Williams-Sonoma posted a double-digit comparable sales gain and a big earnings advance in its second quarter.
Williams-Sonoma net earnings were $267.1 million, or $3.87 per diluted share versus $246.1 million, or $3.21 per diluted share, in the year-previous period. Adjusted for one-time events, the company reported, diluted earnings per share were $3.87 versus $3.24 in the year-before quarter.
Williams-Sonoma topped a MarketBeat-published adjusted diluted earnings per share estimate of $3.47 and a revenue estimate of $2.03 billion.
Company comparable sales gained 11.3%, with Pottery Barn up 21.5%, West Elm up 6.1%, Pottery Barn Kids and Teen up 5.3%, and Williams Sonoma up 0.5%, the company noted.
Net revenue was $2.14 billion versus $1.95 billion in the year-prior quarter. Operating income was $365.5 million versus 323.1 million in the year-earlier period.
In a conference call, Laura Alber, Williams-Sonoma president and CEO, credited the company’s digital-first-but-not-digital-only channel strategy for giving operations a competitive edge which will continue as Williams-Sonoma scales the business into the future as compared to retail and marketplace-only players. She said the company will take market share in part because of key differentiators, including in-house design capabilities that produce exclusive, sustainable and high-quality products at compelling price points.
Alber said the Pottery Barn banner continues to innovate in terms of both product and incremental growth initiatives. In July, it launched The Accessible Home, a new concept designed to enhance the quality of domestic life for an aging-in-place community and people living with disabilities and injury.
Williams Sonoma banner gains came from an improved in-stock position, newness in the assortment and higher conversion on the site driven by ongoing e-commerce initiatives that improved imagery and shop path, Alber said. She added the Williams-Sonoma Home business had a high double-digit comp in the second quarter and continues to be an opportunity. West Elm has launched new businesses in kids and bath that continue to drive outsized growth for the brand, Alber said. West Elm has launched a dedicated B2B e-commerce operated and expanded assortment. She said West Elm has three particular factors that should produce immediate gains: improved furniture in-stocks and lead time reductions, an expanding depth in the seasonal decorating, hosting and entertainment categories, and innovative collaborations across the brand.
The Pottery Barn children’s home furnishing business, Alber noted, delivered a sequentially stronger quarter benefiting from improving inventory receipts out of Vietnam, the rollout of the operation’s biggest ever back-to-school collection and the ability to ship dorm products to any store in any Willams-Sonoma brand. She added early results indicate the seasonal holiday business will be a success given an early positive reaction to Halloween.
In announcing the financial results, Alber, said, “The second quarter marks another quarter of strong performance, delivering an 11.3% comp on the top line and earnings growth of over 19% to $3.87 per share. These impressive results reflect the strength of our multi-brand portfolio, the success of our growth initiatives, and the ongoing execution of the team. We continue to demonstrate our ability to perform by offering high-quality, differentiated and sustainable products that our customers know and love. Our performance was driven by strong order fulfillment, positive demand comps, and our successful continued elimination of site-wide promotions. I am very proud of this performance especially given the macroeconomic backdrop and the strong compares we were up against, all while delivering an impressive 41.1% comp on a two-year basis. And it is this continued outperformance that gives us the confidence to reiterate our 2022 guidance and longer-term outlook today.”
