Pottery Barn 2006 Annual Report Download - page 36

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. Revenues are presented net of sales returns and other discounts.
The following table summarizes our net revenues for the 52 weeks ended January 28, 2007 (“fiscal 2006”),
January 29, 2006 (“fiscal 2005”) and January 30, 2005 (“fiscal 2004”):
Dollars in thousands Fiscal 2006 % Total Fiscal 2005 % Total Fiscal 2004 % Total
Retail revenues $2,153,978 57.8% $2,032,907 57.4% $1,810,979 57.7%
Direct-to-customer revenues 1,573,535 42.2% 1,506,040 42.6% 1,325,952 42.3%
Net revenues $3,727,513 100.0% $3,538,947 100.0% $3,136,931 100.0%
Net revenues for fiscal 2006 increased by $188,566,000, or 5.3%, over fiscal 2005. The increase was primarily
due to an increase in store leased square footage of 8.3% (including 28 new store openings and the remodeling or
expansion of an additional 28 stores) and comparable stores sales growth of 0.3% in fiscal 2006. This increase
was further driven by an overall increase in catalog page circulation of 3.2% and continued strength in our
Internet business, primarily resulting from our catalog advertising, expanded efforts associated with our
electronic direct marketing initiatives and strategic e-commerce partnerships. This increase was partially offset
by lost revenues in the Hold Everything brand, the temporary closure of 24 stores and the permanent closure of
14 stores in fiscal 2006.
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.
RETAIL REVENUES AND OTHER DATA
Dollars in thousands Fiscal 2006 Fiscal 2005 Fiscal 2004
Retail revenues $2,153,978 $2,032,907 $1,810,979
Percent growth in retail revenues 6.0% 12.3% 11.6%
Percent growth in comparable store sales 0.3% 4.9% 3.5%
Number of stores – beginning of year 570 552 512
Number of new stores 28 30 43
Number of new stores due to remodeling128 8 17
Number of closed stores due to remodeling1, 2 (24) (12) (15)
Number of permanently closed stores (14) (8) (5)
Number of stores – end of year 588 570 552
Store selling square footage at year-end 3,389,000 3,140,000 2,911,000
Store leased square footage (“LSF”) at year-end 5,451,000 5,035,000 4,637,000
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 two Williams-Sonoma, two Pottery Barn and one Pottery Barn Kids temporary
store closures in the New Orleans area due to Hurricane Katrina. One Williams-Sonoma store reopened before fiscal 2005
year-end. The remaining stores reopened in fiscal 2006.
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