Williams-Sonoma record earnings growth a good economic sign

SAN FRANCISCO -- In what can only be a sign that the economic health of the country is improving -- at least for for higher-income consumers, Williams-Sonoma announced that net revenues for the fourth quarter of 2010 increased 9.7% to $1.195 billion versus $1.09 billion in the fourth quarter of 2010, including Internet net revenue growth of 27.2% and a comparable-store sales increase of 5.2%.

Diluted earnings per share on a GAAP basis were $1.05 for the quarter compared with 81 cents for the same period last year.

Laura Alber, president and CEO, commented, “Fiscal 2010 was a record earnings year for Williams-Sonoma, Inc. Each of our brands is stronger today than a year ago and we made substantial progress on our longer term growth and profitability initiatives. We are particularly pleased with the progress we made in merchandising, marketing, customer acquisition, and customer service, as it is these competitive advantages that allowed us to attract new customers to our brands and gain profitable market share all year, including Internet revenue growth of 27%.”

Going forward, Alber said she expects growth in the company's e-commerce business.

"In fiscal 2011, we expect e-commerce to once again be our most profitable and fastest growing channel. As such, our direct-to-customer segment is expected to reach 43% of total company revenues in fiscal 2011 versus 41% in fiscal 2010."

Williams-Sonoma reported that net revenues for the 2010 fiscal year increased 12.9% to $3.5 billion versus $3.1 billion last year, including Internet net revenue growth of 26.9% and a comparable-store sales increase of 9.8%. Diluted earnings per share on a GAAP basis were$1.83 compared with72 cents for the same period last year.

For fiscal2011, the company is expecting non-GAAP diluted earnings per share increasing in the range of 8% to 12% and net revenues increasing in the range of 4% to 6%.

Williams-Sonoma's strong fourth quarter and full year results are a good indication that consumers are feeling more confident and discretionary spending is up.