Williams Sonoma on Wednesday reported net revenues rose 6.2% to $1.68 billion, up from $1.58 billion in the year-ago period and besting the Zacks consensus estimate for $1.65 billion. E-commerce net revenues rose 8.4% to $877 million, up from $809 million in the year-ago quarter. That was 52.2% of total company net revenues in the quarter, up from 51.1% a year ago, according to a company press release.
Overall same-store sales increased 5.4%, a 210 basis point acceleration from the prior quarter after tumbling 0.9% in the same period a year ago. Same-store sales by brand: Pottery Barn rose 4.1%, West Elm rose a whopping 12.3%, Williams Sonoma rose 4.3%, Pottery Barn Kids rose 0.9% and PBTeen rose 2.6%. Non-GAAP diluted earnings rose 8.4% to $1.68 per share, beating the Zacks estimate of $1.63 per share.
The company is expediting the closure of a number of underperforming domestic stores in light of consumers' shift online, though much depends on whether landlords respond to possible closures with lower rents. Overall, globally, the company expects to shutter 30 stores this year (half of them Williams Sonoma stores) and open 20. Its new Williams Sonoma Home concept will expand, with 24 new locations within Williams Sonoma stores and two standalone stores.
Thanks to a diverse portfolio and a strong brand identity, Williams Sonoma is holding its own against the incursion of online furniture players like Wayfair, along with stepped-up efforts in furniture and home from off-price retailer TJX Cos., Amazon, Target and Walmart. For the year, the company crossed the $1 billion revenue threshold, and all brands, including its newer Rejuvenation and Mark and Graham businesses, were profitable, the company said on Wednesday.
Banners like Pottery Barn, Williams Sonoma and, increasingly, West Elm remain familiar brick-and-mortar fixtures, but executives told analysts Wednesday that they're making defensive moves online as well. Pottery Barn, for example, is in the midst of curating an online marketplace, partnering with "high-quality vendors to significantly expand our online-only direct-ship assortments in underserved categories, trends and aesthetics," CEO Laura Alber said, according to a Seeking Alpha transcript. "This online marketplace will give us the ability to accelerate growth without inventory cost and to test new products and price points."
This year the retailer will launch buy online, pickup in store for Pottery Barn and West Elm, she also said. The company sees particular opportunity to grow market share at West Elm, what Alber called "one of the fastest growing, most profitable brands in the industry," and there are plans to expand the banner into new categories and fuel its B2B and hospitality business. She reiterated her prediction that the brand has the potential to reach $2 billion in the near-term and be its biggest brand over time. And Alber sent a shot across the bow to the competition.
"One of the things that really makes us different from a lot of people out there, particularly those that are copying us, is that we are one of the very few retailers that own exclusive designs," she said. "Our product finishes, our vendor community is very loyal. And as a result, because of our vertical integration, our quality is far superior. And we're going to be very competitive this year or, I should say, aggressive about protecting our design assets because this is where we really win, and there's a lot more we can do on that than we've done in the past in terms of protecting our assets."