Pottery Barn 2005 Annual Report Download - page 35

Results of Operations
NET REVENUES
Net revenues consist of retail sales, direct-to-customer sales and shipping fees. Retail sales include sales of
merchandise to customers at our retail stores. Direct-to-customer sales include sales of merchandise to customers
through our catalogs and the Internet. Shipping fees consist of revenue received from customers for delivery of
merchandise.
The following table summarizes our net revenues for the 52 weeks ended January 29, 2006 (“fiscal 2005”),
January 30, 2005 (“fiscal 2004”) and February 1, 2004 (“fiscal 2003”).
Dollars in thousands Fiscal 2005 % Total Fiscal 2004 % Total Fiscal 2003 % Total
Retail revenues $2,032,907 57.4% $1,810,979 57.7% $1,622,383 58.9%
Direct-to-customer revenues 1,506,040 42.6% 1,325,952 42.3% 1,131,985 41.1%
Net revenues $3,538,947 100.0% $3,136,931 100.0% $2,754,368 100.0%
Net revenues for fiscal 2005 increased by $402,016,000, or 12.8%, over fiscal 2004. The increase was primarily
due to an increase in store leased square footage of 8.6% (including 30 new store openings and the remodeling or
expansion of an additional 8 stores) and comparable stores sales growth of 4.9% in fiscal 2005. The increase was
further driven by increased catalog and page circulation (4.6% and 9.7%, respectively) and continued strength in
our Internet business, primarily due to our expanded efforts associated with electronic direct marketing initiatives
and strategic e-commerce partnerships, and the incremental net revenues generated by the late 2004 launch of our
Hold Everything e-commerce website. These increases were partially offset by the temporary closure of 12 stores
and the permanent closure of 8 stores in fiscal 2005.
Net revenues for fiscal 2004 increased by $382,563,000, or 13.9%, over fiscal 2003. The increase was primarily
due to an increase in store leased square footage of 11.4% (including 43 new store openings and the remodeling
or expansion of an additional 17 stores) and comparable stores sales growth of 3.5% in fiscal 2004. The increase
was further driven by increased catalog and page circulation (12.1% and 19.5%, respectively) and continued
strength in our Internet business, primarily due to our expanded efforts associated with electronic direct
marketing initiatives and the incremental net revenues generated by the late 2003 and 2004 launches of our
PBteen, West Elm, and Hold Everything e-commerce websites. These increases were partially offset by the
temporary closure of 15 stores and the permanent closure of 5 stores in fiscal 2004.
RETAIL REVENUES AND OTHER DATA
Dollars in thousands Fiscal 2005 Fiscal 2004 Fiscal 2003
Retail revenues $2,032,907 $1,810,979 $1,622,383
Percent growth in retail revenues 12.3% 11.6% 13.9%
Percent growth in comparable store sales 4.9% 3.5% 4.0%
Number of stores – beginning of year 552 512 478
Number of new stores 30 43 46
Number of new stores due to remodeling181719
Number of closed stores due to remodeling1, 2 (12) (15) (21)
Number of permanently closed stores (8) (5) (10)
Number of stores – end of year 570 552 512
Store selling square footage at year-end 3,140,000 2,911,000 2,624,000
Store leased square footage (“LSF”) at year-end 5,035,000 4,637,000 4,163,000
1Remodeled stores are defined as those stores temporarily closed and subsequently reopened during the year due to square
footage expansion, store modification or relocation.
2Fiscal 2005 store closing numbers include 2 Williams-Sonoma, 2 Pottery Barn and 1 Pottery Barn Kids temporary store
closures in the New Orleans area due to Hurricane Katrina. One Williams-Sonoma store subsequently reopened before fiscal
year-end and one Williams-Sonoma, one Pottery Barn, and one Pottery Barn Kids store reopened subsequent to fiscal year-
end; the remaining Pottery Barn store is scheduled to reopen in fiscal 2006.
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Form 10-K