Comparable Sales Gains Drive Williams-Sonoma Q4 Results

Williams-Sonoma posted a solid fourth quarter and fiscal year as the comparable sales across its retail brand portfolio enjoyed growth.

Fourth quarter net earnings were $166 million, or $2.10 per diluted share, versus $155.3 million, or $1.93 per diluted share, in the year-earlier period. Adjusted for one-time events, diluted earnings per share were $2.13 versus $2.10 in the year-prior quarter. Adjusted diluted earnings per share in the period topped a MarketBeat published analyst consensus estimate of $2.05.

Comparable sales grew 7.6% in the quarter year over year with West Elm up 13.9%, Pottery Barn up 6.7%, Pottery Barn Kids and Teen up 7.9%, and Williams Sonoma up 3.3%.

Net revenues were $1.84 billion, essentially flat from the year-before quarter. The 2018 fiscal year included a 53rd week, which the company estimated added approximately $85 million in net revenues and 10 cents per diluted share to the year-past fourth quarter and the year. Operating income was $203.7 million versus $200.9 million in the year-previous period.

For the full fiscal year, net earnings were $356.1 million, or $4.49 per diluted share, versus $333.7 million, or $4.05 per diluted share, in the year earlier. Adjusted diluted earnings per share were $4.84 versus $4.46 in the year prior.

Comparable sales grew 6% year over year with West Elm up 14.4%, Pottery Barn up 4.1%, Pottery Barn Kids and Teen up 4.5%, and Williams Sonoma up 0.4%.

Net revenues were $5.9 billion versus $5.67 billion in the fiscal year before. Operating income was $465.9 million versus $436 million in the year previous.

Laura Alber, Williams Sonoma president and CEO, called 2019 “an outstanding year for our company. We delivered a strong holiday season, outpacing the industry with comparable brand revenue growth of 7.6% in the fourth quarter. West Elm outperformed with a comp of 13.9%, the Pottery Barn brands’ resurgence continued with a combined comp of 7.1%, and the Williams Sonoma brand returned to growth with a comp of 3.3%. The drivers of our outperformance include an expanded, more relevant product assortment, new customer acquisition and further innovations in our customer experience across e-commerce, stores and the supply chain. Our cross-brand initiatives business to business, The Key and in-home Design Crew, also continued to scale and become more impactful accelerators of our growth. For the full year, we achieved our goal of maximizing growth and maintaining high profitability with topline and non-GAAP EPS growth at the high-end or above expectations and operating margin expansion. It is clear from these results that our continued evolution and innovation are setting us apart from the competition. This culture is woven into our design-driven products, our digital-first model and in our commitment to sustainability leadership. And together with our strong growth initiatives, we have a winning combination.”