Disappointing Q4 results.
The fourth quarter results for Williams-Sonoma on Wednesday, March 16 were disappointing for the company and weighed down by a decline in a metric, combining same-store and e-commerce sales at its Pottery Barn brand. For the quarter ended January 31, Williams-Sonoma posted US$141.1 million in profit and per-share earnings of US$1.55, compared with profit of US$147 million in the year-earlier period. Revenue rose 2.9% to US$1.59 billion.
Analysts surveyed by Thomson Reuters had forecast quarterly per-share earnings of US$1.58 on US$1.62 billion in revenue.
Meanwhile, the company that also owns West Elm and its eponymous kitchenware brand, announced a new US$500 million stock-repurchase program. Even though comparable-brand revenue (a metric that tracks same-store sales and online sales) rose 0.8% overall, it fell 2% at Pottery Barn, which is the company’s largest source of revenue.
West Elm notched 13% growth, and comparable-brand revenue rose 0.9% at Williams-Sonoma. At the PBteen brand, it fell 12% after rising 3% in the year-ago period.
CEO Laura Alber (pictured above) explained, “In 2015, we delivered top and bottom line performance within our guidance ranges despite a challenging end to the year. We are reporting record revenue and earnings per share for the year as a result of the strength of our portfolio of outstanding brands, our balanced, multi-channel model, and solid execution.”
Alber said that disciplined management enabled the company to meet its commitments as it adjusted to an evolving consumer and competitive landscape. “Our brands are highly aspirational and relatable at the same time, and create a platform for growth.”
“Entering 2016, we believe we have the opportunity to strengthen our competitive positioning including our product, service, and value proposition for our customers, which will allow us to profitably grow market share. We are making important changes to the way we do business. We are re-asserting our product leadership, revolutionizing our approach to inventory, transforming our marketing, and changing our approach to real estate and the store experience,”
Alber concluded, “Today, we are reiterating our long term outlook of revenue growth in the mid to high single-digits and earnings per share growth in the low double-digits to mid-teens. We are focused on leveraging our market leadership and talented teams to execute our strategic initiatives and to deliver profitable growth and sustainable returns for our shareholders.”
Meanwhile, analysts say that Williams-Sonoma appeared poised to follow in the steps of other retailers like Target and Procter & Gamble with executives saying they planned to eliminate products in hopes that a simplified selection would improve order fulfilment for customers.