Williams-Sonoma (WSM) Tops Q4 EPS by 8c, Revenues Beat, Comp. Sales Up 7.6%

March 18, 2020 4:20 PM EDT

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Williams-Sonoma (NYSE: WSM) reported Q4 EPS of $2.13, $0.08 better than the analyst estimate of $2.05. Revenue for the quarter came in at $1.84 billion versus the consensus estimate of $1.82 billion.

FOURTH QUARTER 2019

  • Comparable brand revenue growth accelerates to 7.6%, with positive comparable revenue growth in all brands, including West Elm at 13.9%, Pottery Barn at 6.7%, Pottery Barn Kids and Teen at 7.9% and Williams Sonoma at 3.3%
  • Gross margin of 37.6%, which includes the impact of reduced year-over-year occupancy leverage of approximately 60bps as a result of the 53rd week in FY 18
  • Occupancy costs were $181 million, relatively flat to last year
  • Strong SG&A leverage of approximately 80bps across employment and advertising
  • GAAP operating margin of 11.0%; non-GAAP operating margin of 11.6%
  • GAAP diluted EPS of $2.10; non-GAAP diluted EPS of $2.13

Laura Alber, President and Chief Executive Officer, commented, “2019 was an outstanding year for our company. We delivered a strong holiday season, outpacing the industry with comparable brand revenue growth of 7.6% in the fourth quarter. West Elm outperformed with a comp of 13.9%, the Pottery Barn brands’ resurgence continued with a combined comp of 7.1%, and the Williams Sonoma brand returned to growth with a comp of 3.3%. The drivers of our outperformance include an expanded, more relevant product assortment, new customer acquisition and further innovations in our customer experience across e-commerce, stores and the supply chain. Our cross-brand initiatives business to business, The Key and in-home Design Crew also continued to scale and become more impactful accelerators of our growth. For the full year, we achieved our goal of maximizing growth and maintaining high profitability with topline and non-GAAP EPS growth at the high-end or above expectations and operating margin expansion. It is clear from these results that our continued evolution and innovation are setting us apart from the competition. This culture is woven into our design-driven products, our digital-first model, and in our commitment to sustainability leadership. And together with our strong growth initiatives, we have a winning combination.”

Alber continued, “Looking ahead to 2020, it is hard not to acknowledge the devastating impact that the coronavirus outbreak is having on communities around the world. Our thoughts are with all of the people affected and our top priority is the safety and well-being of our associates, our customers and our business partners. And, we are taking action to prepare and adapt our business in this time of uncertainty. We would like to thank our people for all their hard work and for their continued commitment to serving our customers as we navigate this challenging time together.”

GUIDANCE

In light of the recent proliferation of the coronavirus and the increasing uncertainty in the current operating environment, the Company is temporarily suspending the provision of Fiscal Year 2020 guidance.

Long-Term Financial Targets

  • Total Net Revenues growth of mid to high single digits
  • Non-GAAP Operating Income growth in line with revenue growth, driving Operating Margin stability
  • Above-industry average ROIC

For earnings history and earnings-related data on Williams-Sonoma (WSM) click here.



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