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Q4 Maintains Williams-Sonoma Momentum

Williams-Sonoma, Inc., has reported that GAAP earnings grew to $256.7 million, or $2.54 per diluted share, in the 53-week fiscal 2012 from $236.9 million, or $2.22 per diluted share, in the 52-week fiscal 2011, while earnings per share adjusted for one-time events came in at $2.58 versus $2.24 in the year earlier. Fourth quarter net revenues increased 8.7% to $4.04 billion from fiscal 2011, according to the company, while, on a comparable-weeks basis, they gained 6.6%.

Comparable brand revenue growth, Williams-Sonoma’s term for comparable store sales at the chains in its portfolio, grew by 8.5% at Pottery Barn in fiscal 2012 and shrunk by 1.1% at William-Sonoma stores, the two divisions that, between them, represent two-thirds of corporate sales. Comps at Pottery Barn Kids gained 5.6%, Williams-Sonoma stated, while those at West Elm increased 17.4% and those at PBteen advanced 1.7%. The company-wide comp increased 6.1% for the year.

In the 14-week fourth quarter of fiscal 2012, earnings increased to $133.7 million, or $1.34 per diluted share, from $122.6 million, or $1.17 per diluted share, in the 13-week period a year prior. Earnings per diluted share as stated derived a seven cent per share benefit from the extra week in the fiscal quarter, the company noted.

Comps at Pottery Barn increase by 4% in the quarter while those at Williams-Sonoma decreased 1.6%. Comps at Pottery Barn Kids gained 7.7% in the period versus last year’s quarter while those at West Elm increased 19.1% and those at PBTeen gained 6.4%, the retailer related. The company-wide comp increased by 4% for the quarter.

Over the current fiscal year, the company said it plans to open eight new Williams-Sonoma stores and close 15. It also plans to open seven new Pottery Barn stores and close four, open four Pottery Barn Kids stores and close the same number, open 10 new West Elm stores and close one. Across the store portfolio, the company will add five stores net if plans hold up.

“Revenues and EPS again reached new levels in 2012,” Laura Alber, Williams-Sonoma president and CEO, said in comments on the company’s financial results. “We drove these results while simultaneously investing in our strategic growth initiatives, including global expansion. Our portfolio of brands and our ability to generate new businesses provide stability as trends fluctuate between the different merchandise sectors in which we operate. Likewise, our multiple marketing and sales channels provide us competitive advantages in meeting our customers’ changing needs as shopping patterns continue to evolve as to when, where, and in what format purchase decisions are made. As we look forward to 2013 and beyond, we continue to see opportunities to grow our existing brands, build new ones and expand to new geographies, including Australia, where we will be opening our first company-operated stores outside North America this May. During fiscal 2013, we expect to grow annual revenues to between $4.20 billion and $4.28 billion and earnings per share to the range of $2.65 to $2.75. Over the next three years, we expect revenue growth to be in the mid to high single-digits and EPS growth to be in the low double-digits to mid-teens. We remain excited about the opportunities ahead of us to more than double the size of our business over the next decade while returning cash to our shareholders and increasing shareholder value.”

Morgan Stanley analyst David Gober, in a research note, observed that Williams-Sonoma’s view looking forward over the next three years, “reinforced our conviction in our bullish long-term outlook as fourth quarter results were about in line with our expectations. We continue to expect results to improve over the course of 2013 due to continued investment in growth supported by first quarter and 2013 guidance that imply acceleration.”