If anyone was concerned about a possible slowdown in the home products business, they should talk to Laura Alber over at Williams Sonoma.
Yesterday, the multi-brand home furnishings retailer put up numbers for its second quarter that were nothing short of spectacular. Not only that, but the company remains joyously buoyant about the prospects for its business going forward and expects to hit its $10 billion-a-year annual sales goal in 2024, a year faster than earlier projects.
Wall Street loved what they were hearing today – especially the 80% increase in profits per share and the robust forecast — with the stock up more than 16% by mid-morning, even briefly touching its all-time high at the opening bell. A 20% increase in its dividend didn’t hurt either.
As such Sonoma stands in sharp contrast to two other big players in the home space, Home Depot
No such thing at Sonoma. “The momentum we are seeing in our business and our winning positioning set us up to continue to take share in a fractured market,” Alber said in releasing results that showed nearly a 30% increase in comp sales business, an astonishing performance even if some of its stores might have been closed for some portion of the period last year due to Covid shutdowns. E-commerce was up 16% and accounted for about two-thirds of the company’s overall sales for the quarter.
“We do not see any evidence that growth trends are waning, and in fact, we see favorability in the macro environment as more people prioritize their homes and home décor. In addition, our growth strategies are gaining traction faster than we predicted, and our key differentiators are further distancing us from our competition.”
Big talk but Sonoma had the big results to back it up: Pottery Barn, its biggest nameplate, up 30% in comp sales, driven by its third party marketplace, bath and several other classifications; West Elm up 51%, with triple digit increases in upholstery and outdoor products; Pottery Barn Kids and Teens up 18% with its baby business up 30%; the Williams Sonoma kitchen brand up 6.4%, with more exclusive products and less promotions producing better results; and Williams Sonoma Home
Another part of its business that produced strong results across multiple brands was its business-to-business sales, which hit $180 million this quarter on their way to $700 million for the year and eventually going to $2 billion Alber said. Sonoma’s bridal registry business, one that suffered last year during pandemic conditions that saw a significant drop in weddings, soared 98% this quarter.
Putting it all together anybody who had doubts about the performance of Sonoma individually or the broader home products sector as people start to travel and spend on out-of-home activities can probably sit back and relax.
That’s what Williams Sonoma and Alber are thinking. “We believe we are at the intersection of a transformative change that will accelerate the growth of our industry, and our market share within the industry.”