Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ PART I. FINANCIAL INFORMATIONPAGEItem 1.Financial Statements (Unaudited)1Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations14Item 3.Quantitative and Qualitative Disclosures About Market Risk20Item 4.Controls and Procedures20PART II. OTHER INFORMATIONItem 1.Legal Proceedings21Item 1A.Risk Factors21Item 2.Unregistered Sales of Equity Securities and Use of Proceeds21Item 3.Defaults Upon Senior Securities21Item 4.Mine Safety Disclosures21Item 5.Other Information21Item 6.Exhibits22 For the Thirteen Weeks EndedFor the Thirty-nine Weeks Ended(In thousands, except per share amounts)October 30, 2022October 31, 2021October 30, 2022October 31, 2021Net revenues$2,192,574 $2,047,539 $6,221,338 $5,744,907 Cost of goods sold1,282,048 1,152,054 3,553,455 3,238,181 Gross profit910,526 895,485 2,667,883 2,506,726 Selling, general and administrative expenses570,893 565,218 1,639,248 1,578,182 Operating income339,633 330,267 1,028,635 928,544 Interest (income) expense, net(370)121 (877)1,954 Earnings before income taxes340,003 330,146 1,029,512 926,590 Income taxes88,280 80,622 256,601 203,194 Net earnings$251,723 $249,524 $772,911 $723,396 Basic earnings per share$3.77 $3.37 $11.27 $9.66 Diluted earnings per share$3.72 $3.29 $11.08 $9.40 Shares used in calculation of earnings per share:Basic66,704 74,010 68,578 74,865 Diluted67,617 75,943 69,782 76,975 For the Thirteen Weeks EndedFor the Thirty-nine Weeks Ended(In thousands)October 30, 2022October 31, 2021October 30, 2022October 31, 2021Net earnings$251,723 $249,524 $772,911 $723,396 Other comprehensive income (loss):Foreign currency translation adjustments(5,158)792 (8,057)970 Change in fair value of derivative financial instruments, net of tax (tax benefit) of $378, $(19), $420, and $(235)1,069 (54)1,188 (654)Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax (tax benefit) of $45, $(131), $53, and $(312)(128)369 (151)859 Comprehensive income$247,506 $250,631 $765,891 $724,571 As of(In thousands, except per share amounts)October 30,2022January 30,2022October 31,2021ASSETSCurrent assetsCash and cash equivalents$113,058 $850,338 $656,898 Accounts receivable, net125,842 131,683 139,511 Merchandise inventories, net1,687,895 1,246,372 1,272,028 Prepaid expenses104,208 69,252 85,433 Other current assets29,729 26,249 22,852 Total current assets2,060,732 2,323,894 2,176,722 Property and equipment, net1,009,088 920,773 892,226 Operating lease right-of-use assets1,277,064 1,132,764 1,159,315 Deferred income taxes, net54,247 56,585 61,768 Goodwill85,245 85,354 85,392 Other long-term assets, net107,631 106,250 101,901 Total assets$4,594,007 $4,625,620 $4,477,324 LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilitiesAccounts payable$720,856 $612,512 $638,371 Accrued expenses275,381 319,924 273,722 Gift card and other deferred revenue488,771 447,770 431,446 Income taxes payable45,879 79,554 38,320 Operating lease liabilities220,012 217,409 218,348 Other current liabilities103,821 94,517 91,418 Total current liabilities1,854,720 1,771,686 1,691,625 Deferred lease incentives13,918 16,360 17,268 Long-term operating lease liabilities1,208,074 1,066,839 1,095,290 Other long-term liabilities104,361 106,528 129,771 Total liabilities3,181,073 2,961,413 2,933,954 Stockholders’ equityPreferred stock: $0.01 par value; 7,500 shares authorized; none issued— — — Common stock: $0.01 par value; 253,125 shares authorized; 66,556, 71,982 and 73,326 shares issued and outstanding at October 30, 2022, January 30, 2022 and October 31, 2021, respectively666 720 734 Additional paid-in capital553,698 600,942 585,449 Retained earnings877,157 1,074,084 963,840 Accumulated other comprehensive loss(17,848)(10,828)(5,942)Treasury stock, at cost: 1, 4 and 4 shares as of October 30, 2022, January 30, 2022 and October 31, 2021, respectively(739)(711)(711)Total stockholders’ equity1,412,934 1,664,207 1,543,370 Total liabilities and stockholders’ equity$4,594,007 $4,625,620 $4,477,324 Common StockAdditionalPaid-inCapitalRetainedEarningsAccumulatedOtherComprehensiveIncome (Loss)TreasuryStockTotalStockholders’Equity(In thousands)SharesAmountBalance at January 30, 202271,982 $720 $600,942 $1,074,084 $(10,828)$(711)$1,664,207 Net earnings— — — 254,113 — — 254,113 Foreign currency translation adjustments— — — — (1,514)— (1,514)Change in fair value of derivative financial instruments, net of tax— — — — 93 — 93 Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — (18)— (18)Conversion/release of stock-based awards 1617 6 (78,142)— — (372)(78,508)Repurchases of common stock(3,380)(33)(18,590)(482,452)— — (501,075)Reissuance of treasury stock under stock-based compensation plans 1— — (344)— — 344 — Stock-based compensation expense— — 28,339 — — — 28,339 Dividends declared— — — (55,893)— — (55,893)Balance at May 1, 202269,219 $693 $532,205 $789,852 $(12,267)$(739)$1,309,744 Net earnings— — — 267,075 — — 267,075 Foreign currency translation adjustments— — — — (1,385)— (1,385)Change in fair value of derivative financial instruments, net of tax— — — — 26 — 26 Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — (5)— (5)Conversion/release of stock-based awards 126 — (767)— — — (767)Repurchases of common stock(2,188)(22)(12,519)(252,808)— — (265,349)Stock-based compensation expense— — 22,976 — — — 22,976 Dividends declared— — — (54,036)— — (54,036)Balance at July 31, 202267,057 $671 $541,895 $750,083 $(13,631)$(739)$1,278,279 Net earnings— — — 251,723 — — 251,723 Foreign currency translation adjustments— — — — (5,158)— (5,158)Change in fair value of derivative financial instruments, net of tax— — — — 1,069 — 1,069 Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — (128)— (128)Conversion/release of stock-based awards113 — (1,156)— — — (1,156)Repurchases of common stock(514)(5)(3,010)(71,516)— — (74,531)Stock-based compensation expense— — 15,969 — — — 15,969 Dividends declared— — — (53,133)— — (53,133)Balance at October 30, 202266,556 $666 $553,698 $877,157 $(17,848)$(739)$1,412,934 Common StockAdditionalPaid-inCapitalRetainedEarningsAccumulatedOtherComprehensiveIncome (Loss)TreasuryStockTotalStockholders’Equity(In thousands)SharesAmountBalance at January 31, 202176,340 $764 $638,375 $1,019,762 $(7,117)$(599)$1,651,185 Net earnings— — — 227,802 — — 227,802 Foreign currency translation adjustments— — — — 3,700 — 3,700 Change in fair value of derivative financial instruments, net of tax— — — — (665)— (665)Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — 153 — 153 Conversion/release of stock-based awards 1686 7 (97,958)— — (500)(98,451)Repurchases of common stock(1,791)(18)(9,239)(306,272)— — (315,529)Reissuance of treasury stock under stock-based compensation plans 1— — (344)(44)— 388 — Stock-based compensation expense— — 25,471 — — — 25,471 Dividends declared— — — (46,370)— — (46,370)Balance at May 2, 202175,235 $753 $556,305 $894,878 $(3,929)$(711)$1,447,296 Net earnings— — — 246,070 — — 246,070 Foreign currency translation adjustments— — — — (3,522)— (3,522)Change in fair value of derivative financial instruments, net of tax— — — — 65 — 65 Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — 337 — 337 Conversion/release of stock-based awards 125 — (1,709)— — — (1,709)Repurchases of common stock(834)(8)(4,358)(131,493)— — (135,859)Stock-based compensation expense— — 19,496 — — — 19,496 Dividends declared— — — (45,455)— — (45,455)Balance at August 1, 202174,426 $745 $569,734 $964,000 $(7,049)$(711)$1,526,719 Net earnings— — — 249,524 — — 249,524 Foreign currency translation adjustments— — — — 792 — 792 Change in fair value of derivative financial instruments, net of tax— — — — (54)— (54)Reclassification adjustment for realized (gain) loss on derivative financial instruments, net of tax— — — — 369 — 369 Conversion/release of stock-based awards120 — (2,322)— — — (2,322)Repurchases of common stock(1,120)(11)(5,921)(195,379)— — (201,311)Stock-based compensation expense— — 23,958 — — — 23,958 Dividends declared— — — (54,305)— — (54,305)Balance at October 31, 202173,326 $734 $585,449 $963,840 $(5,942)$(711)$1,543,370 For the Thirty-nine Weeks Ended(In thousands)October 30, 2022October 31, 2021Cash flows from operating activities:Net earnings$772,911 $723,396 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:Depreciation and amortization157,410 145,897 Loss on disposal/impairment of assets5,738 887 Amortization of deferred lease incentives(2,442)(3,345)Non-cash lease expense169,602 159,757 Deferred income taxes(10,494)(11,440)Tax benefit related to stock-based awards11,172 10,838 Stock-based compensation expense67,797 70,566 Other272 4 Changes in:Accounts receivable5,288 4,941 Merchandise inventories(443,812)(264,094)Prepaid expenses and other assets(39,737)(10,078)Accounts payable98,103 74,181 Accrued expenses and other liabilities(34,157)24,400 Gift card and other deferred revenue42,005 58,189 Operating lease liabilities(177,855)(164,569)Income taxes payable(33,276)(31,191)Net cash provided by operating activities588,525 788,339 Cash flows from investing activities:Purchases of property and equipment(234,378)(141,010)Other100 97 Net cash used in investing activities(234,278)(140,913)Cash flows from financing activities:Repurchases of common stock(840,955)(652,699)Payment of dividends(165,254)(135,201)Tax withholdings related to stock-based awards(80,431)(102,482)Repayment of long-term debt— (300,000)Debt issuance costs— (777)Net cash used in financing activities(1,086,640)(1,191,159)Effect of exchange rates on cash and cash equivalents(4,887)294 Net decrease in cash and cash equivalents(737,280)(543,439)Cash and cash equivalents at beginning of period850,338 1,200,337 Cash and cash equivalents at end of period$113,058 $656,898 In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The ASU is intended to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The guidance provides optional expedients and scope exceptions for transactions if certain criteria are met. These transactions include contract modifications, hedge accounting, and the sale or transfer of debt securities classified as held-to-maturity. We may elect to apply the provisions of the new standard prospectively through December 31, 2022. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. We have yet to elect an adoption date, but do not believe the adoption would have a material impact on our financial condition, results of operations or cash flows. (In thousands, except per share amounts)Net EarningsWeightedAverage SharesEarningsPer ShareThirteen weeks ended October 30, 2022Basic$251,723 66,704 $3.77 Effect of dilutive stock-based awards913Diluted$251,723 67,617$3.72 Thirteen weeks ended October 31, 2021Basic$249,524 74,010 $3.37 Effect of dilutive stock-based awards1,933 Diluted$249,524 75,943$3.29 Thirty-nine weeks ended October 30, 2022Basic$772,911 68,578 $11.27 Effect of dilutive stock-based awards1,204 Diluted$772,911 69,782 $11.08 Thirty-nine weeks ended October 31, 2021Basic$723,396 74,865 $9.66 Effect of dilutive stock-based awards2,110 Diluted$723,396 76,975 $9.40 For the Thirteen Weeks Ended 1For the Thirty-nine Weeks Ended 1(In thousands)October 30, 2022October 31, 2021October 30, 2022October 31, 2021Pottery Barn$935,045 $788,732 $2,588,798 $2,200,110 West Elm599,802 579,668 1,744,013 1,636,621 Williams Sonoma261,820 272,361 762,651 793,423 Pottery Barn Kids and Teen299,112 316,417 810,243 826,421 Other 296,795 90,361 315,633 288,332 Total 3$2,192,574 $2,047,539 $6,221,338 $5,744,907 1Includes business-to-business net revenues within each brand.2Primarily consists of net revenues from Rejuvenation, our international franchise operations and Mark and Graham.3Includes net revenues related to our international operations (including our operations in Canada, Australia, the United Kingdom and our franchise businesses) of approximately $94.7 million and $93.1 million for the thirteen weeks ended October 30, 2022 and October 31, 2021, respectively, and approximately $303.0 million and $309.1 million for the thirty-nine weeks ended October 30, 2022 and October 31, 2021, respectively. 1Includes total goodwill, deferred tax assets and intangibles of $150.0 million and $157.2 million as of October 30, 2022 and October 31, 2021, respectively, of which $137.7 million and $145.7 million, respectively, is related to the U.S. We have retail and e-commerce businesses in Canada, Australia and the United Kingdom, and operations throughout Asia and Europe, which expose us to market risk associated with foreign currency exchange rate fluctuations. Substantially all of our purchases and sales are denominated in U.S. dollars, which limits our exposure to this risk. However, some of our foreign operations have a functional currency other than the U.S. dollar. To mitigate this risk, we hedge a portion of our foreign currency exposure with foreign currency forward contracts in accordance with our risk management policies. We do not enter into such contracts for speculative purposes. The assets or liabilities associated with the derivative financial instruments are measured at fair value and recorded in either other current assets or other current liabilities. As discussed below, the accounting for gains and losses resulting from changes in fair value depends on whether the derivative financial instrument is designated as a hedge and qualifies for hedge accounting in accordance with ASC 815, Derivatives and Hedging. (In thousands)Foreign CurrencyTranslationCash FlowHedgesAccumulated OtherComprehensiveIncome (Loss)Balance at January 30, 2022$(10,886)$58 $(10,828)Foreign currency translation adjustments(1,514)— (1,514)Change in fair value of derivative financial instruments— 93 93 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1— (18)(18)Other comprehensive income (loss)(1,514)75 (1,439)Balance at May 1, 2022$(12,400)$133 $(12,267)Foreign currency translation adjustments(1,385)— (1,385)Change in fair value of derivative financial instruments— 26 26 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1— (5)(5)Other comprehensive income (loss)(1,385)21 (1,364)Balance at July 31, 2022$(13,785)$154 $(13,631)Foreign currency translation adjustments(5,158)— (5,158)Change in fair value of derivative financial instruments— 1,069 1,069 Reclassification adjustment for realized (gain) loss on derivative financial instruments1— (128)(128)Other comprehensive income (loss)(5,158)941 (4,217)Balance at October 30, 2022$(18,943)$1,095 $(17,848)Balance at January 31, 2021$(6,398)$(719)$(7,117)Foreign currency translation adjustments3,700 — 3,700 Change in fair value of derivative financial instruments— (665)(665)Reclassification adjustment for realized (gain) loss on derivative financial instruments 1— 153 153 Other comprehensive income (loss)3,700 (512)3,188 Balance at May 2, 2021$(2,698)$(1,231)$(3,929)Foreign currency translation adjustments(3,522)— (3,522)Change in fair value of derivative financial instruments— 65 65 Reclassification adjustment for realized (gain) loss on derivative financial instruments 1— 337 337 Other comprehensive income (loss)(3,522)402 (3,120)Balance at August 1, 2021$(6,220)$(829)$(7,049)Foreign currency translation adjustments792 — 792 Change in fair value of derivative financial instruments— (54)(54)Reclassification adjustment for realized (gain) loss on derivative financial instruments1— 369 369 Other comprehensive income (loss)792 315 1,107 Balance at October 31, 2021$(5,428)$(514)$(5,942) We have customer loyalty programs, which allow members to earn points for each qualifying purchase. Customers can earn points through spend on both our private label and co-branded credit cards, or can earn points as part of our non-credit card related loyalty program. Points earned through both loyalty programs enable members to receive certificates that may be redeemed on future merchandise purchases. This customer option is a material right and, accordingly, represents a separate performance obligation to the customer. The allocated consideration for the points or certificates earned by our loyalty program members is deferred based on the standalone selling price of the points and recorded within gift card and other deferred revenue within our Condensed Consolidated Balance Sheet. The measurement of standalone selling prices takes into consideration the discount the customer would receive in a separate transaction for the delivered item, as well as our estimate of certificates expected to be issued and redeemed, based on historical patterns. This measurement is applied to our portfolio of performance obligations for points or certificates earned, as all obligations have similar economic characteristics. We believe the impact to our Condensed Consolidated Financial Statements would not be materially different if this measurement was applied to each individual performance obligation. Revenue is recognized for these performance obligations at a point in time when certificates are redeemed by the customer. These obligations relate to contracts with terms less than one year, as our certificates generally expire within six months from issuance. This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our business and results of operations to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include statements related to: supply chain challenges; backorder levels and inventory constraints; the continuing impact of the COVID-19 pandemic on our business, results of operations and financial condition; our revenue growth; expanding our sales and operating margin; the impact of inflation and measures to control inflation on consumer spending; our strategic initiatives; our beliefs regarding customer behavior and industry trends; our merchandise strategies; our growth strategies for our brands; our beliefs regarding the resolution of current lawsuits, claims and proceedings; our stock repurchase program; our expectations regarding our cash flow hedges and foreign currency risks; our planned use of cash, including our commitment to continue or increase quarterly dividend payments; our future compliance with the financial covenants contained in our credit facility; our belief that our cash on-hand, in addition to our available credit facility, will provide adequate liquidity for our business operations over the next 12 months; our beliefs regarding our exposure to foreign currency exchange rate fluctuations; and our beliefs regarding seasonal patterns associated with our business, as well as statements of belief and statements of assumptions underlying any of the foregoing. You can identify these and other forward-looking statements by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” or the negative of such terms, or other comparable terminology. The risks, uncertainties and assumptions referred to above that could cause our results to differ materially from the results expressed or implied by such forward-looking statements include, but are not limited to, those discussed under the heading “Risk Factors” in this document and our Annual Report on Form 10-K for the year ended January 30, 2022, and the risks, uncertainties and assumptions discussed from time to time in our other public filings and public announcements. All forward-looking statements included in this document are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements. For the Thirteen Weeks Ended 1For the Thirty-nine Weeks Ended 1Comparable brand revenue growth (decline)October 30, 2022October 31, 2021October 30, 2022October 31, 2021Pottery Barn19.6 %15.9 %18.7 %27.5 %West Elm4.2 22.5 7.3 39.5 Williams Sonoma(1.5)7.6 (1.1)15.1 Pottery Barn Kids and Teen(4.8)16.9 (1.0)20.2 Total 28.1 %16.9 %9.6 %27.7 %1 Comparable brand revenue includes business-to-business revenues within each brand.2 Total comparable brand revenue growth includes the results of Rejuvenation and Mark and Graham. Store CountAverage Leased SquareFootage Per StoreJuly 31, 2022OpeningsClosingsOctober 30, 2022October 31, 2021October 30, 2022October 31, 2021Pottery Barn189 2 (2)189 195 14,800 14,500 Williams Sonoma175 — — 175 194 6,800 6,800 West Elm121 2 (1)122 121 13,200 13,100 Pottery Barn Kids52 — — 52 57 7,700 7,800 Rejuvenation9 — — 9 10 9,400 8,700 Total546 4 (3)547 577 11,100 10,900 Store selling square footage at period-end3,879,000 3,978,000 Store leased square footage at period-end6,088,000 6,263,000 1Includes total occupancy expenses of $202.3 million and $183.1 million for the third quarter of fiscal 2022 and the third quarter of fiscal 2021, respectively, and $581.7 million and $534.8 million for the first thirty-nine weeks of fiscal 2022 and the first thirty-nine weeks of fiscal 2021, respectively. ExhibitNumberExhibit Description31.1Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended31.2Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended32.1Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101*The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 30, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Earnings, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted under Exhibit 101). More