For the second quarter ended July 29, Williams-Sonoma, Inc. reported that net earnings reached $43.4 million, or 43 cents per diluted share, versus $39.3 million, or 37 cents per diluted share, in the 2011 period. Overall, comparable store sales across the company banners increased by 7.4% with West Elm reporting the strongest performance, up 15.6% versus last year’s second quarter, and Williams-Sonoma the weakest, down 0.4%.
Pottery Barn comps gained 11.7% year over year while Pottery Barn Kids saw a 3.8% advance and PBteen a 0.8% increase.
As she raised her earnings forecast on the company’s stock, Wedbush-Morgan analyst Joan Storms noted that Williams-Sonoma second quarter earnings per share beat the high side of the company’s guidance for the quarter, her estimate of 40 cents and an analyst consensus of 41 cents. Comps also beat guidance, she pointed out in a research note.
“We are encouraged by improved gross margins and more even performance across the brands,” she said in the note.
Williams-Sonoma net revenues increased 7.3% to $874 million in the second quarter. The sales mix shifted with direct-to-consumer revenues, including those earned online, increasing to 47% of the company total versus 45% in last year’s second quarter.
“During the quarter, we delivered strong performance in revenues, operating margin and earnings per share,” Laura Alber, president and CEO, said in comments on Williams-Sonoma’s performance. “Diluted earnings per share grew 16% on revenue growth of 7%, with comparable brand revenue growth accelerating from 5.4% in the first quarter to 7.4% in the second quarter. Importantly, we drove this growth in revenues and earnings while simultaneously investing in our long-term growth initiatives.”
In addition, Alber noted, Williams-Sonoma “plans to open our first four company-operated stores outside of North America in Sydney, Australia. These stores, representing the Williams-Sonoma, Pottery Barn, Pottery Barn Kids and West Elm brands, are slated to open in early fiscal 2013. This global expansion opportunity reflects the strength and appeal of our brands and will serve to drive our business over the long-term.”
So far this year, net, Williams-Sonoma has opened three stores to reach 579. The company added three West Elm, to reach 40, and one of its lighting and hardware oriented Rejuvenation format locations, to reach 4, while closing one Pottery Barn, to total 193, net.