Q1 2018 performance
Williams-Sonoma (WSM) posted revenue of $1.20 billion in the first quarter with retail sales forming 46.3% of the total revenue, while e-commerce generated 53.7%. Strong SSSG (same-store sales growth) of 5.5% helped the company outperform analysts’ estimate of $1.16 billion.
Year-over-year, WSM’s revenue grew 8.2% from $1.11 billion in the corresponding quarter of the previous year. The revenue growth was driven by growth in both retail as well as E-commerce sales.
During the quarter, revenue from retail sales increased 4.9% to $556.8 million. The revenue growth was driven by positive SSSG of 5.5%, and a new accounting standard, which contributed 1.2%. By the end of the first quarter, the company operated 627 company-owned stores. It opened three new stores and closed seven. It has also added eight franchised stores across Mexico, South Korea, and the Middle East, during the quarter.
The segment posted revenue of $646.2 million, which represents growth of 11.3% from $580.5 million in the corresponding quarter of the previous year. The revenue growth was driven by customer experience enhancement through two main differentiators, content, and convenience.
The company updated its shop paths with more accurate and compelling content. Also, it added mobile wallet options, such as PayPal and Venmo, to increase convenience for customers. To provide visibility and more control to customers in the delivery process, WSM has introduced an online self-service scheduling system for in-home delivery. Also, the new accounting standard contributed 1.3% to the segment’s revenue growth.
For 2018, WSM set its revenue guidance in the range of $5.50 billion to $5.66 billion with SSSG of 2% to 5%. The company’s management expects its second-quarter revenue to be in the range of $1.25 billion to $1.28 billion with SSSG of 3% to 5%.
For the next four quarters, analysts expect the company to post revenue of $5.66 billion, which represents growth of 5.1% from $5.38 billion in the corresponding four quarters of the previous year.
Next, we’ll look at WSM’s SSSG.