Williams-Sonoma reported better-than-expected sales and earnings as consumers continued to invest in their homes amid the pandemic and provided an upbeat outlook for the current year.
The retailer, whose banners also include Williams-Sonoma, Pottery Barn and West Elm, said its online sales rose 47.9% and accounted for 70% of total net revenue in the quarter.
Williams-Sonoma posted net income of $309 million, or $3.92 per share, in the quarter ended Feb. 2, up from $166 million, or $2.10 per share, in the year-ago period. Excluding items, earnings were $3.95 per share, topping the $3.39 that analysts had forecast.
Revenue rose 24% to $2.29 billion, beating expectations of $2.18 billion.
Total same-store sales rose 25.7% in the latest quarter, with all brands registering double-digit gains. Same-store sales rose 26.2% at Williams-Sonoma and 25.7% at Pottery Barn and Pottery Barn Kids and Teen. West Elm same-store sales increased 25.2%.
“In Q4, despite shipping constraints and low retail traffic, we delivered another quarter of accelerating revenue and profitability with 26% comp growth and over 85% EPS growth,” said Laura Alber, president and CEO. “This strong end to the year, combined with our outperformance throughout 2020, drove record fiscal year revenue growth, substantial operating margin expansion and EPS that was almost double that of last year.”
Looking ahead, Williams-Sonoma is “very optimistic” about its potential for growth and profitability. The company expects to deliver mid-to-high single-digit revenue growth and operating margin expansion in 2021. Longer-term, it has accelerated its goal of $10 billion in net revenues and sees it reaching the milestone in the next five years, with operating margins at 15%.
“All of our brands are starting the year strong, and we expect this strength to continue through 2021 and beyond based on a number of factors,” Alber stated. “First, it is the ongoing momentum of our growth initiatives and the increasing relevance of our three key differentiators. Second, it is the recovery in our retail traffic and our inventory levels as we move throughout the year. And third, it is the favorable macro trends that are expected to continue to benefit our business for the long-term, including high consumer confidence, a strong housing market, an accelerating shift to e-commerce, the expected continuation of working from home in some capacity post-pandemic, and the importance of sustainability and values to the consumer.”