SAN FRANCISCO — Williams-Sonoma Inc. reported third quarter revenues that were up 16% over the same period last year.
For the quarter ended Oct. 31, net revenues for the company were up to $2.05 billion, bringing the revenue increase to 41.3% over the same period in 2019.
“Our performance demonstrates that we can continue to take share in a fractured market, and deliver high-quality sustainable earnings,” said Laura Alber, president and CEO, in an earnings release. “As a result, we are raising our full-year outlook to reflect revenue growth of 22% to 23% and operating margins of 16.9% to 17.1%.”
E-commerce revenue accelerated to 67% of total company revenues, and comparable brand revenue growth was led by West Elm at 22.5%, followed by Pottery Barn Kids and Teen at 16.9%, Pottery Barn at 15.9% and Williams Sonoma accelerating to 7.6%.
Net income for the quarter was $249.4 million, with diluted earnings per share of $3.29, up from $201.7 million and EPS of $2.54 in the year-ago period.
“It is no surprise that we have been intensely focused on the bottlenecks around the world since we are not immune to the ripple effect. We want to share the extraordinary accomplishment that our upholstery lead times continue to improve and are industry-leading,” said Alber on the quarterly earnings call with investors. “Our in-house domestic capabilities, our long-term vendor relations and our scale have minimized our production and delivery delays relative to our competitors, and to date, 85% of our holiday inventory has been received.”
On the call, Alber said the upholstery business is very strong, and customers responded well to new products, including bestsellers and bedroom, dining and occasional categories. Additionally, new categories such as bath, kids and kitchens also contributed to incremental growth.
The company reported its liquidity position of $657 million in cash and more than $788 million in operating cash flow, enabling the company to repurchase an additional $201 million in shares in the third quarter and more than $650 million year-to-date and to pay more than $135 million in dividends.
“As we have said all year, given our record levels of profitability, we have been strategically and aggressively investing in high ROI advertising to drive new customer acquisition, retention, and top line growth which clearly is working,” said Julie Whalen, Williams Sonoma executive vice president and CFO, on the earnings call. “We continue to see record new customer counts and strong demand which has benefited our business to date and will continue to drive growth well into the future.”
Williams-Sonoma raised its fiscal year 2021 outlook to 22% to 23% net revenue growth and the non-GAAP operating margin between 16.9% to 17.1%.
“The most important change that we’ve made is to not run site-wide promotions,” Alber added. “And that was a change that we started to test into before the pandemic, and then got bolder after we saw the results. And, it really speaks to the pricing power that we have because we are one of the only people who design and source their own products. We’re not selling other people’s things to the same extent that a lot of other people in the space are. So you can’t compare the price. We are not looking to change our value equation, though. At the same time as we have stopped the promotions, we are giving our customers better value.”