If you needed any more convincing both about how the company sees itself and its rise to the top levels of the industry, it was right there in the first sentence of Williams Sonoma’s
In blowing out the first three months of its fiscal year, the parent company to Pottery Barn, West Elm and its namesake kitchenwares brand among others, had a 40.4% increase in revenues with non-GAAP diluted earnings per share exploding by nearly 300% over a year ago.
Of course like many other retailers in the country, especially in the home furnishings space, these numbers anniversary a period a year ago when much of Sonoma’s physical store fleet was closed due to the pandemic. But with 65% of its revenue for the quarter came from its e-commerce side, the numbers are still outstanding.
And the results caused the company to ratchet up its forecast for the balance of the year, saying “We are raising our full year outlook from mid-to-high single digit revenue growth to low-double digit to mid-teen revenue growth and year-over-year operating margin expansion.”
But it was the self-proclaiming statement about its place in the market that perhaps stood out most. “We are the only home furnishings retailer that’s able to serve customers at scale online and provide the experience and convenience of physical retail with exclusive sustainable products,” CEO Laura Alber said in releasing the news.
Once again, as she has done on previous calls, Albert attributed the company’s performance to its three points of differentiation: “Our in‐house design, our digital-first channel strategy; and our values.”
Wall Street liked what it saw in the Sonoma numbers with the stock up more than 5% in the first hour of post-market trading.
In both its earnings statement and an investors call on Wednesday evening, the company had all kinds of insights and outtakes on its performance for the quarter:
• Growth was pretty much across all of its nameplates, led by West Elm at 50.9%, Pottery Barn at 41.3%, Williams Sonoma kitchen and home up 35.3% and PB Kids and Teens up 27.6%.
• Within individual brands, bath renovation was up 50% at Pottery Barn while its marketplace representing third party products now account for 6% of total PB revenue; at West Elm outdoor was up 140% with expectations for that business to double by next year; Williams Sonoma home, a relatively small unit that has been repositioned, saw a 40% increase with executives saying it represented one of the company’s biggest growth opportunities; and cross-branding through its Key Rewards program and cross merchandising efforts, up 165%. It said it expects to announce an expansion of these efforts soon.
• On the environmental and sustainability front, it again repeated is pledge to be carbon neutral across the entire company by 2025.
• The company closed 33 stores over the past year and said it expects to reduce its physical footprint by 25% over the next five years. This will come with store closings from “malls we don’t want to be in,” but also relocations and reformats. It was not more specific on the question of combination stores, something it has done with outlets but not in its conventional units.
• Finally it said even since the quarter closed and it has begun to anniversary year-old results when stores reopened and the first surge of home spending began its business has remained strong. “We are uniquely positioned to gain market share,” Alber said, a forecast she has made what is now many times.