Pottery Barn 2012 Annual Report Download - page 5

To Our Stockholders,
2012 was another year of record performance for our company. Net revenues increased 9% and exceeded $4
billion for the first time in our history. Diluted earnings per share grew 14% to $2.54. These very pleasing results
confirm the strength of our company’s strategies and our brands—Pottery Barn, Williams-Sonoma, Pottery Barn
Kids, West Elm, PBteen, Rejuvenation, and Mark and Graham—as well as the quality of our associates and
executive leadership. Particularly pleasing was that 46% of our revenues were transacted with our customers
through the internet and our catalogs.
As we continue to focus on our long-term initiatives, global expansion offers us exciting growth prospects. Our
global vision is to serve our customers with the same high-quality products and superior service that we do
domestically. In May 2013, we will enter the Australian market with our first company-owned stores and e-
commerce sites outside of North America. In addition, our franchise business continues to grow and, in 2012, 10
additional stores opened in the Middle East, for a total of 23 stores across our brands.
In 2012, we also launched three new businesses. Mark and Graham is our newest brand, specializing in
personalized products and gifts. West Elm Market is an extension of our West Elm brand, focusing on functional
design, local production, entrepreneurship, and community connections. Agrarian, a category extension of our
Williams-Sonoma brand, provides homemade and homegrown gardening essentials. Through 2013 and beyond,
we will continue to drive strategies that strengthen our brands while identifying new business opportunities.
Our strong earnings performance enabled us to end the year with $425 million in cash after returning $243
million to our stockholders through stock repurchases and dividends. We remain confident in the cash-generating
power of our multi-channel, multi-brand operating model and the strength of the company’s balance sheet. We
are committed to returning excess cash to our stockholders. As we recently announced, we have increased our
quarterly cash dividend by 41% for fiscal 2013, and we have authorized a new three-year $750 million stock
repurchase program.
We are most grateful to all our stockholders for your ongoing confidence in our company. On your behalf,
I would also like to thank my fellow Board members for their continued support and guidance. I also thank our
customers, vendors and other business partners for their support. I particularly wish to propose a vote of deep
appreciation to our President and Chief Executive Officer, Laura Alber, her executive team, and all of our
associates for their dedicated efforts this past year. Without them, none of this would have been possible.
We look forward to continued success in 2013.
Adrian D.P. Bellamy
Chairman of the Board of Directors
Stockholders Letters