WSM - Earnings call transcript Q3 2021

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Operator

Good day and welcome to the Williams-Sonoma Third Quarter 2021 Earnings Conference Call At this time, all participants are in a listen-only mode. A question-and-answer session will follow the conclusion of the prepared remarks. I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead.

Jeremy Brooks

Good afternoon and thank you for joining our third quarter earnings call. fourth you with this and respect including for remind make we financial to guidance statements, XXXX. forward-looking to the like that call during will performance I'd of quarter future events

these obligation we today's revise from information, cannot to will our may Company available statements materialize expectations. these and these results any actual no assurances we reflect best after The make our arise Although, or estimates call. to believe events may or all circumstances and that of any publicly update statements statements reflect different undertakes significantly that the

an Additionally, measures call why replacements explanation refer measures, earlier certain for annual SEC. Exhibit to X comparable use GAAP the we also the with These with appears A the periodic should with with measures. considered today. be we should conjunction results. be will together in these most read issued directly of non-GAAP press should in financial along our and our release and measures, to This be financials non-GAAP we to of how not GAAP measures and considered reconciliation

IR recorded, the available our Finally, replay website. will being a on be call and is

to like Laura Now, call Executive our the to Chief I'd President and turn Alber, over Officer.

Laura Alber

and Furthermore, take quality and of a demonstrates margin we to high a are distinctive market to everyone an sustainable operating two-year function growth points. you deliver afternoon, accelerated with and execution thank us. the of our basis market proud performance of joining expansion in deliver building earnings. XX.X%, and Good that of positioning These strategies. successful our yet to against all fractured outperformance We're extremely for comps share of another continue quarter advantages XX our long-term can stack results XX.X%, in both the our

the to our As Customers revenue channel margins product operating of responding result, to are drive we to year of to expect XX.X%. XX.X% and our reflects full outlook an strategies, growth beyond. and are year XX%, clearly we raising finish a XX% and and outstanding

On the from smaller front, with fragmented more its remains retailers. industry and the macro than sales of half generated brick-and-mortar large

of almost more market one trillion strongest and opportunity. to an of are the have market capture $X opportunity incredible We players

We both on pivotal and of in intensely work. we point and of to larger market a are the this ability focus homes. continues second way change with capitalize at share. we in our change, to purchases And unique first turn strong live hold housing on market The capture will and

gain the model. to a trends entertaining Both and result for work working, cooking. outfit desire these the continue arrangements as traction work home permanent and hybrid of in Additionally, stronger need to

including is another purchases addition, of make the dynamics lasting the behavior, of segments bolster shift their stay-at-home Certain the naturally In the pure to shift ecommerce to a as have large in millennial investment continue company. a and yet and of from generation without digital online. service first, a to positioned their years, digital by players impact And customer the a towards who retail an of factors of pandemic the entrance point benefit business, players but occupied digital this gravitate not ecommerce we industry of made are we only market the not trend element significant in believe who uniquely home capabilities, formation disruption consumer the into purchasing.

Our in-store. online who shop incredible cross and channel both shopping customers experience our store satisfies

place of demand to in importance continue prioritization many sustainability. customers Our and instances on the

are and the that fact, want to support XX% of in driven good purpose world In doing share. today almost we brands consumers

to company In our be the provides online, specific the consumer trends housing differentiators. opportunities a the fragmented to continue these company are and perfect And and market, home consumer sustainability key with for led Our demand shift committed company fit and values grow. our the industry. in to furnishings strong industry, is of for to sustainable being the proud short, a the leader unique macro is sizeable

Our engineer allows products our relevant in-house quality to offer high products. exclusive, capabilities ability adept our and us design to along value with

to strategy our and and This business the competitive customer industries. serve. and which base grow our deliver a edge combined in places. in Our strategies base our of also been are and which has business, future geographies reach new only diversity, opportunities, but current expands marketplace and not our many dominant provides which marketplace retail and an both expansion to which the into exciting channel communities the and the underserved massive to new drives to to home, we core global spaces and brand and customers, fundamental will principles Williams-Sonoma to future for presents tends profile diversification customer These geographies, embedded in BXB have expansion rooted central players. This and for in customers solutions the brings cross exciting our scaling. of the high-end expansion momentum reaching an is which for of opportunities sustainability, products across market actions. luxury our businesses new scaling of potential equity our From And our to our values opportunities course in growth and continue be inclusion drive to deeply and compared provide sizeable non-negotiable are underserved,

the share take many our long-term prospects the continue macro that earnings our fact, well in in opportunities these it's chapter Simply and in deliver have to growth. drive key result our combined ability shifts, us future. believing into put, growth market and business to We next to of differentiators with strongly forward our into

which extraordinary been a status the of all not all. let's is for review I effect and that take know you around the accomplishments chain of top want the world. team. with we are minute we mind the Before and bottlenecks I about short-term long-term to the Like share from ripple a immune companies, the QX, delays. is surprise to talk our intensely supply supply to no on we It focused chain, have

vendor already calls been finally, this important a we received. have center. facing that do service result decisive to scale times receipts when Our our declines responsiveness, as lead we competition. highlight industry house of I have our leading our upholstery which And holiday have are to the XX% immediate approximately and all a And said, priority, escalations, result, in some delays, challenges want as capabilities, as and disruptions. supply strong result to and our a production customer All delivery care resulted minimized and continue has our relationships, and of chain relative cancellations our of our delays our long-term in domestic improve is in into

is you of shut significant which factories out months. saw down amount sizable First, since we ramp of know, a has three they as as Vietnam, up. across reopened, but for inventory country backlog has experiencing This recently

As businesses. a furnishings result, are children's we home inventory experiencing some particularly in delays our

the and of are until our inventory delays, business across we XXXX. not recovery impact do of we given strong demand the the our seeing of Second, the Vietnam middle levels ongoing expect full

strong, Elm growth. comp dining outperforming let's responded of our well the with customers quarter, quarter. to which driving all and occasional turn the to strong a The new including brands ability XX.X% and of and with Now, clearly third all bedroom, results products, very strength and execute delivered this categories. demonstrates our to business West again is categories upholstery the business bestsellers

Barn another of and kids performance a with driven product also such kitchens to delivered contributed categories, growth. categories growth new incremental as high Additionally, by decorating quarter in XX.X%, including our bath, strong seasonal all Pottery comp business.

Pottery our services, furniture and with Kids core and grew Barn saw sustainability across strong, a lifestyle our decisions. In furniture advantage our our the our our addition, such Gold initiatives commitment to design proprietary category, strengths for and marketplace XX.X%. we Teen and customers Certified importance assortment. as furniture and buying apartment curated aesthetic comp emphasizing both demand our of our design of The GREENGUARD remained growth

in products intensified response and our grow, to as and relevant an we results. saw key us a continues for has high inventory customers online products our key yield holiday business believe exclusive categories, our And made despite partnerships baby the the vendor strong in products. growth experience, the store to momentum demand quarter. the continued improvements constrained products with allowed and our Operationally, accelerated Our holiday comp strength with increase by items. brands innovation, entertaining to assortments, positions our across WS branded Williams-Sonoma families, and in driving driven demand X.X% product to and to environment. a Both to in chain Halloween key focus we and high and edited and supply and the categories, offerings record Thanksgiving gifting expand The all accelerate

our our ongoing deploy Finally, membership while a program, initiatives last brand engage develop app with to new supporting brand, reserve launched recipe and week, both of content provide which new the distribution. for a customers to the way and strategic a

accomplishments a The growth market light this grade BXB million increase an and last significant the online our year. but quarter biggest we ever our to to reopen, as produce to largest Williams-Sonoma our refined digital share. business of doubled year Our businesses and contribute the brand clients enhancing that accelerating Home outperform, capital project This we curated over long-term. lineup will initiatives Cross building with on pipeline. global that brand our furniture destination, we're acceleration are result and in with cross Significant growth franchise to opportunities be business, the excited XXX capturing performance, Home share industries a business last In believe opportunities. is a presentations, focused include growth our a we model. across also one appealing disciplined additional of strategy also expansion, contract initiative new of continues over continues assortment growth nearly record added see through business as and and brand of of Williams-Sonoma brand, of premium generating to large diversification businesses a XX% sales reposition as our

quarter, first store out ecommerce country success. capabilities in franchise opened rolled that across This India, and we great to our

forward, look digital around see the opportunities to we we As lead additional world. in

brands will of on the shopper is of total cross surprisingly, promote incremental spend that and volume brand are selling impact and brand the at Additionally, including total brands continue metrics selling of significant shopping to customers for customers customers of results. levels. our initiatives share to our the multiple across these yield span a have Cross Not to record across single a percent with long-term. our customer increasing a

loyalty two payment. advantage The initiative This of customers, tiers all for of our its irrespective twofold. is and brands. programs apply method the capture loyalty new launched and We many where cross about can card to of this quarter, are customers our earn credit this programs we have purchase brand in any acquire in initiatives existing our help loyalty of opportunity. Also of program retain excited complements us credit, tenders. we their new These of rewards for program our place

as of previously know the First, more with customers three wallet than two advantage. with to opportunity times our our of the customers. have competitive industry. if Few single multi-brand complementary we And to our an customer. portfolio shared brand with these share a any increase is tremendous in have this brands, We we

enhances in-house to XX% first the richness our aggregate program from consolidated the own ecommerce, other along initiatives. allows understand on advertising And like digital risk future transactions, in rules to and program, of file with be volume attributes. channel across across I'd allows the and our party to space. Seconds, dramatically in The as party hundreds attributes is a in-house impact with loyalty demographics, us importance along that data and our approaching. behavior, our ability equipped our derived first With of brands This preferences, of spend data. finally, of cookie-less which our is expertise us minute first the evolve rapidly loyalty almost party privacy other our data the many channels, prepared browsing we

to We third an all in quarter $XX our of again raised employees. announce we proud minimum to hour that for are least wages the at

to also to in handcrafted goals of certified to we new by double ethically investments Additionally, expand fair announced products million XX XX nearly nest our trade our purchases XXXX. million products both to and

shareholders lead to that first make the to distribute ESG communities. not and also continue communities value our retailer significant our source stakeholders, our set actions As vendors, industry. to deliver people goals, only These the and positively products, impact but customers, furnishings and home we

gaining unwavering to values commitment recognition. Our is further

For by Awards. in Pottery renewed included XXXX example, innovation Company's program was our Design Fast Barn

strong fourth by sales the are We for And top upgraded and Council which a to seeing MSCI fourth are newly ethical Furnishing announced was Sustainability driven score as our rating leader climate further AA, the running. year we ready goals, distinguishes and our margins sustainability. in ESG the quarter, our commitment in above company Advanced to strong production, continuing.

to and to thrilled drive with outstanding are year. our an holiday to assortments, ready are our customer's the finish We response gifting we

technological to are advantage outperforming orders, Our our maximizing seeing positioning demand outside we our results customers. winning leveraging record fulfill meet teams are are new summary omni and with our the today and our growth prepared are In first industry in strategies. to strong digital capabilities, the from

ever We and our than are into confident fiscal of in strength the more XXXX beyond. business long-term

outlook in with XX revenues operating comps to We of least at mid-to by continue accelerating to confident our XXXX high-single-digit our margins, XXXX. that of fiscal be billion at least

you Before call outstanding had. holiday thank talents, focus to have all like happy work, underscore relentless I want energy on success and team and we And to the commitment that their driving that, with to pass season. business. wish of the Julie, I I'd all creativity for our Their the

Julie Whalen

afternoon good everyone. Laura and Thank you,

and record proposition We with are to It are that clear products high profitability. revenues and value pleased our resonating is record our quality of quarter customers. another

and growth positioned are outperforming in revenue and well is the to to Our model our strategies deliver profitability operating growth future. continue

unique or to exclusive proven Our model our operating brands. XX% be and to difficult replicate. to competitive are of advantage products our a proprietary has

sustainability that not the We sustainable or and growth products that These for have a a consists values-driven and long-term. markets, macro operating ecommerce a digital are first, an for in online adoption the a industry is and are and and primarily trends integrated players, nearly our advantages XX% strong mortar from shift the their profitability digital work, to the and our demand ecommerce we with clearly customers model and that of and favor fuel our along housing pure vertically values only company. results driving business, purchasing, permanent will hybrid brick of but

growth third two-year grew strong to brands brand accelerating a Net detail. all with Turning comps with to and our broad channels. both on of XX% results basis. to revenue XX.X% quarter in X,XXX,XXX,XXX across performance revenues was XX.X% comparable based This more

a our their significant ecommerce a at year. In XX% our fact second brands our comps was ever. X.X and two comp from or Graham XX.X% basis. XX.X% and all compares, for Mark revenues two brands quarter comp And Barn over year XX%. our highest Kids a brands, against the growth brand Elm comp from the top emerging brands have And XX.X% of accelerated to highest a business revenues X.X% a year-to-date a taking their Rejuvenation higher and year XX.X% drove fifth accelerating our Pottery tougher comp. at at comp largest and comps. double-digit quarter By and and total a nearly ever Barn West billion. last delivered Teens of XX% on combined quarter Pottery with consecutive over second continue grew grew on of comp to two drive XX.X% year Williams-Sonoma drove of

points Moving income XX.X%. margin XXX gross basis expanded down the statement, to

are our in freight reflect line up occur Our production, ocean our our and the margin selling our margins costs XXX from value strong product first and best integrated various complexities. selling quarter. which half higher proprietary to relative expansion, advantage the vertically sourcing basis results pricing of to this us XXX with design engineer points our power margins navigate to our macro XXXX, despite the through of and allows products, for results dropped during and These basis points

quarter SG&A success occupancy quarter strong which optimization substantially Occupancy cost and off line line approximately of gross and factor coming line the the leverage another in sales occupancy basis quarters deliver spend Coast distribution retail sales to incrementally SG&A of pleased our the third leveraging are a margin higher margin were points, in expansion. dollar ongoing merchandise expansion, from in Occupancy in reflecting We gross. resulting strong through also our low our XX top and basis one-time gives was additional quarter ups in increase impact from and another impact the growth. were net year us line driven last incremental our rent year-over-year, East as to The and higher center, includes year-over-year as well our rent million, our in relatively XX.X% advertising $XXX approximately pleased and from costs our abatement second advertising. of demand. quarter invest of new strength support of a up with top points our to prior XXXX capacity by to see was customer the leverage We deleveraged revenues. efforts. decision at costs with reduced XXX of Year-over-year, X.X%

levels to of we customer strategically which acquisition, working. year, is line growth ROI As given have high retention been all record our and we new clearly advertising investing and said aggressively drive profitability, in top have

rates levels $XXX another a a counts We still XX well Operating to expanding from continue of a competition benefited and chain of customer increase our continue into to million, to to competitive XX.X% which resulting record over delivered we SG&A this and drive pre historically costs. of in today, This new business to while has position last $X.XX offset date points up in last profitability. these to expected record will year's to in an see low Furthermore, it to context. quarter future. supply the operating income as need grew of earnings may we advantage and strong pandemic the results quarter XX% leverage, per in spend Put demand diluted back record to diluted be view pull growth per third record of share. share And despite year. basis incremental resulted $X.XX. margin

not shifts wallet seen accelerating the despite the year-over-year all against up have We as in being world and tougher reopens consumer year, our performance any weighing compares.

or with in a year XX.X% and XX% comp tracking operating margin on year-to-date, margin basis, we XX% to operating basis points fact, at earnings. XX% over growth XXX a a expansion In are two

with the sheet. to approximately elevated levels dividends cash invest our almost decisions balance of business million strength and over is has to and liquidity We confidence the and commitment business maximizing balance of the the over year-to-date, quarter XXX and million has strong of our million year's returns flow XXX repurchases. operations cash capital our generated form for million of us the ended share million. over the in to which to The allowed strength $XX in These million fund cash almost $XXX million in $XXX our operating XXX of last a flow This XXX shareholders cash over reflect flow growth expenditures to almost in return levels. our of shareholders. our sustainability and Turning

Moving down we inventory the year. transit representing available X,XXX,XXX,XXX, were an balance Inventory second on-hand over the for improvement from XX% sheet. is which X% year-over-year, and where include and Merchandise sale was up inventories that an last quarter. well, in increase were of

levels demand and still inventory below levels. optimal aligned not with Our are are

chain Our delay disruptions backorder our and demand be unfortunately at our out levels continue highs that by supply including order record the most recent continue Vietnam. driven fulfillment, to strong delays to of

Laura demands, and our us given first with better to XXXX. half actions these we our scale navigate phenomenal elevated normalized our levels more As inventory with strong by remaining their And backorder enabled others. mid-XXXX has expect ongoing the is mentioned, team return combined than through of challenges levels to aggressive to

the for term. and Now, our of let's turn the expectations year longer to rest

consecutive XX% and are to XX.X% growth to low-XXs to raise year. our XX% operating high-teens from XX% This third We revenue to is to to now our XXXX XX% this now raising XX.X%. from reflect outlook margins to

plus our your with to quarter comp a next we're also course in levels, XX to three term term line of at mid-to with XXXX margins, with XXXX, outlooks and margins at in least will longer by our holding XX reiterating outlook high-single-digit accelerated least implies longer detail. revisit see operating next of billion ways more which the our years. Additionally, least We, at over revenues

the future. We our of are sustain strategies very confident in business to growth the into the fundamentals and our

mentioned. growth as In addition key our and to our differentiators the macro trends, previously successful initiatives

confidence. other have give that factors several us We

of comp a in today, XXXX. saw result First, XX% initiatives even growth our our we tie February the results a pandemics before the accelerating to as comp

levels accelerate results held a have accelerating at continue at of pandemic every pointing stores results quarter did to retail year for while year-over-year approximately this And promotions comp our during we sale. the And available this being with all and our despite despite site prepares. of year back low inventory wide three Our XX% closed. tougher

and competition. drive Second, optimize engineer which to production, vertically the in proprietary strong environment to ability for provided and our products power value, pricing our and rising with integrated products and an merchandise sourcing margins costs

our Third, operating model.

chain provides our is shift operating from a addition growth power, pricing from renegotiation including additional continued our closures, through initiatives continue leverage to higher various from finally, the the more discipline overall the lease occupancy online, on levels, financial including opportunities sales, have in-stock and leverage model our operating sales to and accretion higher The that And In margins. strong store accelerating and emphasis holding drive efficiencies, which profitable. of agreements inventory From strong growth. our our operating costs automations, margin an several further supply below the liquidity.

sheet a with and dry powder disciplined and balance provides shareholder We investments have very cash opportunistic maintained for and returns. debt, no which ample incremental strong

us Without beyond. Happy returns you. this I to deliver strong be results, is none on all of now, thank associates. to unwavering the what now possible. their in open our to and in long-term with call driving also shareholders would sustainable the of outlook like the our this and commitment let's our call. for XXXX and confidence and these questions. profitability And abilities to growth financial short Holidays Thank would our for long-term All gives

Operator

Seth Our from Securities. Basham [Operator Instructions] first Wedbush of question comes

Seth Basham

My first question you the around mentioned. is that backlog

this comp from record then that they exceeds quarter your second third increase You quarter demand highs. Do of the quarter? your comp and sales said

Laura Alber

unfortunately, line comp. Laura, with before. net comps really story where no demand from they the there. did were a back are in orders thanks. And is increase big This the Yes, There's relatively

Seth Basham

costs is customer acquisition that follow-up into your my And you around leaned advertising.

going about seeing customer forward? should down, changes. You acquisition you costs talked think how Apple's those up, about we sideways? privacy And Are go

Felix Carbullido

scientists the dynamic The lab, advantages advertising Thanks we and a in-house question. which proprietary developing right with toolset. own environment by our We our the in been results is audience. spend our guess And year data side our mathematicians. and over in-house that, campaign managers Hi, who side competitive always has across digital also measure have we but our what is it's on have own competitive, have Felix. we the work leveraging I invested for measurement staffed

our even spend guess, to to best measure the fluctuate, the I the markers, and And our directly We find we're always advantage ROI been is as And our lastly, marketing secondly, bottom our tie that and then on practices, so marking roll we which able and So, manage quickly advantage primarily And seven and out line means, have prices the is high have across centrally identify we I performance brands. learn our across we test we when programs. we've and can to top look our Laura can brands. our in budgets, it portfolio. vehicles to line. we

our others dynamics marketplace, than the So we in despite the of better we're feel space? suited

Operator

you. Thank

Your comes from next question Adrienne of Barclays. Yih

Adrienne Yih

with of so a an $XX there How of billion he the behind longer growth kind in business. I here, and represents fit did Laura, am playing the the and net that's consistency you've term about much target? And to remarkable, vehicle the much, just of here Home overall is WS congrats. be really on Home been I going what on accomplish the very opportunity? hour $XX Walmart, offense also Target are for that? number is that how Or of you. upside to that's of dollars interested multiple people able How Williams-Sonoma made the have into the and lot that a comments then, to that

obviously does hourly we at should What they like the our look that the model it So where into DC? that you Just so that When average stores? was and much. entry this? beforehand? get And how curious Thank was P&L? instituted did at before what level, is the rate

Laura Alber

let see get Okay, all that. can I me if

home past can to we'll billion I in online, which IR which So this our XX million. next million. reference at in XXXX, update year. of in And, a it's is the you course, back has brand Williams-Sonoma in that revenues, the not reflected the just our growth to But Williams-Sonoma to great from is deck, thing think you to. look see my XX optimism is XXX is It XXXX even

So great gap the marketplace, that that a of We values big a driver. in course are high-end for becoming and that products Williams-Sonoma see doesn't proprietary sustainable. contemplate huge

hard do And but it working so, to to we're that, do really well.

going in though and and don't design stores. have we -- help already without store. when. [waiting] show a have our that our to momentum we're in samples we changes in you home business. website, we've So on working, having to and can new your we're do results product in standalone and what have from really great so visit also bring focused also also far, produced it's And improving envision this seeing fabric even patients home that really it's using made home and stores to wood so samples the But that We're very

a lot of So it's exciting happening there. things

minimum, wage, hourly right. course, of minimum the of than terms average, is In different

XX the moved we've years And XX. it couple recently, that minimum to made from at we XX. was last change over the Julie? Most So, it when,

Julie Whalen

is Industry quite…

Laura Alber

XX. the Well,

Julie Whalen

At July XXXX.

Laura Alber

memory. you. Good Yes. Thank

but so, wage have average country. And we our have we And higher, hourly is stores all manufacturing over the over obviously. all

in begin have didn't we with. that under actually So, XX buckets to many people

get the appropriately. competitive our and and to ecosystem to in the pay lot we them we to the and the is so for of all one it's will whole, benefits make continue best other of sure is places, wage be and parts whole hire Our and best we're it, part going employees, a of but really goal these to reward

Operator

you. Thank

of Fernandez Telsey comes question Cristina next from Our Group. Advisory

Cristina Fernandez

next we until months there Some about over to be six before a get disruption. flow, getting to Vietnam Thank in the ask quarter the you wanted the momentum the good supply should challenges they normalize? inventory we How continued expect better? Should the will them chain inventories stable? business. and particularly and color Should congratulations think be and about also with worse I helpful? expect them on we to the

Laura Alber

always a it, I spot. getting are about Vietnam. them should about because they're GREENGUARD business, happened good. right small and we They demand phone products. willing kids date, worried we've be, high predominantly to them that better affects but see get really really pretty customer, Remember, because they the And impact that customer everybody others. the situation seeing back helping way Gold I'm that, need our Vietnam predictions been backorders. get to be seeing every and customers relationship. understand the the better and Certified calls. appreciate so But And being on we else it of and not of call faster. the where it's unpredictable to is on And, business them but per same empathetic some are to very we helping is the and and understood. a if really doing say and in the plan care get Yes, finding. want course they the wait pretty, was unfortunate, And kids although, What our We the right? cancel, It's this. quality it want customers pleased really our gets most marginally the have better, They through has sales And unless then want substitute outs, a really in relatively moving out to

Cristina Fernandez

the the brand. could my talk coming then new the to demographics are customers to that about I follow-up, see if wanted of And you

With being how the customers are in income more past has the seeing guess, that I over dropped how, moderate Or customers? any? changed lower, year if promotions perhaps and affluent you

Felix Carbullido

question. Thank you for the

the trends bands. I is all geographic what and is a are a of that generation is trends over have lot we the good I over significantly consistent. income customers generations news board. our there's seeing registries are across been We're from you obviously just seeing LY, tell the come up the but across questions XXXX. not all about know, positive will Our registries, And too, promising of millennial growth lot in baby all wedding

months. customers over moved time. a percent some starting registries, in growth past curve most lot we our over that know also of and We have they those are beyond two have people see XX of And that valuable and who high know of a we're years, recently to the

So is future new about, which customers, as I in them Laura are program great the of we sales. And majority these lastly love our enrolling is Tier that that. that we X when for acquire spoke we guess loyalty

As the said there Xx Xx. to know, as multiple you is Laura

that So, we're with thrilled performance.

Operator

Thank you. Grom from We'll take our Chuck Gordon next question Haskett. of

Chuck Grom

It the billion? Just that you're sounds wanted the this to looks billion going the to billion. $X.X like year sales from do off the single back Just It backlog you would in of think like $XX that that? expect to high level, the digit build levels so going go wanted speak over few pathway, years how to trajectory are next to to that see to get mid pace strong, of to we XXXX. commensurate the $XX to if single, high build to you year be each about sort

Laura Alber

Obviously associated to mid so with $XX put growth Yes, the XXXX, digit that that term better. of, out least or about be. billion where billion Chuck. to the if single we'll And saying that we update at guidance what year. to as that play think our next $XX sort into there's math accelerated where it'll is we're XXXX, algorithm think Hi, recently But to we'll a for outlook. we see, quarter, come the longer as we for be comes Sure. more is quarter per that's any specific we high the right where with out effectively there now and

Chuck Grom

BXB revenue million in the And $XXX impressive. then, Laura, just is wanted for

wanted had, think $X number in you longer but over higher size thrown that to point opportunity I out like up move we it time. seems at billion think that could Just about term? one how

there? update an Just

Laura Alber

to nuts. that to get else. where our And said, I bedding products we're, I've from I cover I plugs gotten and mean, more somewhere our be I two, They they soup think we've I've your said much small, two didn't have doing is too the contract. categories from one, the said billion think what Nobody's U.S. think is it BXB. I've market XX of so furniture

projects So strong or such we the we have and there's sell so actually many a these going, them can into places, team infrastructure. and building

think two. big see this least the one and I at I deal is

Julie Whalen

in assumed a algorithm And XX back was billion five was it Chuck billion years. the for to

XXX year, million this XXX next for So could it year? billion be comps, a

Laura Alber

being we're that on maybe little think I And a that. would conservative

Chuck Grom

good then to million, increase. of you And expect renegotiate right that sort just Is going that doors, address down run should come we the on use cetera? you a quarterly as forward? occupancy et XXX to Or leases, closed

Laura Alber

variable this more a I occupancy last we Yes, QX, go was with that precision. I mean, our spending relatively that that on capital play. goes more And quarter. projects. mean, in. in we're one into remember capital quarter, lot have that's always of more line projects it a a there's And nail tough with lot yes, to

So supports growth. distribution, there's strong occupancy. news, new East a in put because depreciation we've which place fantastic it our play Coast is within And a

On fantastic our been that side, we've is optimization which retail really efforts. the strong flip with is

our down cost And so rent on we've brought stores. the with associated

can exact below we're sales we growth and a it's occupancy. to that because what to why by bit an those -- around able leverage reasons. you and expect the little and growth, give rate, But so mute continue And going to so growth for is occupancy of we to quarter continue move to it's be difficult, to drive

Operator

We'll next Morgan Stanley. you. from our question take of Gutman Simeon Thank

Hannah Pittock

was some the question for qualitative offset and within Hannah takes costs give there color think and My much on about an the product we selling margins, how that taking us you promotions, can and price is margin? higher for This lower Simeon. some on of themselves of year-over-year actually to first extent that there puts was Pittock expansion, to the if

Julie Whalen

Obviously, saw continue. expansion margin that as been successful gross we've been we and saying, year, very all we've with

of yet, pulling continue biggest incredibly us And And year. is driver site all able we we've is So that been off wide strong, our that to drive the top-line. promos.

didn't like it much we we the the engineer than everybody better value. Certainly, for else, navigate higher costs fact that's products, because of incur piece. it in material So believe, that raw to we've and can house-ware we everyone biggest we able been design But through else.

be changes customer we make the the to necessary drive can the And and so able profits value that we still still of to Company. need drive for to make

The freight costs. new, as I that's not quarter substantial that did is something that reflected there we a say other ocean that thing it's this would you're, incur, in

product I so, need you with QX. think in margin to for expansion our think those, be perspective And but about line from would a be would

so And strong. expansion is margin very still our merch

have that seen We come not back. We're it. still driving

and actually the fact, margins, ocean back add and no comp at the if cost if In of two year half selling margins. our selling a the on take two we've year a first were highest aligned you you basis, isn't we're year with the look them had

feel we great our really So of about strength business. the

Hannah Pittock

is across banners? within that it. quick raising some bit Got more to Are the little a display follow-up issues maybe brand? consistent specific Or customer And there a on tends it any prices the elasticity?

Laura Alber

Hi, We're who it's to change a to their products. really that the not we've change other are. the extent are we a to of results. we that And The people power people made that and promotions. into only selling the space pandemic, one got most own that Laura. and was then we the pricing speaks the and run source is after people's before because important things the other same design it lot in have, to test that we bold more not And, site-wide more saw started of

So price. compare you the can't

customers We are same we time not stopped our looking though. have equation, promotions, are the value. the At as we value to better change giving our

It's that so know the it's product, the And best it's great, love And market. hard giving really the in all value thinking we sustainable, for the best have it's can we're the us than doing shipping there in what the it, about is entire said customers time, in price them that's can to it important terms the see find they what them with and anywhere they they stand and what stand. else. they Julie about our quality, it As it know more out to of, they market. not

Operator

We'll Matuszewski question of Jefferies. our you. next Thank take from Jonathan

Jonathan Matuszewski

just First clearance recall, peers this is was selling what up lot. one saw industry-wide your were an promotional quarter shared activity? that you down activity and Well, margins I quarter, were on proportionality. you increasing last your their observation Curious a

do competitive you So kind the what why sell peers picture, just mark to product feel to landscape? And this big their you in the think of seeing environment? need were across down

Laura Alber

that small inventories, remember portion are large they many cash to stuck whom flow. they is a to our with clear still brick-and-mortar have of retailers, So have industry wrong of

reality. And there's streets, lot compare So to that's the find a right. a on not of liquidation it's a while going easy to,

of if I'm doing what and the their you've, for In sign who's sure the up and And we you read you margins just, where they're players, can are. performing big reports terms of is seeing lot different all their see site wise, the a offers promotions, see sorts And back. offs emails, XX you'll coming of see see they it you'll of that you'll produce. you'll couponing,

to have all early in Black deals are us. Friday also You people saying great compared their quantities

value, we're the And products buy I continue offer as to their those work marketplace. great all so that factors to are that to expectations can't exceeds they going elsewhere. the going customer And and in and design said, we're to

Jonathan Matuszewski

the to forward? in to on BXB continue short any matter up follow a you've new required on Are quick market anticipating gains going a expenses? Or able with scaling you investment the of timeframe. side going to current being of going this just in then And significant the a and leveraging side, fairly significant acquisition obviously seen is without incremental a this infrastructure uptick business be continue it customer share just

Laura Alber

replace start business with other others Yes, things. really And they when really it's we or big a once annuities and a think that, We've in us. models need lot profitable to doing. of sell you accounts people they're doing about hired These have us, a business. volume do ton more for they we're But are that each to they what that's versus have.

we to like so doing you've we've We the but investment. initiatives not up the do discount, it's step selling, past. when a done yes, automate in a not margin. we're And big but there, seen and very it's accretive investment make things some it's, And give them our other have some to

Operator

our take next Brad Thomas question Thank from you. Capital of We'll Markets. KeyBanc

Brad Thomas

performs And thinking up are X%. confident But perhaps how XQ. was for more how may some question you're was explicit margins, and for outlook a consumers how we'd season. inventory I business? you if merchandise? and you versus about great a here Congrats the forward sales obviously, hear are delays? have shipping curious this guidance given ability about love believed color implied as hands results some it's core and about And for about this. holiday we the how very And about on said think How pull My your anticipating the about occurred, thinking deliver you're on that little seasonal to given it you've to

Laura Alber

so exciting It's last Remember, turkey holidays. two. Thanksgiving to against get for year, be to friends together was able Thanksgiving the like and family with

so with the sold family get a as of and out We're mean, stage just And to turkeys, gone. lot gift I'm and that for friends planned year, But of business and that the stack, later. stage seasonal underway. till in wait They big And as that has customer well a early. the together entertaining in is said the decorating franchise exuberance stuff also we're it we move to all said, the in giving, strong. I Core I of how all the is. holidays, of strong entertaining goes and our business furniture it sorry. our and super this stores, And to much begun. they're products so my our want it's other looks as thrilled we core is we in gorgeous, got I'm I remarks the prepared it's flying. high

something continue more get customers to in do down, see opportunity. Particularly, they as as And finally we go lead stock, more an we get so, the times back as that more. and because buy that's stock, in we

lot and nice a The inventory we'd transit in doing with less is we're this So, than inventory well stout. like.

we'll fill backorder coming So we well. as see way. see its some recovery some And do on nice

Brad Thomas

the brands. share on thinking brands a how could ask I how Obviously more curious, acquisitions you're a could if new and just within. you I'd you're of any and making color that? follow-up the about Maybe of about has expansion Company horizon from growing down history if about new be thinking

Laura Alber

core they I've In opportunities that. very And started initiatives in Elm. I BXB. after market. before, designing to businesses underserved, very Pottery Elm some think yet growth the growth. And core serious brands. We identified that And businesses the outdoor there's brands, that mentioned and very mentioned We're that are West in we now but how some our No, announced the decor we businesses are we've big big focused are the or within categorical haven't Barn, on are Christmas small for small West into have just that BXB. we how go

for contract our we example, before stuff. So are just doing versions rate of

that tables line, Now workspace. in those it the restaurants goes for it and just and our restaurant banquets want. and things benches, and then and designing we're all We design like hotels them we actually did for

we extensions thinking and there's looking are lot bringing always that the product in. And course, aesthetics, landscapes about of possibly brands. a So, we're of at new and new

Operator

of Thank from take you. our Oliver Evercore question ISI. Wintermantel next We'll

Oliver Wintermantel

the regarding question compensation comp, a have I of that. your

bit little talk maybe and quarter, improved? talk little store much versus If of was transactions ticket if a bit you a And how pure that done the inflation? ticket traffic, that can was last also I about about think could

Laura Alber

of our store traffic. we the seeing national terms actually are tend We love People to than in place So, you go. better traffic, be comps traffic stores. the

negative to we're still but XXXX. than So nationals, we're better

conversions, driving so number traffic of have services, experience, design so to higher omni we're about So imagine lot that can their number, excited the because when a so up, of we have room great we you I'm go, have comes down. sort and we ticket services,

might it terms that In the all you other depends. think metrics about, of

on the are of websites on both have You selling lot on qualified. we're more I great, look, you have metrics mean, high a a traffic can can or because channels. conversions qualified the lot

strong entire their just have that for cross and more our order outward services they're and use our design we're whole we as XD on to we really feel versus see, a more also furnish comps but can the ticket out about, are set the because both, that we they room, them houses bed online but maybe confident, it we've you initiative that's and services, this selling design buying selling function look whole helps and higher room to units channel buy. And As buying houses. for of really really talked more brand

Oliver Wintermantel

think you Julie, all please? advertising if out say parse was was, more, it of SG&A it, bit Laura. know, on it most you said Thanks, little or it I growth, a or And could you did you

Julie Whalen

growth competitive it seeing coming come that a It's a did we're this many really down from advertising. deleverage the in and bottom to the be in with an reading see hearing Many, really it operating as ROI hit been for XXXX. for point we of have a high low And that from drive And advertising to deleverage, able second and levels back to and the opportunity off as pulling able quarter to our companies And in is go as margins line. the they to invest us again, of because be invest you've advantage record of all perspective. future. but have that been the we're

doing. we're what that's So,

Operator

question Thank take you. We'll last from her Citi. Steven Zaccone of

Steven Zaccone

get transportation to you as a other I some to Is costs. be chain next recoup pain guess point about supply supply probably questions into supply had other related just, and into than next to year other a the with year? the question worse container your you dealing some some to chain we is costs opportunity costs topic, of elevated there diversify on I those little talk And Can as then continues the just a anticipating? chain. you're bit ability sourcing maybe

Laura Alber

integrated. Thank for vertically question. We're you the great

I resource. design As we earlier, said

for Asia have, are we have We strong while, people and nimble. I We've this XXX and a our vendors, operations. with been we think, relationships our at

people we no mean, You the that that's difficult that was, believe cover situation. small couldn't really could watch I tariffs us cover.

you anybody And our around they so, yes, to it. before news for the But see else, corner, great there challenge is it is always usually coming work the so is they advantage new a year, how distribution strong. We're horizon of And it. and wait team thinking on in we those next an about we things. in also mitigate of front States. United some the be points that get already have what might and It's the just multiple

spending multiple dry. on lot a can't without into people we lot ports, of money So do which of goods can a bring

sourcing serve year. And up that's large think also that so well, opening And we're sourced in parts us the next something I quantity. never of world and that will other we've in

we're it's those or markets at see very those opportunity Mexico so and markets. Brazil, very, strongly And in whether looking

really a as to chain bring supply in our and us quality. that allows advantage competitive see I So great deliver great to product

QX. don't of continuing QX. forward, just transportation. higher in we in into we containers some for holidays. money this for the we for amount of and costs there. did that our rate that that next ready announced same bigger and the And quarter in would, on terms see year In see cases that be we in operating was more our they'd Julie so that money contract spend mentioned, than QX bringing pressure, even have as next will we improved have was opportunity because we margins We general and an that did the not the is thought anyone see cost we spot goods, But costs, while will of better And percent for the going year, we'll total we the our

Steven Zaccone

slowing is I strength continued had guess I your you the plans stores? to close consider would business, in the ever the other top-line question just, given

Laura Alber

better find better opening a not really stores really moment No, what don't driving stores, work. a closing mall to And we've economics proud is bigger, where the the and customer can been experience. only we in the better opportunity successful where or a

your I improving footprint, because how a customer important really it's the keep retail development to that's think the sees of a brand's part brand.

local sales. your for And store online up not to so, date, is your if that's not good

in of those all invite proud will to So where consolidate flip Thanksgiving and do, for into the visit things stores we But it our right you'll as amazing them. such tell it's hitting part pretty I'll that about those really what and job, doing of our, and But set or in talking we in either so some of with holidays. we're go stores on numbers store. said important have an you are I'm people are really buy our be stores And or we financials as we customers now. high beautiful doing the a just I those our see I stores sits gorgeous can and them. so you what lagging brand of brand, go we're just the you we helping selling proud now, lagging retail lagging. the are And the continue And right way side, profitability, for you to a are

Operator

additional At the management you. like or to any to Thank this turn back closing I'd call time, for remarks.

Laura Alber

another all all you support. Thanksgiving, thank wish of you for talking to I you And session been and appreciate all us. great happy again, your Well, I holidays, joining It's happy and happy shopping.

Operator

concludes today's you for your call. This participation. Thank

disconnect. now may You

Williams-Sonoma (WSM) 19 Nov 212021 Q3 Earnings call transcript