Stores, E-Commerce Advance Williams-Sonoma Q3

In a third quarter when it recorded 51% of net sales from e-commerce, Williams-Sonoma generated net earnings of $70.5 million, or 77 cents per diluted share, versus $64.9 million, or 68 cents per diluted share, in the year-earlier quarter. Net revenue was up 7.8% to $1.23 billion, while company comparable store sales advanced 4.5% versus last year’s quarter.

An analyst average estimate from Zacks Investment Research called for third quarter diluted earnings per share to come in at 71 cents.

By retail brand, the company pointed out, comps were up 1.2% at Williams-Sonoma, 2% at Pottery Barn, 4.7% at Pottery Barn Kids and 15.7% at West Elm. Comps slipped 0.9% at PBteen.

Third quarter operating income was $110.7 million versus $104.7 million in the period a year ago.

As a proportion of revenues, e-commerce sales actually slipped slightly, to 51% in this year’s third quarter from 51.3% in last year’s period. However, they gained in real terms to $628.2 million from $587 million in the year-earlier period on the overall company revenue advance.

“We are pleased with our solid third quarter results, which speak to the power of our brands and our ability to execute our customer-focused strategy,” said Laura Alber, Williams-Sonoma president and CEO. “We achieved total net revenue growth of 8%, EPS growth of 13%, and we are reiterating our full-year guidance. Looking ahead, while the retail landscape and consumer demand has been more volatile, we believe our balanced portfolio of differentiated brands and strong multi-channel platform positions us for ongoing market share gains. Our focus remains on executing our strategic initiatives to drive long-term sustainable growth for our shareholders.”

As it has built e-commerce sales, Williams-Sonoma has been in the process of reducing the unit count at its namesake stores and Pottery Barn, which will shrink by five and two locations respectively in fiscal 2015, the company maintained. Although Williams-Sonoma will shutter three Pottery Barn Kids locations in the fiscal year, it will open six, for a net of three. The company also will open 18 West Elm stores and one Rejuvenation, while closing none. Of the stores it intends to open in fiscal 2015, Williams-Sonoma slated six for Australia. At the end of the fiscal year, the company-wide store count would total 616.