Pottery Barn 2005 Annual Report Download - page 7
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To enhance shareholder value, we will continue to adhere to the principles that have successfully guided us in the
past – building the authority of our existing brands in the market segments that we serve; continuing to leverage
the potential of our multi-channel strategy; and delivering on the commitments we have made to our
shareholders.
For the last five years, we have consistently met or exceeded the financial expectations that we have set for
ourselves. For this reason, it should be no surprise that we are approaching our future with great confidence, not
only from a long-term growth and profit-enhancement point of view, but also from a free cash flow point of
view. Based on this confidence – combined with our strong cash position and projected cash flow that far
exceeds the funding requirements of our future growth – we will, in 2006, for the first time in our history, begin
returning cash to our shareholders in the form of a quarterly dividend – in addition to continuing our share
repurchase programs.
This quarterly dividend, which we declared on March 20, 2006, is $0.10 per share, for an indicated annual cash
dividend of $0.40 per share. Also at that time, we authorized an additional two million-share stock repurchase
program. These two programs combined are expected to return nearly 70% of our projected free cash flow to our
shareholders in 2006.
In the fifty years since Chuck Williams opened our first store, Williams-Sonoma, Inc. has grown from a single
retail store to a multi-channel portfolio of brands. Though each of these brands bring innovative, quality products
to our customers, the whole is greater than the sum of its parts. Together, these brands fulfill our goal of
“enhancing our customers’ lives at home.” Whether the customer is shopping in our retail stores, ordering from
our catalogs, or purchasing on our e-commerce websites, we are committed to providing a superior customer
experience. And we are able to do so because our associates – the finest in the retail industry – continue to find
new ways to exceed the expectations of our customers.
In closing, we would like to thank our loyal customers, employees, vendor partners, and shareholders for their
continued support. While 2005 was a year of record financial performance, we look forward to building on our
successes and driving toward another great year in 2006.
W. Howard Lester,
Chairman of the Board
Edward A. Mueller,
Chief Executive Officer
This letter contains forward-looking statements. Please see the section titled “Forward-Looking Statements” on
page 1 of our Annual Report on Form 10-K for the fiscal year ended January 29, 2006, which is part of this
Annual Report to Shareholders, for important cautionary language regarding these statements.
Shareholders’ Letter