From Home Furnishing Business
Williams-Sonoma Registers Sales, Profit Gains in 2Q
Despite a lower operating margin, home furnishings retailer Williams-Sonoma (NYSE: WSM) said profits rose 2.2% in the second fiscal quarter to $52.9 million or 61 cents per share.
Revenues were up 3.7% to $1.201 billion in the quarter ended July 30, while comparable brand revenue was up 2.8%.
The revenue growth was paced by its e-commerce business, where revenues were up 5.2% to $630.8 million and represented 52.5% of total revenues. Revenues from its brick-and-mortar retail stores rose 2.1% to $570.8 million and accounted for 47.5% of the total.
The e-commerce segment’s operating margin declined to 21.4% from 22.1% in last year’s second quarter, but the operating margin in its retail stores rose to 6.1% from 5.9% in the comparable quarter.
The company’s total operating margin also slipped to 6.8% from 7.2% in last year’s second quarter.
“Our second quarter results with accelerated revenue and comp growth of 3.7% and 2.8%, respectively, demonstrate that the investments and actions we have undertaken to deliver value, quality and excellent customer service are driving improved top-line performance,” said Laura Alber, president and CEO. “These results reflect the strength of our brands and our competitive advantages, as well as our relentless focus on our initiatives to drive innovation and operational excellence.”
The comparable brand growth was paced by West Elm, which registered a 10.1% gain over the same quarter a year ago. Pottery Barn registered 1.2% comparable brand growth, while the Williams-Sonoma brand was up 1.9% and PBTeen was up 0.2%.
The only brand that didn’t have comparable brand revenue growth was Pottery Barn Kids, which was down 3.9%.
For the first half of the fiscal year, revenues totaled $2.313 billion, up 2.5% from $2.257 billion in the first half of the previous year.
First-half profits totaled $92.5 million or $1.06 per share. That was up from $91.4 million or $1.01 per share in the first of the last fiscal year.
The company also reaffirmed its earlier revenue and earnings guidance for the fiscal year. Revenues are projected at $5.165 billion to $5.265 billion, while adjusted earnings per share are projected at $3.45 to $3.65.