Williams-Sonoma profit surges 8.1% in fourth quarter
Clint Engel -- Furniture Today, March 8, 2012
SAN FRANCISCO, Calif. — Williams-Sonoma reported an 8.1% increase in fiscal fourth quarter net profit, driven in part by impressive e-commerce and catalog sales gains for its Pottery Barn and West Elm brands.
Net earnings for the home products specialty giant grew to $122.6 million for the quarter ended Jan. 29, up from $113.4 million for the same period a year ago.
Net revenues for the period increased 6.1% to $1.27 billion and comparable brand revenues - similar to same-store sales, but including sales from catalogs and e-commerce - increased 6.6%.
For the year, the San-Francisco-based retailer posted an 18.3% gain in net earnings to $236.9 million and a 6.2% increase in net revenues to $3.72 billion. Comparable brand revenues increased 7.3%.
Williams-Sonoma's biggest gains came from its non-store business, as fourth quarter direct-to-customer net revenue increased 13.8% to $531 million, led by Pottery Barn and West Elm. E-commerce revenues jumped 18.1% to $465 million.
Retail net revenues for the quarter increased 1.1% to $737 million, and were primarily driven by increases at Pottery Barn, West Elm, Pottery Barn Kids, and international franchise operations, the company said. Gains were partially offset by a decrease in sales at the Williams-Sonoma brand and from the closing of its Williams-Sonoma Home stores during the fourth quarter a year ago.
Excluding the Williams-Sonoma Home store results, retail net revenues increased 2.2% in the quarter and same-store sales increased 1.1%.
Fourth-quarter comparable brand revenue grew 11.3% for Pottery Barn, 6.4% for Pottery Barn Kids, 34.5% for West Elm and 0.7% for PBteen. Comparable revenue was off 2.3% for Williams-Sonoma, which includes Williams-Sonoma Home direct-to-customer net revenues.
"As we look forward to 2012, we continue to be laser-focused on our customers - putting them at the center of everything we do," President and CEO Laura Alber said in a release.
She listed several initiatives on the retailer's plate, including investing in its supply chain and developing new business inside and outside of its existing brands. Alber said capital spending for the year will jump to $200 million to $220 million, from $130 million last year, to drive these initiatives.
She added the company will invest an incremental $15 million to $20 million to support "long-term e-commerce, global expansion and business development."
For this fiscal year, William-Sonoma expects total net revenues to increase to the $3.93 billion to $4.02 billion range for a 53-week period. That would be a 4-6% increase vs. a comparable 53-week period. Comparable brand revenue is expected to increase 3%-5% - less than the 7.3% increase for this past fiscal year.
It also guided down on same-store sales growth - looking for a 1%-3% gain compared to a 3.5% gain this past year.