Home Pottery Barn, West Elm Lift Williams-Sonoma Q1
May 26, 2022
Pottery Barn, West Elm Lift Williams-Sonoma Q1
Posted In: Retail Articles

By Mike Duff

Contributing Editor

Pottery Barn and West Elm led Williams-Sonoma to a strong performance in the first quarter with each posting double-digit comparable sales.

Net earnings were $254.1 million, or $3.50 per diluted share, versus $227.8 million, or $2.90 per diluted share, in the quarter a year prior.

A Yahoo Finance-published analyst consensus estimate called for earnings of $2.90 per diluted share and revenues of $1.81 billion.

The company posted net revenues in the quarter of $1.89 billion versus $1.75 billion in the quarter a year previous. 

Williams-Sonoma comparable sales advanced 9.5%, with the namesake banner down 2.2%, Pottery Barn up 14.6%, Pottery Barn Kids and Teen down 3.1% and West Elm up 12.8% in the quarter year over year.

Operating income was $323.5 million versus $275.2 million in the year-before period.

In a conference call, Laura Alber, Williams-Sonoma president and CEO, said that the company has been able to build a relationship with customers by addressing their lifestyles, preferences and concerns including with its ESG initiatives addressing social and sustainability issues. In addition, Williams-Sonoma recognizes that it can support consumers who will continue to remain close to home as they incorporate hybrid work situations into their lifestyles and face rising costs associated with fuel and travel. Circumstances point to consumers cooking and entertaining at home, she said. Williams-Sonoma can provide consumers with what they need to outfit their homes, leaning on its multichannel portfolio of brands to help shoppers find the right price/value for them in uncertain times. The multichannel portfolio also gives the company flexibility that allows a management team with expertise and experience in working through times of economic challenge to successfully grow the business, Alber said.

In a retail environment where younger consumers are turning to digital pursuits and shopping with greater expectations, Alber added, Williams-Sonoma is competing with brick-and-mortar-based operations that are behind in developing their digital experiences and capabilities, and pure players that lack experience running stores. As such, Albers asserted, Williams-Sonoma is well-positioned as a digital-first but not digital-only company in a macro environment aligned with those factors that differentiate the company.

In announcing the financial results, Alber said, “The first quarter of fiscal 2022 represented another quarter of outperformance with a 9.5% comp on the topline, with both demand and net sales in-line with each other, and 19.5% growth on the bottom line to $3.50 per share. These results continue to demonstrate the strength of our multi-brand portfolio and our team’s ability to navigate challenges and outperform. Additionally, these results are even more impressive when considering that we were up against last year’s strong performance with a comp of more than 40%. As we look to the balance of the year, we remain confident and committed to our guidance of mid-to-high single-digit comps with operating margins relatively aligned to fiscal 2021. We have a solid line-up of growth initiatives and operational improvements planned for the balance of the year. And, as we look further, we are confident in our path to be a $10 billion company by 2024.”

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