue growth during the quarter. All channels and product categories
contributed, with growth primarily driven by our high-quality proprietary
furniture business. In addition, we saw strength across the Pottery Barn
business - in core product, new offerings and our seasonal inventories. In West
Elm, comparable brand revenue growth was 12.8%, driven by strong performance in
furniture. Customers responded to new collections and line extensions in
incremental sizes and aesthetics. New categories such as kids and bath
contributed to incremental growth. The Williams Sonoma brand saw a comparable
brand revenue decline of 2.2% during the quarter, following a 35.3% increase in
comparable brand revenues in the first quarter of fiscal 2021. Comparable brand
revenues in the first quarter of fiscal 2022 were affected by out-of-stock
inventories, including constraints on our exclusive products. In our Pottery
Barn Kids and Teen brands, we saw comparable brand revenue decline 3.1% during
the quarter, driven by supply chain pressure out of Vietnam. Despite some
current recoveries in inventory, our backorders remain at significant levels,
and we have seen further push-outs of delivery. Finally, our emerging brands,
Rejuvenation and Mark and Graham, delivered a combined comparable brand revenue
growth of 31.0% during the first quarter of fiscal 2022.

For the first quarter of fiscal 2022, diluted earnings per share was $3.50,
compared to $2.90 in the first quarter of fiscal 2021 (which included a $0.03
impact related to acquisition-related compensation expense and amortization of
acquired intangibles of Outward, Inc.).

As of May 1, 2022, we had $324.8 million in cash and generated positive
operating cash flow of $184.5 million year-to-date. In addition to our strong
cash balance, we also ended the quarter with no outstanding borrowings under our
revolving line of credit. This strong liquidity position allowed us to fund the
operations of the business by investing $71.2 million in capital expenditures
year-to-date, and to provide stockholder returns of $559.2 million year-to-date
through stock repurchases and dividends.

Look forward

Looking forward to the balance of the year, we believe our operating model,
which includes our key differentiators - our in-house design, our digital-first
channel strategy, and our values, will set us apart from our competition and
allow us to drive long-term growth and profitability. However, we continue to
experience delays and increased costs across our global supply chain, including
higher product costs, elevated backorders, higher freight and incremental
distribution center costs for additional space to support our overall growth and
our ongoing mix shift to furniture. It is hard to predict with certainty when
these supply chain challenges will be fully resolved and we currently expect
these supply chain challenges, combined with our strong demand, to negatively
impact our inventory levels until the second half of fiscal year 2022. Despite
these challenges, we believe the demand for our proprietary and
sustainably-sourced products, our growth strategies and the efficiencies of our
operating model leave us well-positioned to mitigate these costs in both the
short- and long-term. For more information on risks, please see "Risk Factors"
in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended
January 30, 2022.

NET REVENUES

Net revenues primarily consist of sales of merchandise to our customers through
our e-commerce websites, at our retail stores and through our direct mail
catalogs, 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, incentives received from credit card issuers in
connection with our private label and co-branded credit cards, and breakage
income related to our stored-value cards. Revenue from the sale of merchandise
is reported net of sales returns.

Net revenues in the first quarter of fiscal 2022 increased by $142.2 million or
8.1%, compared to the first quarter of fiscal 2021, with comparable brand
revenue growth of 9.5%. This was driven by strength in both retail and
e-commerce, particularly in our Pottery Barn and West Elm brands, primarily due
to an increase in furniture sales. Net revenue growth was partially offset by
comparable brand revenue declines in our Williams Sonoma and Pottery Barn Kids
and Teen brands, and a decrease in international net revenues of 5.0%.

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Comparable Brand Revenue

Comparable brand revenue includes comparable store sales and e-commerce sales,
including through our direct mail catalogs, 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 months, and which have been open for at
least 12 consecutive months without closure for seven or more consecutive days
within the same fiscal month. Comparable stores that were temporarily closed due
to COVID-19 were not excluded from the comparable brand revenue calculation.
Outlet comparable store net revenues are included in their respective brands.
Sales to our international franchisees are excluded from comparable brand
revenue as their stores and e-commerce websites are not operated by us. Sales
from certain operations are also excluded until such time that we believe those
sales are meaningful to evaluating their performance. Additionally, comparable
brand revenue growth for newer concepts is not separately disclosed until such
time that we believe those sales are meaningful to evaluating the performance of
the brand.

                                                                         For the Thirteen Weeks Ended
Comparable brand revenue growth (decline)                             May 1, 2022          May 2, 2021
Pottery Barn                                                                  14.6  %                41.3  %
West Elm                                                                      12.8                   50.9
Williams Sonoma                                                               (2.2)                  35.3
Pottery Barn Kids and Teen                                                    (3.1)                  27.6

Total1                                                                         9.5  %                40.4  %

1 Total brand comparable store sales growth includes the results of Rejuvenation and Mark and Graham.

STORE DATA

                                                                                                                                                            Average Leased Square
                                                                               Store Count                                                                    Footage Per Store
                                        January 30,                                                      May 1,                                         May 1,
                                               2022            Openings             Closings               2022           May 2, 20211                    2022                      May 2, 20211
Pottery Barn                              188                    1                   (1)                188                  195                   14,500                              14,600
Williams Sonoma                           174                    2                   (1)                175                  195                    6,900                               6,800
West Elm                                  121                    -                    -                 121                  121                   13,200                              13,100
Pottery Barn Kids                          52                    -                    -                  52                   57                    7,700                               7,800
Rejuvenation                                9                    -                    -                   9                   10                    9,400                               8,500
Total                                     544                    3                   (2)                545                  578                   11,000                              10,900
Store selling square footage at period-end                                                                                                      3,823,000                           3,972,000
Store leased square footage at period-end                                                                                                       6,006,000                           6,289,000


1Fiscal 2021 retail store data includes stores temporarily closed due to COVID-19. All stores reopened at the end of fiscal 2021.

COST OF GOODS SOLD

                                           For the Thirteen Weeks Ended
                                                       % Net                           % Net
(In thousands)                     May 1, 2022      Revenues       May 2, 2021      Revenues
Cost of goods sold 1   $     1,062,679               56.2  %    $    996,176         57.0  %

1Includes total occupancy expenditures of $186.4 million and $175.7 million for the first quarter of fiscal 2022 and the first quarter of fiscal 2021, respectively.

Cost of goods sold includes cost of goods, occupancy expenses and shipping
costs. Cost of goods consists of cost of merchandise, inbound freight expenses,
freight-to-store expenses and other inventory related costs such as
replacements, damages, obsolescence and shrinkage. Occupancy expenses consist of
rent, other occupancy costs (including property taxes, common area maintenance
and utilities) and depreciation. Shipping costs consist of third-party delivery
services and shipping materials.

Our classification of expenses in cost of goods sold may not be comparable to
other public companies, as we do not include non-occupancy related costs
associated with our distribution network in cost of goods sold. These costs,
which include distribution network employment, third-party warehouse management
and other distribution related administrative expenses, are recorded in selling,
general and administrative expenses.

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First Quarter of Fiscal 2022 vs. First Quarter of Fiscal 2021

Cost of goods sold increased $66.5 million, or 6.7%, in the first quarter of
fiscal 2022, compared to the first quarter of fiscal 2021. Cost of goods sold as
a percentage of net revenues decreased to 56.2% in the first quarter of fiscal
2022 from 57.0% in the first quarter of fiscal 2021. This decrease in rate was
primarily driven by higher merchandise margins from reduced promotional
activity.

SELLING, GENERAL AND ADMINISTRATIVE FEES

                                                                              For the Thirteen Weeks Ended
(In thousands)                                           May 1, 2022        % Net Revenues           May 2, 2021        % Net Revenues

Selling, general and administrative expenses $505,067

        26.7  %       $    477,676                  27.3  %


Selling, general and administrative expenses consist of non-occupancy related
costs associated with our retail stores, distribution and manufacturing
facilities, customer care centers, supply chain operations (buying, receiving
and inspection) and corporate administrative functions. These costs include
employment, advertising, third party credit card processing and other general
expenses.

First Quarter of Fiscal 2022 vs. First Quarter of Fiscal 2021

Selling, general and administrative expenses increased $27.4 million, or 5.7%,
in the first quarter of fiscal 2022, compared to the first quarter of fiscal
2021. Selling, general and administrative expenses as a percentage of net
revenues decreased to 26.7% in the first quarter of fiscal 2022 from 27.3% in
the first quarter of fiscal 2021. This decrease in rate was primarily driven by
the leverage of employment costs and advertising expenses from higher sales and
overall cost discipline.

INCOME TAXES

The effective tax rate was 21.5% for the first quarter of fiscal 2022 compared
to 16.6% for the first quarter of fiscal 2021. The increase in the effective tax
rate is primarily due to less excess tax benefit from stock-based compensation
in fiscal 2022 compared to fiscal 2021.

CASH AND CAPITAL RESOURCES

Material cash needs

There were no material changes during the quarter to the Company's material cash
requirements, commitments and contingencies that are described in Part II, Item
7 of the Company's Annual Report on Form 10-K for the fiscal year ended
January 30, 2022, which is incorporated herein by reference.

Share buyback program and dividends

See Note G to our Condensed Consolidated Financial Statements, Stock Repurchase
Program and Dividends, within Item 1 of this Quarterly Report on Form 10-Q for
further information.

Liquidity Outlook

For the remainder of fiscal 2022, we plan to use our cash resources to fund our
inventory and inventory-related purchases, employment-related costs, advertising
and marketing initiatives, stock repurchases, the payment of income taxes,
rental payments on our leases, property and equipment purchases, and dividend
payments.

We believe our cash on hand, cash flows from operations, and our available
credit facilities will provide adequate liquidity for our business operations as
well as stock repurchases, capital expenditures, dividends and other liquidity
requirements associated with our business operations over the next 12 months. We
are currently not aware of any other trends or demands, commitments, events or
uncertainties that will result in, or that are reasonably likely to result in,
our liquidity increasing or decreasing in any material way that will impact our
capital needs during or beyond the next 12 months.

Sources of liquidity

Of the May 1, 2022we held $324.8 million in cash and cash equivalents, the majority of which was held in interest-bearing demand accounts and money market funds, and of which $156.0 million was held by our international subsidiaries. As is consistent in our industry, our cash balances are seasonal in nature, with the fourth quarter historically representing a significantly higher level of cash than other periods.

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In addition to our cash balances on hand, we have a credit facility (the "Credit
Facility") which provides for a $500 million unsecured revolving line of credit
(the "Revolver"). Our Revolver may be used to borrow revolving loans or request
the issuance of letters of credit. We may, upon notice to the administrative
agent, request existing or new lenders, at such lenders' option, to increase the
Revolver by up to $250 million to provide for a total of $750 million of
unsecured revolving credit.

During the first quarter of fiscal 2022, we had no borrowings under our
Revolver. Additionally, as of May 1, 2022, issued but undrawn standby letters of
credit of $11.4 million were outstanding under our Revolver. The standby letters
of credit were primarily issued to secure the liabilities associated with
workers' compensation and other insurance programs.

Our Credit Facility contains certain restrictive loan covenants, including,
among others, a financial covenant requiring a maximum leverage ratio (funded
debt adjusted for operating lease liabilities to earnings before interest,
income tax, depreciation, amortization and rent expense), and covenants limiting
our ability to incur indebtedness, grant liens, make acquisitions, merge or
consolidate, and dispose of assets. As of May 1, 2022, we were in compliance
with our financial covenants under our Credit Facility and, based on current
projections, we expect to remain in compliance throughout the next 12 months.

Letter of credit facilities

We have three unsecured letter of credit reimbursement facilities for a total of
$35 million. Our letter of credit facilities contain covenants that are
consistent with our Credit Facility. Interest on unreimbursed amounts under our
letter of credit facilities accrues at a base rate as defined in our Credit
Facility, plus an applicable margin based on our leverage ratio. As of May 1,
2022, the aggregate amount outstanding under our letter of credit facilities was
$6.5 million, which represents only a future commitment to fund inventory
purchases to which we had not taken legal title. The latest expiration date
possible for any future letters of credit issued under the facilities is
January 19, 2023.

Cash flow from operating activities

For the first quarter of fiscal 2022, net cash provided by operating activities
was $184.5 million compared to $238.9 million for the first quarter of fiscal
2021. For the first quarter of fiscal 2022, net cash provided by operating
activities was primarily attributable to net earnings adjusted for non-cash
items, an increase in income tax payable, and an increase in gift card and other
deferred revenue (as a result of an increase in sales), partially offset by
higher spending on merchandise inventories (as a result of the strong customer
demand for our products) and decreases in accrued expenses and operating lease
liabilities. Net cash provided by operating activities for the first quarter of
fiscal 2022 decreased compared to the first quarter of fiscal 2021, primarily
due to an increase in merchandise inventories and a decrease in accrued expenses
and other liabilities, partially offset by an increase in net earnings adjusted
for non-cash items.

Cash flow from investing activities

For the first quarter of fiscal 2022, net cash used in investing activities was
$71.1 million compared to $42.3 million for the first quarter of fiscal 2021,
and was primarily attributable to purchases of property and equipment related to
technology and supply chain enhancements.

Cash flow from financing activities

For the first quarter of fiscal 2022, net cash used in financing activities was
$637.7 million compared to $759.6 million for the first quarter of fiscal 2021,
driven by repurchases of common stock, tax withholdings related to stock-based
awards and payment of dividends. Net cash used in financing activities for the
first quarter of fiscal 2022 decreased compared to the first quarter of fiscal
2021, primarily due to the repayment of debt in the first quarter of fiscal 2021
that did not recur in the first quarter of fiscal 2022, partially offset by an
increase in repurchases of common stock.

Seasonality

Our business is subject to substantial seasonal variations in demand.
Historically, a significant portion of our revenues and net earnings have been
realized during the period from October through January, and levels of net
revenues and net earnings have typically been lower during the period from
February through September. We believe this is the general pattern associated
with the retail industry. In preparation for and during our holiday selling
season, we hire a substantial number of additional temporary employees,
primarily in our retail stores, distribution facilities and customer care
centers.

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Contents

CRITICAL ACCOUNTING ESTIMATES

Management's Discussion and Analysis of Financial Condition and Results of
Operations is based on our Condensed Consolidated Financial Statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
Condensed Consolidated Financial Statements requires us to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and related disclosures of contingent assets and liabilities. These
estimates and assumptions are evaluated on an ongoing basis and are based on
historical experience and various other factors that we believe to be reasonable
under the circumstances. Actual results could differ significantly from these
estimates. During the first quarter of fiscal 2022, there were no significant
changes to the critical accounting estimates discussed in our Annual Report on
Form 10-K for the fiscal year ended January 30, 2022.

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