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From Home Furnishing Business
Williams-Sonoma Revenues, Earnings Up Slightly Amid Retail Headwinds
November 18,
2016 by Larry Thomas in Financial Reports, Industry 
Retailer Williams-Sonoma (WSM) said third-quarter revenues and earnings per share were slightly ahead of last year’s third quarter despite a challenging retail environment that resulted in comparable-brand revenue declines at three of its five major brands.
The company said revenues for the quarter ended Oct. 30 rose 1.1% to $1.245 billion, noting that e-commerce accounted for 52.1% of the total.
Net income totaled $69.4 million or 78 cents per share. That compares with $70.5 million or 77 cents per share in the same quarter a year ago.
“Our third quarter performance demonstrates our competitive strengths – our differentiated portfolio of brands and profitable multi-business model – as well as the ongoing success of our strategic initiatives that we have seen this year,” said Laura Alber, president and CEO. “We saw continued double-digit growth in West Elm, our newer businesses Rejuvenation and Mark and Graham, and our international company-owned businesses.”
She pointed out that inventories were reduced by 3.5%, which helped boost gross margins.
“That allowed us to meet our earnings commitment at the high end of our guidance range, despite a more difficult retail environment,” Alber said.
The company’s rapidly-growing West Elm brand had comparable-brand revenue growth (including e-commerce and traditional retail store sales) of 12%. The only other format to record comparable-brand growth was Williams-Sonoma, which crept up 0.1%.
Pottery Barn had a comparable-brand revenue decline of 4.6%, while PBTeen was down 10.9% and Pottery Barn Kids was down 1%.
“Although the current environment is less certain, we remain focused on what we can control, and we are confident that the ongoing progress on our strategic initiatives will improve service for our customers and will drive long-term sustainable profitable growth for our shareholders,” said Alber.
For the nine months ended Oct. 30, revenues totaled $3.502 billion, up from $3.39 billion in the same period in 2015.
Nine-month net income totaled $160.8 million or $1.79 per share. That was down from $168.9 million or $1.82 per share in the comparable period.
The retailer also said it is slightly lowering its revenue and earnings forecasts for the fiscal year.
Revenues are now projected at $5.07 billion to $5.15 billion, down from an August forecast of $5.075 billion to $5.225 billion. Earnings per share, excluding reorganization charges, are now projected at $3.35 to $3.45, down from the August forecast of $3.35 to $3.55.