Mixed bag in 2Q at Williams-Sonoma
August 29, 2007,
San Francisco – The Williams-Sonoma and West Elm divisions were “two of the brightest spots” – with Williams-Sonoma Home also shining closely behind – during the second-quarter period for Williams-Sonoma Inc., the retailer reported during its quarterly earnings call today.
Dave DeMattei, group president for the three brands, said, “Despite a challenging retail environment, the Williams-Sonoma brand in the second quarter exceeded expectations on both top and bottom lines across all channels.”
Williams-Sonoma’s direct-to-consumer results broke a milestone, delivering the highest second-quarter operating margin in the company’s history. This was primarily driven by: a strong consumer response to seasonal merchandising strategies; continuing momentum in e-commerce, both in traffic and conversion; and the ongoing success of the versioned catalogs.
The company also “continues to be pleased” at the retail channel with the performance of its re-merchandised small and mid-sized stores.
At West Elm, furniture and selected textiles, including new product introductions, were quarterly key drivers.
The big Pottery Barn division had less to boast about, but the company maintained it was “particularly pleased with our rebound in the retail channel,” which delivered a better-than-expected comparable-store sales increase of 1.8%, said Laura Alber, president. Strong growth in furniture and textiles was offset by persisting weakness in decorative accessories and tabletop items.
Pottery Barn is also giving more attention to its Pottery Barn Outdoor catalog and its Bed and Bath stores – the latter with new and expanded product assortments – because, as Alber said, both “have driven increased sales and are proving to be catalysts for new ideas in both retail and direct-to-customer channels in the future.”
The company reported quarterly diluted earnings per share of $0.23, down 23.3% from $0.30 for the same quarter last year. Sales were $859.4 million, up 4.1% from $825.5 million one year ago. Comp store sales gained 1.2% on a company-wide basis.
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