Williams-Sonoma Returns Strong Q1

For the 13 weeks ended May 4, Williams-Sonoma, Inc. announced that net earnings were $46.2 million, or 48 cents per diluted share, versus $39.5 million, or 40 cents per diluted share, in the year-earlier period. Company-wide comparable store sales advanced by 10%, according to the company.

Williams-Sonoma maintained that Pottery Barn comparable store sales advanced 9.7% while William-Sonoma comps gained 6%, Pottery Barn Kids comps gained 8.1%, West Elm comps gained 18.8% and PBteen comps gained 12%.

Wedbush Morgan analyst Joan Storms, in a research note, characterized revenue growth as “impressive” and noted that earnings per share beat a consensus estimate of 44 cents. Although she maintained a neutral outlook based on share price, Storms asserted that “Williams-Sonoma is one of the best-positioned retailers in home furnishings as a result of its multi-distribution channel model with several competitive advantages,” including unique lifestyle merchandising across brands, rising profit margins from a shift to a direct sales emphasis and international growth potential.

Adjusted earnings per share gained 17.1%, just below the 20% reported GAAP gain.

First quarter net revenues grew 9.7% to $974 million year over year, the company reported. Operating income grew 16.5% to $74 million, Williams-Sonoma declared, and operating margin reached 7.6% versus 7.2% in in the 2013 period. Excluding unusual business events, first quarter non-GAAP operating income grew 11.4%, the company noted.

Laura Alber, Williams-Sonoma president and CEO, said as part of the company’s financial results announcement, “Innovative, high-quality product, personalized service, relevant marketing and strong execution across all brands drove these better than expected results. With 50% of our revenue in the direct channel this quarter, we believe our multi-brand, multi-channel platform is driving consistent market share gains and providing us with a sustainable competitive advantage. We are executing against all of our growth strategies, investing in our business while improving our profitability and returning capital to our stockholders.”


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