Pottery Barn 2007 Annual Report Download - page 33

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 53 weeks ended February 3, 2008 (“fiscal 2007”), the
52 weeks ended January 28, 2007 (“fiscal 2006”) and the 52 weeks ended January 29, 2006 (“fiscal 2005”):
Dollars in thousands
Fiscal 2007
(53 Weeks) % Total
Fiscal 2006
(52 Weeks) % Total
Fiscal 2005
(52 Weeks) % Total
Retail revenues $2,281,218 57.8% $2,153,978 57.8% $2,032,907 57.4%
Direct-to-customer revenues 1,663,716 42.2% 1,573,535 42.2% 1,506,040 42.6%
Net revenues $3,944,934 100.0% $3,727,513 100.0% $3,538,947 100.0%
Net revenues for fiscal 2007 increased by $217,421,000, or 5.8%, over fiscal 2006. This increase was primarily due
to an increase in store leased square footage of 5.3% (including 23 new store openings and the remodeling or
expansion of an additional 26 stores), the impact of the extra week of net revenues in fiscal 2007, a 53-week year,
and comparable store sales growth of 0.3% in fiscal 2007. This increase was further driven by an overall increase in
catalog and page circulation of 3.7% and 7.9%, respectively, 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 28 stores and the permanent closure of 9 stores in fiscal 2007.
Net revenues for fiscal 2006 increased by $188,566,000, or 5.3%, over fiscal 2005. This 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.
RETAIL REVENUES AND OTHER DATA
Dollars in thousands
Fiscal 2007
(53 Weeks)
Fiscal 2006
(52 Weeks)
Fiscal 2005
(52 Weeks)
Retail revenues $2,281,218 $2,153,978 $2,032,907
Percent growth in retail revenues 5.9% 6.0% 12.3%
Percent increase in comparable store sales 0.3% 0.3% 4.9%
Number of stores – beginning of year 588 570 552
Number of new stores 23 28 30
Number of new stores due to remodeling126 28 8
Number of closed stores due to remodeling1, 2 (28) (24) (12)
Number of permanently closed stores (9) (14) (8)
Number of stores – end of year 600 588 570
Store selling square footage at year-end 3,575,000 3,389,000 3,140,000
Store leased square footage (“LSF”) at year-end 5,739,000 5,451,000 5,035,000
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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Form 10-K