A prominent American retail group has reported a 2.9% decrease in Q3 sales, totalling $1.8 billion compared to $1.85 billion in the previous year. However, net earnings rose to $248.9 million from $237.2 million, reflecting operational improvements and strong profit margins. The group is Williams-Sonoma, Inc., the parent company of brands like Pottery Barn and West Elm.
Photo: West Elm.
'We are pleased with the results of our third quarter, beating both top and bottom-line expectations. The quarter was driven by continued improvement in our sales trend, market-share gains, and strong profit. In Q3, our comp came in at -2.9%, with an operating margin of 17.8%, delivering a 7.1% increase in earnings per share to $1.96. Our operating results reflect the operational improvements that we have been focused on all year, and demonstrate the strength of our margin profile in a difficult environment,' says Laura Alber, President and Chief Executive Officer.
Alber concludes, 'Our strategy of focusing on returning to growth, enhancing our world-class customer service, and driving margin is working. And, as we head into the last quarter of the year, we are optimistic and confident about our business. The fourth quarter is the time of year when we shine. And, therefore, we are raising our full-year guidance. We now expect full-year revenues to come in at a range of down 3% to down 1.5%, and we are raising our guidance on operating margin 40 bps to be in the range of 17.8% to 18.2%.'
West Elm's sales declined 3.5% to $451 million, while the Williams-Sonoma brand saw a minor 0.1% drop to $252 million. Pottery Barn experienced a sharper 7.5% revenue decline, generating $718 million.
Outlook
The company is now raising its fiscal 2024 guidance to reflect higher net revenue trends and higher operating margin expectations. In fiscal 2024, the company expects an annual net revenue decline in the range of -3.0% to -1.5% with comps in the range of -4.5% to -3.0% in fiscal 2024.
More information:
Williams Sonoma
www.williams-sonoma.com