Williams-Sonoma profits up 28 percent
By Don Hogsett -- Home Textiles Today, 3/22/2004
SAN FRANCISCO — Building sales at rapid double-digit pace, and at the same time hacking away at costs, diversified specialty retailer Williams-Sonoma Inc. pushed fourth-quarter profits up by 28 percent, to $102.1 million from $79.8 million last year.
Helped by a big boost in direct-to-customer sales — now more than a third of all merchandise sales — overall sales increased by 16.9 percent, to $1 billion from $859 million a year ago.
Same-store sales grew by 4.1 percent. Same-store sales in outlet stores rose by 7.9 percent — Williams-Sonoma stores up 4.8 percent; Pottery Barn up 4.3 percent; Pottery Barn Kids down 1.1 percent; and Hold Everything down 2 percent.
In a big lift to the top line, direct-to-consumer sales grew by 26.3 percent, to $322.2 million during the closing quarter, rising more than twice as fast as sales in retail stores, which advanced by 12.2 percent, to $625.1 million.
The big gain, the retailer said, was largely driven by Pottery Barn and Pottery Barn Kids, in addition to incremental sales from the new PBTeen brand. Internet sales shot up by 74 percent, to $120.9 million from $69.5 million.
Fueling the bottom-line growth, in addition to the stronger sales, were deep cuts in costs. Expenses declined to 27.5 percent.
| Qtr. 2/1 (x000) | 2003 | 2002 | % chg |
| Sales | $1,004,281a | $858,964a | 16.9 |
| Oper. income (EBIT) | 165,764 | 129,146 | 28.4 |
| Net income | 102,116 | 79,772 | 28.0 |
| Per share (diluted) | 0.85 | 0.67 | 26.9 |
| Average gross margin | 44.1% | 44.0% | — |
| SG&A expenses | 27.5% | 29.0% | — |
| 12 months | 2003 | 2002 | % chg |
| Sales | 2,754,000b | 2,360,000b | 16.7 |
| Oper. income (EBIT) | 254,787 | 202,302 | 25.9 |
| Net income | 157,211 | 124,403 | 26.4 |
| Per share (diluted) | 1.32 | 1.04 | 26.9 |
| Average gross margin | 40.3% | 40.3% | — |
| SG&A expenses | 31.1% | 31.7% | — |
| a-Total sales, including retail sales, of $625.1 million, up 12.2 percent from $557.1 million; retail shipping fees of $2.3 million, up 7.6 percent from $2.2 million; direct-to-customer sales of $322.2 million, up 26.3 percent from $255.2 million; and direct-to-customer shipping fees, up 22.8 percent from $44.5 million. b-Total sales, including retail sales of $1.6 billion, up 14 percent from $1.4 billion; retail shipping fees of $7.5 million, up 1.5 percent from $7.4 million; direct-to-customer sales of $966.4 million, up 21.1 percent from $798.2 million; and direct-to-customer shipping fees of $165.6 million, up 19.4 percent from $138.6 million. |
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