Williams-Sonoma Posts Q3 Net Gain of 16 Percent
SAN FRANCISCO-Sales gains across all of the company's brands boosted Williams-Sonoma's third-quarter net income by 16 percent, to $56.7 million.
Total company net revenues in the quarter, which ended on Nov. 3, rose 11.3 percent to $1.1 billion, with increases of 14.5 percent in Williams-Sonoma's direct-to-customer segment and 8.5 percent in its retail sector. On a comparable-brand basis, West Elm topped the list with an increase of 22.2 percent in revenues, followed by PBteen at 16.7 percent and Pottery Barn at 8.4 percent.
In a conference call on the results to financial analysts yesterday, Laura Alber, Williams-Sonoma's president and CEO, said the company has gained traction with all of its key business initiatives--which include growing the existing brands, launching new businesses and expanding the brands' global reach. In addition, Alber said, the company has been investing in its e-marketing strategies, resulting in more revenue from existing customers and acquiring new customers at a lower cost.
"All year, we have been making investments in our business to drive long-term, sustainable growth, as well as to prepare us for the fourth quarter," Alber told the analysts. "We believe we are well positioned as the destination for cooking, entertaining, decorating and furnishing your home this holiday season."
Alber also noted that the third quarter brought a gain of 31 percent from Williams-Sonoma's international operations. The company expanded its operations in Australia with the opening of a West Elm store in Melbourne, and now plans to open a West Elm in the United Kingdom in December.
Company gross margin dropped 40 basis points to 38.6 percent. Selling, general and administrative expenses increased 8.4 percent in dollars but were down 80 basis points as a percentage of sales, to 29.8 percent.
In its statement on the financial results, Williams-Sonoma said net revenues in the fourth quarter should range from $1.37 billion to $1.43 billion. For the fiscal year as a whole, revenues should range from $4.2 billion to $4.35 billion.