Williams-Sonoma Inc. (NYSE:WSM) Q3 2017 Earnings Conference Call Transcript
Nov 16, 2017 • 05:00 pm ET
Welcome to the Williams-Sonoma, Inc. Third Quarter 2017 Earnings Conference Call. (Operator Instructions) This call is being recorded.
I would now like to turn the conference over to Beth Potillo-Miller, SVP of Finance to discuss non-GAAP financial measures and forward-looking statements. Please go ahead.
Thank you, Ashley. Good afternoon. This call should be considered in conjunction with the press release that we issued earlier today. Our discussion today will relate to results and guidance based on certain non-GAAP measures, including non-GAAP SG&A, operating income, operating margin, effective tax rate and diluted EPS, which exclude certain items affecting comparability. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures and our explanation of why the non-GAAP financial measures may be useful are discussed in our press release.
During the first and third quarters of 2016 and the first quarter of fiscal 2017, we incurred severance-related charges totaling approximately $13 million or $0.09 per diluted share, $1 million or $0.01 per diluted share and $6 million or $0.04 per diluted share, respectively. These charges were reported as SG&A expense within the unallocated segment. During the first quarter of fiscal 2017, we incurred tax expense of approximately $1 million or $0.02 per diluted share associated with the adoption of new accounting rules related to stock-based compensation.
(Forward-Looking Cautionary Statements)
I will now turn the conference call over to Laura Alber, our President and CEO.
Thanks, Beth. Good afternoon, and thank you all for joining us. With me today is Julie Whalen, our CFO; Felix Carbullido, our Chief Marketing Officer; and Sameer Hassan, our SVP of Digital Technology.
Our third quarter results demonstrates the effectiveness of our strategic priority to deliver value, quality and excellent customer service. During the quarter, strong execution against our product and digital initiatives drove new customer acquisitions and top line expansion in a competitive and dynamic retail environment. Our investments in digital innovation and cross-brand services as well as continued optimization of our supply chain position us to further differentiate our business and to deliver long-term gains in market share and profitable growth.
Before I go and discuss our performance this quarter, I want to take a moment to recognize the strength and compassion of our associates who came together to support each other and their communities in the face of several devastating natural disasters this quarter. From the hurricanes in Texas, Florida and Puerto Rico to the wildfires in California, our associates did a remarkable job providing assistance to those in need during this difficult time, often as they faced disruptions in their own lives.
Unfortunately, these natural disasters also impacted our financial results to lost sales of approximately $7 million or 60 basis points of growth. Julie will discuss our financial results in detail, but I wanted to highlight that during the third quarter, we drove net revenue growth of 4.3% and a combined revenue comp of 3.3%, which is inclusive of an estimated 50 basis point negative impact from the hurricane and