First quarter sales at Williams Sonoma were up as the company’s chief executive said she was pleased with results as the retailer faces a number of challenges.
For the 13 weeks ending May 1, total net revenue was $1.891 billion, up from revenue of $1.749 billion in the comparable quarter the previous year. Net earnings were $254 million, an increase over net earnings of $227 million in the first quarter of 2021. Diluted earnings per share of $3.50 was an increase of 20.7% on a GAAP basis.
Company-wide comparable store sales were up 9.5%. The company’s first quarter comparable store sales were up 40.4%. By brand, Pottery Barn comparable sales were up 14.6%, West Elm up 12.8%, Williams Sonoma stores down 2.2% and Pottery Barn Kids and Teens down 3.1%.
“As a company, we are prepared to manage through economic uncertainty,” Laura Alber, Williams Sonoma president and CEO said during the company’s quarterly conference call. “We are a multichannel portfolio of brands with a management team that has expertise and experience in managing through historical times of economic challenge.”
One of the many challenges facing retailers such as Williams Sonoma is supply chain and inventory levels. She noted that the Williams Sonoma division was negatively impacted by out-of-stocks, most notably in key collections of exclusive products.
“On a three-year basis, on-hand inventories are down almost 40% in Williams Sonoma on sales growth of 30%,” she said. “We are focused on getting more in stock, and we believe we will see the recovery before the fourth quarter.”
Looking ahead, Alber is bullish on several consumer trends that she believes will have a positive impact on Williams Sonoma sales going forward.
“The current economic environment is challenging, but the housing market remains strong,” she said. “Hybrid work means people will continue to spend more time in their homes and the rising costs related to gas and travel have historically led people to stay at home to cook and entertain. We believe that these three trends will result in continued momentum to outfit and improve the home.”
Albert also pointed to the success of two of the retailer’s emerging brands, Rejuvenation and Mark & Graham. Together, these brands had a 31% comp increase in the first quarter, she said.
“We are confident in these brands and their ability to contribute to the long-term growth of our company,” Alber said. “In fact, we believe Rejuvenation, which is on track to generate more than $200 million in revenue this year, has the potential to be our next $1 billion brand.”