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Williams-Sonoma (LTS:0LXC) ROIC % : 28.39% (As of Oct. 2024)


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What is Williams-Sonoma ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Williams-Sonoma's annualized return on invested capital (ROIC %) for the quarter that ended in Oct. 2024 was 28.39%.

As of today (2024-12-13), Williams-Sonoma's WACC % is 13.50%. Williams-Sonoma's ROIC % is 30.90% (calculated using TTM income statement data). Williams-Sonoma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Williams-Sonoma ROIC % Historical Data

The historical data trend for Williams-Sonoma's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Williams-Sonoma ROIC % Chart

Williams-Sonoma Annual Data
Trend Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23 Jan24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 14.66 21.82 36.24 34.44 26.73

Williams-Sonoma Quarterly Data
Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24 Jul24 Oct24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 27.76 40.19 29.49 25.34 28.39

Competitive Comparison of Williams-Sonoma's ROIC %

For the Specialty Retail subindustry, Williams-Sonoma's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Williams-Sonoma's ROIC % Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, Williams-Sonoma's ROIC % distribution charts can be found below:

* The bar in red indicates where Williams-Sonoma's ROIC % falls into.



Williams-Sonoma ROIC % Calculation

Williams-Sonoma's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jan. 2024 is calculated as:

ROIC % (A: Jan. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jan. 2023 ) + Invested Capital (A: Jan. 2024 ))/ count )
=1244.193 * ( 1 - 25.41% )/( (3478.553 + 3465.329)/ 2 )
=928.0435587/3471.941
=26.73 %

where

Invested Capital(A: Jan. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=4663.016 - 817.119 - ( 367.344 - max(0, 1636.451 - 2036.08+367.344))
=3478.553

Invested Capital(A: Jan. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=5273.548 - 968.737 - ( 1262.007 - max(0, 1880.315 - 2719.797+1262.007))
=3465.329

Williams-Sonoma's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Oct. 2024 is calculated as:

ROIC % (Q: Oct. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jul. 2024 ) + Invested Capital (Q: Oct. 2024 ))/ count )
=1282.572 * ( 1 - 25.11% )/( (3369.563 + 3397.52)/ 2 )
=960.5181708/3383.5415
=28.39 %

where

Invested Capital(Q: Jul. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=5211.672 - 856.607 - ( 1265.259 - max(0, 1758.795 - 2744.297+1265.259))
=3369.563

Invested Capital(Q: Oct. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=4968.34 - 929.349 - ( 826.784 - max(0, 1845.31 - 2486.781+826.784))
=3397.52

Note: The Operating Income data used here is four times the quarterly (Oct. 2024) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Williams-Sonoma  (LTS:0LXC) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Williams-Sonoma's WACC % is 13.50%. Williams-Sonoma's ROIC % is 30.90% (calculated using TTM income statement data). Williams-Sonoma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Williams-Sonoma earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Williams-Sonoma ROIC % Related Terms

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Williams-Sonoma Business Description

Traded in Other Exchanges
Address
3250 Van Ness Avenue, San Francisco, CA, USA, 94109
With a retail and direct-to-consumer presence, Williams-Sonoma is a player in the $300 billion domestic home category and $450 billion international home market, focused on expanding its exposure in the B2B ($80 billion total addressable market), marketplace, and franchise areas. Namesake Williams-Sonoma (160 stores) offers high-end cooking essentials, while Pottery Barn (186) provides casual home accessories. West Elm (122) is an emerging concept for young professionals, and Rejuvenation (11) offers lighting and house parts. Brand extensions include Pottery Barn Kids and PBteen (46) as well as Mark & Graham and Greenrow. Williams-Sonoma also has a business-to-business team that supports projects that range from residential to large-scale commercial.

Williams-Sonoma Headlines

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