William-Sonoma Inc. beat a Wall Street profit estimate in its second quarter, but comparable sales were down across its retail banners, with Pottery Barn taking the biggest comp hit.
Net earnings were $225.7 million, or $1.74 per diluted share, versus $201.5 million, or $1.56 per diluted share, in the year-prior quarter, the company reported.
A Yahoo Finance-published analyst consensus estimate called for earnings of $1.60 per diluted share and revenues of $1.81 billion.
Comparable banner revenue slipped 3.3% in the quarter year over year with Pottery Barn down 7.1%, West Elm down 4.8%, Williams Sonoma down 0.8% and Pottery Barn Kids and Teen up 1.5%.
Net revenues were $1.79 billion versus $1.86 billion in the year-before quarter, Williams-Sonoma noted. Operating income was $289.9 million versus $271.5 million in the period a year previous.
On July 9, the company effected a 2-for-1 split of its common stock through a dividend, and the company retroactively adjusted all historical share and per share amounts in its financial reporting to reflect the stock split.
Laura Alber, Williams-Sonoma president and CEO, said in a conference call the “back half acceleration we expected” may not kick in because of consumer uncertainty and the soft housing market. As the company moves through the year’s back half, Alber said, it will drive the business through application of its in-house design operations, vertical sourcing capacity, product innovation capabilities and provision of newness across brands, with goods offered “at compelling price points.” The company also has been expanding online content and providing more inspiration in the shopping path to boost conversion. As the year winds down, Williams-Sonoma plans to promote its ability to help consumers cook and entertain for the late-year holidays, Alber said.
In announcing the financial results, Alber said, “Today we are reporting strong results for the second quarter of 2024, which were driven by our Q2 improved top-line trend, market-share gains and continued delivery on our commitment to profitability. In Q2, our comp came in at minus 3.3%, and we exceeded profitability estimates with an operating margin of 16.2% and earnings per share of $1.74, reflecting the 2-for-1 stock split we completed in July.”
