We're thrilled to deliver a strong finish to fiscal 2021, driving record results with a Q4 comp of 10.8% and operating margin expansion of 310 basis points.
This resilience, coupled with continued execution in our growth initiatives, fueled an annual comp of 22%, operating margin expansion of 350 basis points, and earnings per share growth of 64% to $14.85 per share.
In fact, we delivered gross margin expansion of 290 basis points in the quarter.
We drove operating margin of 21% and a 37% increase in EPS, both of which demonstrate the durability of our earnings power through execution in our core and growth initiatives, which I'm excited to update you on now.
Our B2B business continues to outperform, building its book of business to $753 million in 2021.
During 2021, global achieved record revenue up 23% over last year with strong earnings growth.
In fiscal '21, approximately 60% of our sales came from cross-brand customers, a record high in terms of percent to total.
21 on Barron's 100 Most Sustainable Companies, and receiving an A rating from CDP for leadership in supplier engagement and our work with suppliers on tackling climate change.
West Elm delivered an 18.3% comp in the fourth quarter with all categories driving strong growth.
On the full year, West Elm delivered a comp of 33.1%, building to a 48.3% on a two-year basis and continuing to build velocity in its mission to become a $3 billion brand.
Pottery Barn delivered another high-performance quarter with a 16.2% comp, driven by strong core franchises in key categories.
On the full year, Pottery Barn celebrated a record year with a comp of 23.9%, building to a 39.1% on a two-year basis.
Also, we're delighted to report that Pottery Barn has surpassed the halfway mark on its commitment to plant 3 million trees in three years to restore vulnerable forests.
And even better, based on the tremendous success of this program, our other brands have joined the effort, doubling our commitment to planting 6 million trees by 2023.
In particular, the shutdown in related backlogs from Vietnam had a larger impact on our children's home furnishings business, which ran a negative 6.1% comp for the quarter.
Pottery Barn Kids and Teen delivered a full year comp of 11.6%, building to a 28.2% on a two-year basis.
Our Williams-Sonoma business drove a fourth quarter comp of 4.5% on top of a 26.2% comp last year, with growth driven by demand for entertaining at home and gift-giving.
On the full year, Williams-Sonoma delivered a comp of 10.5%, building to a 34.3% on a two-year basis.
And as we look further, we are confident in our long-term outlook, driving at least mid- to high single-digit comps with top-line growth to $10 billion by 2024 and operating margins relatively in line with fiscal 2021.
Net revenues surpassed $2.5 billion with another quarter of double-digit comparable brand revenue growth at 10.8%.
These strong top-line results were across both channels, including retail at a 20% comp and e-commerce at a 7.2% comp on top of last year's 47.9% for a 55.1% two-year stack.
By brand, West Elm delivered an 18.3% comp on top of 25.2% last year.
Pottery Barn accelerated from the third quarter to a 16.2% comp.
Williams-Sonoma drove a 4.5% comp on top of last year's 26.2%.
And our emerging brands accelerated to a 30.3% comp.
In the children's home furnishings businesses, Pottery Barn Kids and Teen, comps were a negative 6.1%.
This is below their third quarter year-to-date trend of approximately 20% as these brands were the most impacted during the fourth quarter by the supply chain issues from the COVID-related closure of Vietnam.
Gross margin came in at a record 45%, a 290-basis-point expansion over last year.
The strength of our merchandise margins drove almost all or 270 basis points of this expansion.
Occupancy costs at 7.7% of net revenues leveraged approximately 20 basis points, resulting from another quarter of higher sales and lower occupancy dollar growth.
Occupancy dollars increased 6.7% to approximately $193 million, which includes a full quarter of incremental costs from our new East Coast distribution center to further support our customer demand, partially offset by our ongoing retail optimization efforts from additional store closures and reduced rent.
In fiscal year '21, we closed an additional 37 stores and are on track to close approximately 25% of our total retail fleet.
SG&A also leveraged 20 basis points to a historical low of 24% despite absorbing higher year-over-year advertising costs from our reduced spend last year.
As a result, we delivered another quarter of record profitability with operating income growth of 28% to $525 million and our highest ever operating margin at 21%, expanding 310 basis points over last year and approximately 500 basis points higher than our last three quarters this year.
This resulted in diluted earnings per share of $5.42, up 37% from last year's record fourth quarter earnings per share of $3.95.
On the top line, these full year highlights include an additional $1.5 billion in net revenues, growing to over $8.2 billion, including comparable brand revenue growth of 22% on top of last year's 17% or a 39% two-year stack; e-commerce growing to a 14.3% comp and a 58.8% two-year comp with our e-commerce mix at 66% of total revenues; retail growing at a 43.2% comp despite traffic levels at negative 16% to 2019; a second consecutive year of double-digit growth across all brands with significant acceleration across our two largest brands, with West Elm at a 33.1% comp, Pottery Barn at a 23.9% comp, Williams-Sonoma at a 10.5% comp on top of last year's 23.8%; our emerging brands, Rejuvenation and Mark and Graham combined, delivering another year of accelerating double-digit growth; our global business growing 23% to over $425 million; and our cross-brand initiatives outperforming with our business-to-business division growing 109% to over $750 million in demand and contributing approximately 500 basis points to our total company comp.
On the bottom line, this top-line strength and strong financial discipline throughout enabled us to grow 2021 operating income to $1.5 billion, over $0.5 billion and 52% higher than last year.
Operating margin at 17.7% on the year expanded 350 basis points over last year and was more than two times higher than our 2019 and prior operating margin levels.
This was driven by gross margins expanding to record levels or 500 basis points above last year to 44% despite increased costs associated with supply chain disruptions throughout the year.
This operating income strength resulted in earnings per share of $14.85, which was $5.81 or 64% above last year and drove our return on invested capital to an all-time high at 57.9%.
On the balance sheet, we ended the year with strong liquidity levels with a cash balance of $850 million and no debt or amounts outstanding on our line of credit.
The strength of our business generated operating cash flow of almost $1.4 billion during fiscal year 2021, which has allowed us to fund the operations of the business, to invest over $225 million in capital expenditures primarily in technology and supply chain, and to return nearly $1.1 billion to shareholders in the form of $188 million in dividends and 900 million in share repurchases.
Merchandise inventories were $1.246 billion, increasing 24% over last year, which includes inventory in transit.
Inventory on hand increased 14.8% but was still negative 13% on a two-year basis.
We estimate revenues will reach $10 billion by fiscal year 2024, with our brands accelerating or reaching our prior committed targets faster, including Pottery Barn expanding to $3.5 billion in revenues; West Elm adding $1 billion in revenues to over $3.3 billion; Williams-Sonoma will reach almost $1.6 billion in revenues, and our Pottery Barn Kids and Teen businesses will grow to $1.4 billion.
This expected top-line growth will also be fueled by growth across our strategic initiatives, such as our B2B business doubling to $1.5 billion in revenues, our marketplace business growing 20% annually to nearly $700 million, our emerging brands expanding to a combined revenue of over $600 million, and our global operations continuing to expand in size to $700 million.
We expect to invest approximately $350 million in the business, with over 80% of the spend prioritized on technology and supply chain initiatives primarily to support e-commerce, including the addition of a new automated distribution center in Arizona.
For dividends, we announced earlier today another double-digit increase in our quarterly dividend, up 10% or $0.07 to $0.78 per share.
We also announced our Board has approved a new share repurchase authorization to $1.5 billion, which will replace the remaining amount outstanding under our prior authorization.

Summary:
We're thrilled to deliver a strong finish to fiscal 2021, driving record results with a Q4 comp of 10.8% and operating margin expansion of 310 basis points.
Net revenues surpassed $2.5 billion with another quarter of double-digit comparable brand revenue growth at 10.8%.
This resulted in diluted earnings per share of $5.42, up 37% from last year's record fourth quarter earnings per share of $3.95.