Williams-Sonoma (NYSE: WSM) reported Q1 EPS of $0.74, $0.89 better than the analyst estimate of ($0.15). Revenue for the quarter came in at $1.24 billion versus the consensus estimate of $1.02 billion.

• Total comparable brand revenue growth of 2.6%, including e-commerce comps accelerating to 31.2%
• GAAP diluted EPS of $0.45; Non-GAAP diluted EPS of $0.74
• Solid liquidity position with over $860 million in cash

FIRST QUARTER 2020

• Net revenues of $1.235 billion were relatively flat to last year despite stores being temporarily closed for most of the quarter, driven by a significant acceleration in e-commerce revenue growth to over 30%
• Total comparable brand revenue growth of 2.6%, with positive comparable revenue growth in almost all brands, including Pottery Barn Kids and Teen at 8.5%, Williams Sonoma at 5.4% and West Elm at 3.3%
• Higher year-over-year merchandise margins; gross margin deleverage reflects the impact from higher shipping costs and occupancy deleverage
• Occupancy costs were $175 million, relatively flat to last year
• SG&A leverage of approximately 80bps, reflecting improved advertising ROI and the positive impact of cost reductions across the business
• GAAP operating margin of 3.9%; non-GAAP operating margin of 6.4%
• GAAP diluted EPS of $0.45; non-GAAP diluted EPS of $0.74
• Maintains strong liquidity position of over $860 million in cash, further strengthened by the one-year extension of the $300 million term loan and a new $200 million unsecured revolving facility, which has not yet been drawn upon
• Board of Directors declares quarterly cash dividend of $0.48 per common share, reflecting strong commitment to shareholder returns

“As the COVID-19 health crisis continues to impact our daily lives, our deep gratitude goes to all of the people who are taking care of our communities in the fight against this pandemic. We also want to thank our associates for their agility, commitment and partnership in continuing to meet our customers’ needs while prioritizing the health and safety of each other, our customers and our communities,” said Laura Alber, President and Chief Executive Officer.

“In this highly disrupted environment, we are proud to deliver 2.6% comp growth in the first quarter, despite having all of our 616 stores closed for more than half of the quarter. Our large e-commerce business had breakout comp growth in the second half of the quarter and continues to accelerate. Our teams maximized demand online, leaning into new and innovative ways to engage and serve our customers virtually. We gained market share with strong new customer growth in our DTC business, giving us even more confidence in the growth trajectory of our e-commerce business longer term,” Alber continued. “The resilience of our business through this crisis exemplifies the advantage of our unique multi-brand, multi-channel platform and our commitment to all of our stakeholders. Nothing makes me prouder than to have achieved our results while staying true to our company’s core value of taking care of our people, customers and communities. Our strong financial position and fortress balance sheet have allowed us to support our associates with pay continuation, while giving back to support relief efforts in our local communities.”

Alber concluded, “Reflecting on the longer term, this crisis has accelerated our industry’s shift to e-commerce, and given rise to a newfound appreciation for the home. We believe that with our differentiated value proposition of sustainable, design-led products and a powerful digital first platform, we are well positioned."

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