Williams-Sonoma reported strong third-quarter sales and, as a result, raised its fourth-quarter outlook as several of the retailer’s banners are reaping the rewards of a healthier housing market, which is boosting consumer spending.
Home furnishings and accessories stores are performing best, including West Elm and PBteen. Pottery Barn and Williams-Sonoma’s own anchor brands, however, did not perform as strongly but did post single-digit sales increases.
Overall, comparable brand revenue growth was up 8.2 percent compared to 8.5 percent in the prior-year quarter. The retailer experienced revenue growth across all of its brands, with the strongest performance posted by West Elm, whose revenues increased 22.2 percent compared to 13 percent in last year’s comparable quarter, and PBteen, whose revenues spiked 16.7 percent compared to 2 percent in the same quarter in the prior year.
Pottery Barn’s revenue increased 8.4 percent for the quarter, down a few points from last year’s 11.1 percent in the comparable quarter. Meanwhile, Williams-Sonoma’s revenue increased only 1.4 percent compared to 0.8 percent last year.
“Our strong third quarter and our performance year-to-date illustrate the power of our business model and the relevancy of our brands. We delivered an 11 percent increase in revenue and EPS growth in excess of 18 percent,” said Laura Alber, president and CEO. “Importantly, we delivered this revenue growth and accompanying operating margin expansion while simultaneously investing in our multifaceted growth initiatives.”
Direct-to-customer (DTC) net revenues for the quarter increased 14.5 percent to $512 million from $447 million in the year-ago quarter, with growth across all brands, primarily driven by Pottery Barn and West Elm. DTC net revenues generated 49 percent of total company net revenues in the quarter, compared to 47 percent in last year’s third quarter.
Retail net revenues for the quarter increased 8.5 percent to $540 million, up from $497 million in last year’s comparable quarter, again primarily driven by Pottery Barn and West Elm.
