Williams-Sonoma’s is teeing up to be proof that retailers can still thrive even with growing threats such as Amazon, tariffs, and e-commerce lurking in the water. With non-GAAP earnings beating consensus estimated by 13.2%, 77 cents per share, Williams-Sonoma shares have seen highs of 16.5% in reaction to the expectation beating results.
Revenues are up 6.1% year-over-year, totaling at $1,275.2 million. The companies brands Pottery Barn, Pottery Barn Kids and Teen, and West Elm all also reported steady revenue growth. Additionally, a majority of net revenues came from their e-commerce segment, accounting for 53.9% of revenues in the 2nd quarter.
In an environment where most retailers are struggling to thrive, Williams-Sonoma has seemed to break through the rough and get back to growing. The company has made strategic changes allowing them to compete both on the brick-and-mortar retail market and the online retail market. As a matter of fact, this quarter, over half of Williams-Sonoma’s sales were via their e-commerce channel.
In addition to online sales helping the company grow, Jim Cramer mentioned that Williams-Sonoma has begun to focus more on having their brick-and-mortar locations to serve more as a “showcase.” Although e-commerce is on the rise there are still many buyers who prefer visiting physical locations, such as lifestyle brands like Williams-Sonoma.
CEO Laura Alber says the company is focused on both its online and brick-and-mortar sectors as there is still value in both. Although online retail giants like Amazon are on the rise, there are some products consumers are more likely to purchase at a brick-and-mortar, such as furniture.
Williams-Sonoma’s perpetual pitfall has always been their supply costs, but Jim Cramer boasted that this is being fixed. In recent quarters they have been able to lessen the burden of supply costs. Additionally, with their multi-country supply-chain, Williams-Sonoma would not feel heavy effects of any tariffs between US-China trade.