Williams-Sonoma raised guidance after enjoying substantial Q3 gains across all its retail nameplates.
Net earnings were $249.5 million, or $3.29 per diluted share, versus $201.8 million, or $254 per diluted share, in the year-earlier quarter.
Adjusted for one-time events, diluted earnings per share were $3.32 per diluted share versus $2.56 per diluted share in the year-prior period.
Williams-Sonoma topped a MarketBeat-published analyst consensus estimate for diluted earnings per share of $3.14 and for revenues of $1.98 billion.
The company posted comparable brand revenue growth of 16.9%, with West Elm at 22.5%, Pottery Barn at 15.9%, Pottery Barn Kids and Teen at 16.9%, and Williams Sonoma at 7.6%.
Net revenues were $2.05 billion versus $1.76 billion in the year-previous quarter. Operating income was $330.3 million versus $274.6 million in the year-before period while adjusted operating income was $333 million versus $276.8.
In a conference call, Laura Alber, Williams-Sonoma president and CEO, said particularly strong performers at West Elm were upholstery, best sellers in the bedroom, dining and occasional categories, and new segments such as Bass, and Kids and Kitchens while all product categories contributed to gains at Pottery Barn, with seasonal decorating a standout. At Pottery Barn Kids and Teens, GREENGUARD Gold-certified furniture was strong as were the baby business and holiday and gifting, with Halloween products driving record results. Williams-Sonoma got solid results from all key categories with Thanksgiving and holiday items conspicuously strong.
Alber said that despite supply constraints in some categories, such as kids merchandise out of Vietnam, 85% of Williams-Sonoma’s holiday receipts had been received, adding that when delays crop up, customer service is the priority, resulting in escalation, cancellation and care center call declines.
“We are extremely proud to deliver yet another quarter of outperformance with comps of 16.9%, building to an accelerated two-year stack of 41.3%, and operating margin expansion of 60 basis points,” Alber said in announcing the financial results. “These results are a function of both the advantages of our distinctive positioning in the market and our successful execution against our long-term growth strategies. Furthermore, our performance demonstrates that we can continue to take share in a fractured market, and deliver high-quality, sustainable earnings. As a result, we are raising our full-year outlook to reflect revenue growth of 22% to 23% and operating margins of 16.9% to 17.1%. As we enter the fourth quarter, we are seeing strong sales and margins continuing. We are thrilled with our customers’ response to our holiday and gifting assortments, and we are ready to drive an outstanding finish to the year. With our strong results to date, our winning positioning in the industry, and are outperforming growth strategies, we are more confident than ever in the long-term strength of our business.”
