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WSM Beats Comparable Brands Sales Growth Estimates in Q2 2018

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Aug. 27 2018, Updated 6:32 a.m. ET

Comparable brands sales growth

Williams-Sonoma (WSM) posted comparable brands sales growth of 4.6%, outperforming analysts’ expectations of 4.1%. The comparable brands sales include sales from both retail and e-commerce. During the quarter, Pottery Barn, West Elm, Williams Sonoma, and Pottery Barn Kids and Teen posted comparable brands sales growth of 2.0%, 9.5%, 1.6%, and 5.7%, respectively.

According to Williams-Sonoma, the company has been focusing on digital leadership, product innovation, and retail transformation to drive its sales. In November 2017, the company acquired Outward, a 3D imaging and augmented reality platform. The company is in the process of integrating the platform with its existing processes.

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The digital advertising investments and product innovation strategies that Williams-Sonoma initiated in 2017 has led to double-digit growth in its digital customers. Since the company’s cross-brand loyalty program, The Key, was replatformed in the first quarter, the program has been gaining enrollments at a faster pace. The company’s average consumer spending has also increased.

During the quarter, Williams-Sonoma deployed a new algorithmic recommendation engine and guided shopping tool for its West Elm brand, which led to an increase in its customer spending. The company also redesigned its home website and has integrated Outward’s technology for customers to visualize its products in a variety of settings.

Moving to retail, WSM has been investing in remodeling its stores and is focusing on achieving operational excellence to improve its customer service and reduce costs. All these initiatives drove the company’s comparable brand sales during the quarter.

Outlook

With its strategical digital investments yielding positive results, Williams-Sonoma (WSM) has raised its 2018 comparable brand sales growth to 3.0%–5.0% from its previous guidance of 2.0%–5.0%. The company’s management also expects its comparable brand sales growth to reach 3.0%–5.0% for the third quarter.

Next, we’ll look at Williams-Sonoma’s second-quarter margins.

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