Williams-Sonoma president and CEO Laura Alber credited the strength of the company’s brands across retail and e-commerce for its performance in the fourth quarter ended Feb. 2.
“Williams-Sonoma outperformed the retail industry this holiday season, gaining market share and demonstrating the structural advantage of our multi-brand, multi-channel platform,” said Alber. “We executed our strategic plan, investing in our brands and the supporting infrastructure to ensure sustainable long-term growth both domestically and around the world. The results speak for themselves: we delivered strong top and bottom line performance, which combined with over $350 million in share repurchases and dividends generated superior returns for our stockholders.”
Net revenues increased to $1.5 billion in quarter from $1.4 billion in the prior-year quarter. This year’s fourth quarter had just 13 weeks compared to last year’s fourth quarter, which had 14; excluding the additional week in the prior-year quarter, net revenues grew 10%.
Comparable brand revenue growth in the quarter increased 10.4% on top of the prior-year quarter’s 4%. Pottery Barn comparable-store sales grew 14.6% in the quarter, compared to the prior-year period’s growth of 4%. Williams-Sonoma grew 2.3%, compared to the prior-year quarters 1.7% decrease. Pottery Barn Kids grew 11.2%, compared to the prior-year period’s 7.7% increase. West Elm grew 18.3%, compared to the prior-year quarter’s 19.1% surge. PBteen grew 9.6%, compared to the prior-year period’s 6.4% growth.
Direct-to-customer (DTC) net revenues in the quarter increased to $706 million from $634 million in last year’s quarter. Excluding the additional week in the prior-year quarter, DTC net revenues grew 19%, primarily driven by Pottery Barn, Pottery Barn Kids, West Elm and Williams-Sonoma. DTC net revenues generated 48% of total company net revenues in the quarter, compared to 45% in prior-year quarter.
Retail net revenues in the quarter were $760 million versus $773 million in the prior-year quarter. Excluding the additional week in last year’s fourth quarter, retail net revenues grew 2.7%, primarily driven by Pottery Barn and West Elm, partially offset by a decrease in Williams-Sonoma and the company’s international franchise operations.
EPS in the quarter increased to $1.38. Excluding the additional week in last year’s quarter, EPS increased 8.7%.
“These results confirm that our key strategies are working, and position us well for 2014 and beyond. In all of our brands we develop product that is inspiring, relevant, high quality and competitively priced,” said Alber. “We believe that our lifestyle merchandising approach, together with our high-touch service model, separates us from commoditized offerings as we help our customers decorate, entertain, and create the homes of their dreams. Our multi-channel marketing, built from decades of data analytics experience, enables us to reach our customers and attract new ones in increasingly relevant ways. Our e-commerce business, which represented 44% of our net revenues in fiscal 2013, is growing rapidly, allowing us to capture even greater market share as more consumers transition to online shopping in our categories. Our vertically integrated supply chain is enabling us to deliver exceptional quality and value to our customers. Underlying all of these initiatives is our culture of strong financial discipline, integrity, and a commitment to social responsibility. We remain confident in our brands, our leadership team, and our ability to execute our plan. We look forward to continuing to deliver long-term value for our stockholders.”
Looking ahead to the first quarter, the company anticipates net revenues to be in the range of $920 million to $940 million, and comparable brand revenue growth to be in the range of 4% to 6%. The company expects diluted EPS in the first quarter to be in the range of $0.41 to $0.44.