Earnings, revenue fall at Williams-Sonoma in Q2

Williams-Sonoma Inc. exceeded Wall Street expectations for earnings per share (EPS) even as its profits and sales declined in the second quarter of fiscal 2023.

The home furnishings retailer reported EPS of $3.12, down from $3.87 in the second quarter of fiscal 2022 but well higher than the consensus estimate of $2.72. Net earnings were $201.5 million, a 25% year-over-year decline from $267.07 million.

Williams-Sonoma had net revenues of $1.86 billion, down 13% year-over-year from $2.14 billion. Comparable brand revenue fell 11.9% from the prior-year period.

“We are pleased to deliver another quarter of strong earnings,” said Laura Alber, president and CEO. “We significantly exceeded profitability estimates with an operating margin of 14.6% with earnings per share of $3.12, well-above our pre-pandemic results. Our sales ran -11.9% in Q2, but our two-year comp was essentially flat, and our four-year comp to 2019 was +39.7%. We achieved these results against an increasingly promotional environment and softening industry metrics by focusing on regular price selling, driving improved customer service and controlling costs,”

Williams-Sonoma is revising its fiscal 2023 guidance to reflect lower net revenue trends and higher operating margin expectations. The company now expects a net revenue decline in the range of -5% to -10% with an operating margin between 15% to 16%.

Over the long-term, the retailer continues to expect mid-to-high single-digit annual net revenue growth, with operating margin above 15%.

[Read more: Pottery Barn Kids, Pottery Barn Teen roll out next-gen e-commerce apps]

Williams Sonoma products — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, and GreenRow — are marketed through e-commerce websites, direct-mail catalogs and retail stores. These brands are also part of The Key Rewards, the company’s loyalty and credit card program that offers members benefits across the Williams-Sonoma portfolio of brands.

Based in San Francisco, Williams Sonoma operates in the U.S., Puerto Rico, Canada, Australia and the U.K., with international shipping to customers worldwide. Unaffiliated franchisees operate stores in the Middle East, the Philippines, Mexico, South Korea and India, as well as e-commerce websites in certain locations.