Williams-Sonoma Q1 Sales Fall
MILAN — San Francisco-based home retailer Williams-Sonoma Inc.’s numbers are suffering due to declines at key brands including West Elm, but Wall Street didn’t seem too worried.
The company said Tuesday that first-quarter net earnings for the quarter ended April 30 plummeted year-over-year to $156.5 million from $254.1 million. Brand revenue fell 6 percent; West Elm led declines.
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The company’s earnings per share results beat Wall Street expectations. In the first quarter, Williams-Sonoma Inc. posted $2.35 per share. Earnings, adjusted for non-recurring costs, came to $2.64 per share.
Overall brand revenue for the quarter dipped to $1.76 billion from $1.89 billion, as sales of West Elm fell 15.8 percent, the Williams Sonoma brand fell 4.4 percent, Pottery Barn Kids and Teen fell 3.3 percent and Pottery Barn fell 0.4 percent. Gross profit was $675.1 million, down from $828.5 million year-over-year. Operating income dropped to $199.5 million from $323.5 million reported in the first quarter of 2022 ended May 1.
Looking ahead, the company was confident, saying that its outlook for fiscal 2023 was unchanged.
“In fiscal 2023, we expect net revenue growth in the range of negative 3 percent to [positive] 3 percent growth, with an operating margin between 14 to 15 percent,” the company said in a statement.
Home to Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, Williams-Sonoma Inc. and most recently GreenRow, the company said it expects mid-to-high-single-digit annual net revenue growth with operating margin above 15 percent in the long term, as the company continues to focus on its online and business-to-business. In its investor presentation released in April, the company said 66 percent of its business is represented by e-commerce.
“Despite a challenging macro backdrop, we delivered another solid quarter of earnings. With our focus on compelling product, customer service and profitability, we achieved our financial expectations,” Williams-Sonoma Inc. president and chief executive officer Laura Alber said in the statement.
Earlier this month the home goods and furnishings conglomerate launched GreenRow, an internally designed and developed brand that incorporates sustainable materials and manufacturing practices to create “heirloom” products.
With longevity at the heart of the new label, GreenRow aims to produce colorful, vintage-inspired quality products that will be on display on GreenRow.com.
This latest launch features living, bedroom and dining furniture as well as rugs, bedding, bath, baby, lighting, pillows, throws, curtains, table linens, dinnerware and decor, all crafted using low-impact materials wherever possible, including responsibly sourced linen, cotton, wood and recycled materials. The debut collection features handmade, artisanal products.
Shares of Williams-Sonoma dropped slightly 0.3 percent on Tuesday, to $111.85.
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