Williams-Sonoma Inc. (NYSE:WSM)

The analysis of the annual property, plant, and equipment data reveals several notable trends across categories from fiscal year 2019 through fiscal year 2024.

Capitalized Software

This asset category shows a consistent upward trajectory from 2019 to 2023, rising from approximately $734 million to nearly $1.1 billion, indicating increasing investment in software assets. However, in 2024, there is a slight decline to about $1.05 billion, suggesting a slowdown or stabilization in capitalized software expenditures.

Leasehold Improvements

Leasehold improvements remain relatively stable around $880 million to $950 million over the period. A mild decline is observed starting 2020, dropping from about $947 million to approximately $880 million by 2024, reflecting potential reductions in leasing-related capital expenditures or write-downs.

Fixtures and Equipment

Fixtures and equipment show minor fluctuations, generally hovering around $830 million to $930 million until 2023. Notably, in 2024, there is a pronounced decrease to roughly $789 million, which may indicate asset disposals, accelerated depreciation, or constraints on new investments in these areas.

Land and Buildings

This category exhibits a steady, incremental increase each year, growing from approximately $175 million in 2019 to about $181 million in 2024, suggesting ongoing, albeit modest, investments or appreciation in land and building assets.

Construction in Progress

Construction in progress shows high volatility with values under $10 million until 2021, followed by substantial growth in 2022 to over $61 million and peaking at around $93 million in 2024. This sharp rise indicates significant ongoing projects or capital development efforts underway in recent years.

Corporate Systems Projects in Progress

Corporate systems projects in progress peak in 2020 at nearly $62 million, then gradually decline to about $32 million by 2024. This suggests a reduction or completion of corporate system projects under development during this period.

Property and Equipment, Gross

The gross property and equipment value trends upward from $2.74 billion in 2019 to a peak of approximately $3.22 billion in 2023, followed by a decrease to about $3.02 billion in 2024. This pattern correlates with movements in the underlying asset categories, notably the reduction in certain asset groups in the latest year.

Accumulated Depreciation

Accumulated depreciation consistently increases in magnitude (more negative), from around negative $1.81 billion in 2019 to a peak negative value of approximately $2.15 billion in 2023, indicating ongoing depreciation charges. Interestingly, in 2024 it decreases in absolute terms to about negative $2.01 billion, potentially reflecting asset retirements or adjustments.

Property and Equipment, Net

Net property, plant, and equipment values fluctuate over the period; remaining almost flat from 2019 through 2020 around $929 million, then declining to approximately $874 million in 2021. This is followed by a recovery and growth to roughly $1.07 billion in 2023 before a slight reduction to about $1.01 billion in 2024. The overall trend suggests prudent asset management with periods of reinvestment and asset disposal balancing net book values.

In summary, the property, plant, and equipment data reveal steady investments in technology assets such as capitalized software, ongoing development projects evident in construction in progress, and relatively stable land and building values. Offsetting these increases are moderate declines or fluctuations in leasehold improvements and fixtures and equipment. The accumulated depreciation pattern aligns with asset aging, but reduced depreciation in 2024 hints at possible asset disposals. Net property and equipment reflect these dynamics with a general growth trend tempered by recent contractions.

Average Age Ratio

The average age ratio of property, plant, and equipment demonstrates a generally stable trend over the six-year period from early 2019 to early 2024.

Starting at 66.1% in early 2019, the ratio increased gradually to a peak of 69.13% by early 2022. This indicates a slight aging of the asset base during this timeframe, suggesting that the company may have relied more on existing assets rather than acquiring new ones.

Following this peak, a modest decline is observed, with the ratio decreasing to 66.49% by early 2024. This reduction suggests some level of renewal or replacement of assets, leading to a younger asset pool relative to total property, plant, and equipment.

Overall, the data indicates a phase of aging assets up to 2022, followed by a stabilization and marginal rejuvenation in the most recent periods.

Property and equipment, gross

The gross value of property and equipment exhibited a fluctuating upward trend over the analyzed period. Starting at approximately $2.74 billion in early 2019, it increased gradually to about $3.22 billion by early 2023. However, a decline to roughly $3.02 billion was observed in early 2024, indicating a potential reduction in asset acquisitions or disposals during the latest year.

Accumulated depreciation

Accumulated depreciation showed a general increasing trend from about $1.81 billion in early 2019 to a peak near $2.15 billion in early 2023. Interestingly, in early 2024, this value declined to approximately $2.01 billion. Typically, accumulated depreciation rises over time reflecting asset aging and usage, thus this reduction may point to asset retirements, adjustments, or impairment.

Average age ratio

The average age ratio, expressed as a percentage, initially increased from 66.1% in 2019 to around 69.13% by early 2022, suggesting a moderate aging of the asset base. Thereafter, it decreased gradually to 66.49% by early 2024, which may signify recent asset additions or replacements resulting in a relatively younger property and equipment portfolio.