Despite lower comparable sales, Williams-Sonoma beat Wall Street earnings and revenue estimates, and the company noted that newness at its stores has helped position it for the holidays.
Net earnings of $249 million, or $1.96 per diluted share, versus $237.3 million, or $1.83 per diluted share, in the year-previous quarter, the company reported.
A Zacks Investment Research analyst consensus estimate called for earnings of $1.76 per diluted share and revenues of $1.77 billion.
Comparable banner revenue declined 2.9%%in the quarter year over year, with Pottery Barn down 7.5%, West Elm down 3.5%%, Williams Sonoma down 0.1%, and Pottery Barn Kids and Teen up 3.8%.
Net revenues were $1.8 billion versus $1.85 billion in the year-before quarter, Williams-Sonoma noted. Operating income was $320.6 million versus $315.1 million in the period a year past.
Laura Alber, Williams-Sonoma president and CEO, said in a conference call that the company was emphasizing newness for the holidays, and early reads suggest consumers are responding to fresh merchandise as well goods that have merged from collaborations, including those with celebrities and topic experts. As for product launches, she called out the successful rollout of the Evergreen Kitchen Aid stand mixer at the Williams Sonoma banner.
In announcing the financial results, Alber said, “We are pleased with the results of our third quarter, beating both top and bottom-line expectations. The quarter was driven by continued improvement in our sales trend, market-share gains and strong profit. In Q3, our comp came in at minus 2.9%, with an operating margin of 17.8%, delivering a 7.1% increase in earnings per share to $1.96. Our operating results reflect the operational improvements that we have been focused on all year and demonstrate the strength of our margin profile in a difficult environment. Our strategy of focusing on returning to growth, enhancing our world-class customer service and driving margin is working. And, as we head into the last quarter of the year, we are optimistic and confident about our business. The fourth quarter is the time of year when we shine. Therefore, we are raising our full-year guidance. We now expect full-year revenues to come in at a range of down 3% to down 1.5%, and we are raising our guidance on operating margin 40 bps to be in the range of 17.8% to 18.2%.”
