Williams-Sonoma delivers impressive Q2

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Williams-Sonoma delivers impressive Q2

By Marianne Wilson - 08/23/2018
Williams-Sonoma reported better-than-expected earnings and sales, fueled by strong performances by its West Elm brand, digital channel and growth across all its brands.

The home furnishings giant reported net income of $51.7 million, or 62 cents a share, for the period ended July 30, compared with $52.9 million, or 61 cents a share, in the year-ago period. Adjusted earnings were 77 cents a share. Analysts had estimated 68 cents a share.

Net revenue increased 6.1% to $1.275 billion. E-commerce net revenues increased 8.9% to $687 million. Analysts had forecast revenue of $1.26 billion.

Total same-store sales rose 4.6%. By brand, same-store sales increased 9.5% at West Elm, 5.7% at Pottery Barn Kids and Teens, 2% at Pottery Barn and 1.6% at Williams-Sonoma. On the company’s call with investors, Williams-Sonoma CEO and president Laura Alber noted that West Elm debuted a new format in Santa Monica, California, that is off to a “strong start.” The next-generation store has an expanded outdoor living area that displays a wide range of outdoor collections and more open space for community engagement.

Williams-Sonoma’s e-commerce growth has been fueled by investments in augmented reality, digital advertising and other digital technologies. The company is also investing in its store base.

“Our stores are a key part of our multi-channel strategy as they provide an incomparable experience to our customers to engage with our products in real life,” Alber said on the call.

The company will open four stores in the third quarter, including a new Rejuvenation location. The brand “continues to expand in the high-end lighting and hardware market and is on track to becoming a significant multichannel lifestyle brand,” Alber said.

Williams-Sonoma raised its full-year earnings guidance to $4.26 to $4.36 a share from $4.15 to $4.25 a share. The Street had expected earnings of $4.24 a share.

“Our powerful multi-channel, multi-brand platform, together with our strong execution of our strategic initiatives in digital leadership, product innovation, retail transformation and operational excellence are having a positive impact on all parts of our business,” Alber stated. “Given the results in the first half and the momentum our initiatives are creating, we are raising our full-year guidance for net revenues, comp revenue growth, operating margin and EPS.”

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