Williams-Sonoma, Inc. Accelerates Comps in a Strong Quarter

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Williams-Sonoma (NYSE: WSM) announced second-quarter 2017 results on Aug. 23 after the market closed, with the home-furnishings retailer highlighting solid comparable-brand revenue growth and reaffirming its full-year outlook.

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Let's have a closer look at what Williams-Sonoma accomplished over the past few months, as well as what investors can expect from the company.

Williams-Sonoma results: The raw numbers

Metric

Q2 2017

Q2 2016

Year-Over-Year Change

Revenue

$1.202 billion

$1.159 billion

3.7%

GAAP net income

$52.9 million

$51.8 million

2.2%

GAAP earnings per diluted share

$0.61

$0.58

5.2%

What happened with Williams-Sonoma this quarter?

  • For perspective, Williams-Sonoma's guidance provided last quarter called for revenue in the range of $1.195 billion to $1.23 billion, and earnings per share in the range of $0.55 to $0.61.
  • Comparable-brand revenue climbed 2.8% -- a nice acceleration from 0.1% growth last quarter, and within WSM's guidance range of 2% to 5% -- including:
    • 1.2% growth at Pottery Barn.
    • 1.9% growth at Williams-Sonoma.
    • 10.1% growth at West Elm.
    • 0.2% growth at PBteen.
    • A 3.9% decline at Pottery Barn Kids.
  • E-commerce revenue rose 5.2% year over year to $631 million, while retail revenue rose 2.1% to $571 million.
  • The company repurchased 1,160,381 shares of common stock for $55 million during the quarter, at an average cost of $47.41 per share. That left $317 million remaining under Williams-Sonoma's current repurchase authorization.

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What management had to say

Williams-Sonoma CEO Laura Alber added:

Our second-quarter results with accelerated revenue and comp growth of 3.7% and 2.8%, respectively, demonstrate that the investments and actions we have undertaken to deliver value, quality, and excellent customer service are driving improved top-line performance. These results reflect the strength of our brands and our competitive advantages, as well as our relentless focus on our initiatives to drive innovation and operational excellence. And we are aggressively building upon these initiatives to further differentiate ourselves and to drive profitable growth.

Looking forward

For the third quarter of 2017, Williams-Sonoma expects revenue in the range of $1.27 billion to $1.31 billion, once again assuming comparable-brand revenue growth of 2% to 5%. That should result in third-quarter earnings per diluted share of $0.80 to $0.87.

Finally, for the full fiscal year of 2017, Williams-Sonoma continues to expect revenue of $5.165 billion to $5.265 billion, comparable-brand revenue growth of 1% to 3%, and adjusted (non-GAAP) 2017 earnings of $3.45 to $3.65.

All things considered, this was another solid step in the right direction for Williams-Sonoma as it successfully navigates today's difficult retail environment.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Williams-Sonoma. The Motley Fool has a disclosure policy.