Williams-Sonoma Net Climbs 12.8 Percent in Q2 as Brands Post Revenue Gains
August 29, 2013,
SAN FRANCISCO-With several of its brands recording strong gains in comparable brand revenues, Williams-Sonoma's net income jumped 12.8 percent in its fiscal second quarter, to $48.9 million.
Total net revenues in the quarter, which ended on Aug. 4, were up 12.3 percent to $982.2 million. Key to the top-line growth were comparable-brand revenue gains of 16.5 percent for the West Elm brand, 16.3 percent for PBteen, 9.9 percent for Pottery Barn and 8.2 percent for Pottery Barn Kids. The Williams-Sonoma brand turned in the weakest performance, with a comparable-brand revenue drop of 0.4 percent.
In a conference call yesterday to financial analysts, Laura Alber, Williams-Sonoma's president and CEO, said the home furnishings brands led the way for the company in the quarter, each delivering double-digit revenue growth and combining for an aggregate revenue gain of 14 percent. These brands "are benefiting from exclusive product assortments, lifestyle merchandising, relevant marketing messages and a well-honed promotional strategy across our multiple channels," Alber said.
Gross margin for the company as a whole was down 70 basis points to 37.6 percent. Selling, general and administrative expenses rose 10 percent in dollars but were slimmed by 60 basis points as a percentage of sales, to 29.6 percent.
For the third quarter, Alber said, Williams-Sonoma will focus on several strategies. These include maintaining "a compelling product line and value proposition" for West Elm; underscoring the strength of the direct channel and improving performance at the retail channel for the Williams-Sonoma brand; featuring a transitional late-summer color palette, expanding bedding and textiles offerings, and expanding the size assortment of the upholstery collection at Pottery Barn; and pushing the "preppy transitional esthetics" and collaborations with new brand partners at PBteen.
Along with releasing its financial results, Williams-Sonoma also said it is entering the Philippines market through a multiyear agreement with Store Specialists. The agreement calls for Store Specialists to develop all of Williams-Sonoma's brands in that nation, beginning early next year with the introduction of Pottery Barn and Pottery Barn Kids in Manila.
Other Articles By Author
HFN Launches Interactive Idea Book
HFN's DIGITAL EDITION
COVER STORY: HFN Turns 90
We commemorate HFN's 90th anniversary by paying tribute to the iconic retailer and supplier brands--and the people--that have helped the industry flourish, then and now.
ALSO IN THIS ISSUE:
- Up & Coming Leaders - The home industry is in capable and visionary hands as this year’s 40 Under 40 list attests. Today’s young leaders span all disciplines and varied levels of operation.
- Omnichannel Retailing - In the Mobile App World, Time is Money