WSM - Earnings call transcript Q4 2024

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Operator

Welcome to the Williams-Sonoma, Inc. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] 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 morning, and thank you for joining our fourth quarter earnings call.

including I'd will remind respect make events financial started, this that to get 'XX and we fiscal call, forward-looking performance, we like long-term you to during future and Before our for outlook. guidance statements with statements these estimates. best our reflect believe We

actual However, cannot and assurances differ significantly statements will that we may these from any materialize make results our expectations.

today's statements that to undertakes update or after these no may of circumstances or obligation publicly to company events The any reflect call. arise revise

Additionally, this comparable the should also X appears will should non-GAAP GAAP measures. the with morning. together we of to be refer financial considered GAAP our reconciliation considered These Exhibit certain be in earlier not filings in non-GAAP This replacements measures measure SEC. most with measures results. the with conjunction call press directly be to should A detailed our for to issued release and we read

Investor available of replay a Finally, our this will be on Relations call website.

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

Laura Alber

for you, you everyone, Good the call. morning, and thank Jeremy. Thank joining

to reflect Before shout-out The the dedication, accomplishments a we with Williams-Sonoma, entire at huge and to this I'd into Inc. QX and their today huge give share collaboration, about want to innovation of a acknowledge I team are you our we like thank on team get the results results, and you. everybody

exceeded an In QX, negative of X-year to finish a at we XX.X% share In X.X%, positive X.X% comp earnings strong our X-year expectations at came a negative per our with comp of quarter, and XXXX. profitability pleased operating are $X.XX. XX.X%. with in comp with We above margin at estimates the and

year. to the Turning full

earnings XX.X%. negative XX% X-year delivered year went comp comp XX% XX.X% at share hitting our positive operating our XXXX of annual a and negative negative XX% of to with margin guidance range X-year comp with beating an operating comp XX.X%. full at per of $XX.XX of a X.X% margin We X.X% to Our and down

these ago, and were and worth context. as lows. homes began pandemic spend in think time years our rates in we of worked us most changed to of amount results interest I an X lived it's unprecedented global historical putting the how

a X the surged. for As home demand result these of dynamics, furnishing

and was company its the demand Despite Our innovating ad and and supply employment increased product full experience higher capabilities management with chain focused price positioned a supply costs. on including to business of team. came running our tenured our well demand proprietary these meet and products, the with vendor expenses. this costs chain inefficiencies But the we compelling managing pandemic complications, stayed complexities, and costs of assortment,

pressure which line. on focus double pre-pandemic. improving compared on transforming supply us But inefficiencies, drove the year increased as sales As in home declined. in rates we Decreases in came profitability sales record out we our and again, interest started to XXXX, to slowing to nearly trend cutting operations, all our see demand furniture chain continued our costs to of stayed top our we and put

for Our XXXX in challenging exceptional a in by execution driven environment home results were operational strong furnishings.

today, Nonetheless, through the the and drive in and learned, growth. While entertainment hesitant and optimized they in we preparation have built resilient, consumers into home to navigated, they next furniture experiences of on From prepandemic suggested shifted all results. have away data our from that purchases. been have for were pandemic chapter we to continued

network in invested omni-channel a have capacity. developed We have platform and distribution additional strong with a

normalized strategy. interest home rate forward, company, sales see a another Going growth our our improved on and opportunity resulting from the we horizon for environment, more

margins. world-class year key First, our customer growth; priorities: three, X second, As on returning focused and to we driving we elevating look next beyond, to service; are and

driven strategies and be businesses, our in will global business. our emerging business our by growth brands our each BXB Our of program, core our

driving lower from These service continue and customer our and supply chain world-class reduced fewer improvements customer accommodations, returns We improvements in reduced XXXX improve and opportunity we margin damages out to replacements. will on meaningfully profitability and focus by multiple of shipments, continue continuing negotiations. full selling see to contribute beyond. to our And price cost will market and our by drive to

our other achieved organization As will we our last savings review we it structure. relates cost efficiencies, that cost comprehensive year employment maintain following our to of

sales to acquire returns drive Regarding our are spend, and seeing investment very help strategy. will our paid on This increase continue customers. and us our new we social marketing, effective marketing and both we on

to marketing expertise our us in-house proprietary and improve to ongoing Our investment experience. between continues technology differentiator our serve and in peers. Also, online continues a performance-driven e-commerce as our approach our

believe be We will see are this AI focused AI, in competitive dynamic advantage. opportunities customers offering to content accelerating and efforts. with We many inspiring and area our our projects yet these leadership we on assist tools is business in from design and another developments for

focused on e-commerce retail we and our As digital we our passionate remain as best-in-class business. about are capabilities,

be improve experiences inspirational profitable, the are believe have in products efforts next-level with continued and to locations. transformed teams design the our and best the in most retail continue our optimization We truly our inspiring fleet strategic industry. And positioned in-store services. I to our

home most And Dow in we XXXX Barron's front, the XXX sustainable the be are XXXX North one included of Sustainability started to named we being only Jones retailer by in America QX, sustainability companies. furnishings the proud On Index.

embedded furnishings. strategy, are in commitment sustainable to proud we is value of and a as our our recognition home Our in company leader

X-year a few a on negative in a comp and a and our furniture. pullback consumer Now ran a X.X% I'd spending comp like The basis negative from but due ran about positive to in XX.X% basis. X-year and sequentially negative on QX spend still X.X% brands. Barn minutes the ran talking improved Pottery to QX

reduce their period, response and holiday our strengthen over The the brand the brand customer shop allows a all decor, Pottery Black phone designs, their mobile of the full new entertaining room strong app. benefited Barn from and strength through expert convenience The to to and textiles. a of or QX we launch Monday season, During with margins. and Friday, merchandise saw the seasonal favorite design continue we Cyber share connect discounting tablet. in home design shopping experienced products a customers This and app

of We and will drive anticipate customer in the continued conversion this XXXX adoption Pottery app for Barn beyond.

fashion strength Customers updates we and As seeing continuing botanicals. with collections, exclusive in spring easy launch prints home and our furnishings we're gravitate product to towards are color, continued pattern. bedding,

on and QX X.X% The Pottery ran X-year in comp and a XX.X% positive X.X% a Barn basis. positive children negative on a was X-year business basis

on the evolving see and experience, focused are be to compelling comp. delivering we improvement continue the and innovation We in customer to pleased

sizable a Our baby to be business strong and very continued represents opportunity.

growth in easy-to-use curated delivering in-store been assortment, have app registry our and mobile baby experts. with We

of and with for [indiscernible], us range Easter her our also Day betting offering furniture, line we're strength just to collaborations, Also, Grinch-themed Kitty. in We've for and design teens. trend a is new We're strong response quality. strong baby dream that and a recliner swivel deluxe for such launched and proud a our return expanded quality that on with Hello we're in with nursery We Valentine's to response including seasonal Also our Christmas and first saw NFL whimsical dependent in also massage. collection making less that baby's offerings sales. customers to purchase teens. And as QX, finally, seeing introduced who in expanded to power with new of new from high keepsake innovation, debut saw our seeing are a strong home we particularly both consumer we an products is heat collaborations, our

X-year Moving QX, the West XX.X% pullback to been the and Elm has furniture. negative on basis. positive on In XX.X% X-year Elm West that West brand basis ran is a Elm. impacted in was XX% most by and a consumer the negative a

new what to year's and product I'm are our designs strong growth furniture, across fresh in from year excited this responded all However, customers The which has positively decorative sales to assortment, categories. last textiles holiday accessories. about

XXXX, also accelerate holiday move newness strong is well. sales performing in continues as decor. And We to and into saw we

Given these comp on X-year brand ran QX. into in X.X% continue products. it The new more a newness, West these Elm to opportunity as a we positive a positive see comp Williams-Sonoma in trends On for positive brand improved. in X.X% rebalances sizable inventory our was basis. the negative was a Kitchen and Williams-Sonoma meaningfully third quarter, and XX.X% X-year In a consecutive QX, positive basis, the ran the business business home Williams-Sonoma

in Retail events dramatically stocks. with inspiring and improved very has been strong, in-store

one collaborations we with seasonal acquisition. buzz Bridgerton, Tucci towards sales, gravitated customers and cookware partnership the categories GreenPan and continue and launch core entertaining home. Throughout and Cookware of and with to Stanley Netflix bakeware, grew like like the at watched businesses double a of customer our saw strength digits new most Our as gifting partnership shows, and quarter, in drive

care, update ended the a continued the hospitality senior X%, other entertainment like projects at fueled and business medical residential strong from as & the with venues furnishings the year living. year you our the XX% in exceeded total gaming country QX developing coming in Buster's. from back early X%, well to office Now Flagship bringing positive such initiatives. as year, just across the The I on expectations contract would in like $X strength range providers positive and segments Business-to-business of traction the providing half sectors to billion. health under positive at along with as on year Dave in by

hotel provided also the in furniture Vegas. guest Fontainebleau team that for room new opened BXB Our recently

about Now I'd global talk to like business. our

by performance In penetration season. to Mexico campaigns from market and and in-stocks our by pressures both retail. driven Canada business. strong brand high experience, and our India, to Crew marketing global continues the of with brands online across pleased seeing the The While to and are affect to are continues India, macroeconomic awareness build Canada. in commitment Design our strong momentum, a our improved a business, continue holiday with In fueled customer in the show we enhance growth Mexico, business strength we

we continue and the recent Our response Home and to brands. initial the gain Williams-Sonoma to Canada. the Canadian results positive digital pleased new customers and of with in Graham drive our Rejuvenation, launches for initiatives market Mark And are in

As Mexico our strategic growth key we remain the India, and around continue globe, markets. our Canada to expand presence omnichannel

positive remodel comp Lastly, you in like by a our on I'd categories driven success a delivered initiatives. growth our with double-digit emerging and product strong update new Rejuvenation quarter brands. to

quarter. Rejuvenation to the establish brand continue great can saw We're business -- strong about momentum and for by our destination projects the gifting timeless and strength billion-dollar BXB growth both in XXXX Mark the in brand. function, see single-digit and high-quality and positive a year as comp details. with home high providing products the beyond We excited continues to in Graham, a design consumer itself sales. our be next Rejuvenation this in single and growth believe potential with and high-quality

Our customers monogramming and it finally, high-quality And make gift for unique perfect a curated capabilities, the find to coupled brand's gift. gifts startup with our GreenRow. online shops easy

We we We our to remain manufacturing products. continue demonstrate brands GreenRow create which develop momentum the aesthetic. in are successful that with brand, emerging businesses utilizes product gain it's optimistic brand increases substantial about assortment. XXXX, in of planning our in address white new this grow new ability portfolio These space and practices this colorful and to sustainable to expand materials and market. exciting potential In quality and heirloom to the

massive market In in year. We in XXXX accomplishments this results unrest. several our summary, of proud and housing the and despite extremely outperformed decades financial slowest geopolitical we're

Although we best-in-class our customer on chain trend, selling, service. line and this supply efficiencies pressured price stayed focused full top

We margin. guidance margin our operating above well delivered and operating ahead and pre-pandemic model, as result, an we have business our well transformed a for

of stage It serving growth. we optimistic us and We reads have platform the portfolio a but is have are next strong the opportunities for built aesthetics and stages, infrastructure, brands and well of our which is early, ahead. a life a about on QX powerful categories, exist we and omnichannel range strong, positions of that

the Jeff our numbers over through outlook in it to and more turn I'll walk to you that, detail. With

Jeff Howie

good you, everyone. and Laura, Thank morning,

line. a deliver expectations. exceeding delivered significantly 'XX strong and challenging 'XX As for to earnings with fiscal pressuring furnishings, Laura year full backdrop home year said, earnings despite finish to pleased top we're QX our a these We

profitability strong environment this our operating the margin. demonstrates Our of durability in

XXXX. Our results communicated the in once consistently themes again reinforced we

integrity price run commitment not site-wide steadfast our to promotions. First, maintain and

inventory levels. tailwinds our half. third, to costs Second, became And our pressures in cost half control the supply manage first discipline second and chain

Given the confident back this deliver the challenging strength for of furnishings, even our stronger earnings home. growth period can long-term we're we to earnings through and customer home as shifts

year fiscal our net $X.XX with billion. our Now start I'll for results, full let's dive followed QX finished by results, then numbers. 'XX. 'XX into guidance QX the revenues at provide

of high holiday in customer came expenditures. driven our ticket our expectations, towards of performance portfolio hesitancy revenues partially at across by offset ongoing brands, the by big strong end Our

maintain we quarter, overall we continued and the During level our of our reduced promotions. price commitment to integrity

Our and at and XXXX our X.X%, negative period, in bookended ] comps Black at full with holiday on plus XX.X%. negative QX From our strong comps [ X.X% by Friday comp perspective, at came ends. a cadence comp to a Christmas inconsistent both X-year reflect to year choppy sales our

tailwinds Moving our over as higher more at been impact higher costs. income QX full selling last last improved offset statement. we've the for selling margin quarters. were supply down of XXX the chain to than than occupancy margin points QX XXX reflecting margins year, impact several gross profitability XX% points year basis of the to XX.X% guiding the basis higher

driven drove We're if which and shipping, performing off. experience lower costs selling from half margins, efficiencies, the supply input not came Our are in supply deliveries by efficiencies. supply margins, higher focus The accommodations, full contributed on and price execution selling focus damages an see replacements directly driven merchandise higher margins QX order, chain proud better. our and and selling. margins and balance per at to out-of-market were investment lower our merchandise returns, paying improvement levels, including chain on increase sheet pre-pandemic lower from multiple QX improved chain both costs. by about all in costs, metrics, Key customer

than of QX more X.X% X% year. selling points offset basis higher margins $XXX from revenues, occupancy to up growth million net costs QX the or XX in Our last

now to Turning SG&A.

revenues, XX.X% $XXX expense of basis at Our QX points. SG&A XXX of XX% million, ran grew deleveraging and

our reminder, in that not benefited a results would QX we QX 'XX. guided As 'XX repeat from SG&A favorable items

year basis from higher than last decreased driven favorable SG&A year-over-year, QX points higher compensation fiscal employment 'XX the X%. XXX performance-based last items incentive year. our by Excluding dollars year, was in

In QX, took to as levels year-over-year into variable higher was trends. in we of costs advertising employment continued line XX spend. top with to points invest opportunities expense accordance QX advertising manage of basis higher we advantage

increase very on we this spend returns are as Laura our As mentioned, continue we effective investment. seeing to

efficient is opportunities platform our the spend. advantage ability Our of organization. agile, example capabilities, and marketing multi-brand to continue our invest to data these in an of in-house performance-driven drive competitive advertising first-party

favorable as the insurance increase drove in fiscal expenses general the QX balance of settlement received we lapped 'XX. year a

QX XX.X%, earnings $XXX earnings operating basis and our $X.XX. exceeded significantly QX line, bottom QX came of with income year, per the On XX above expectations. in million at operating diluted share at last margin points

Turning which revenues now net at Full $X.XX year results, again to year expectations. our billion. exceeded full finished

term. revenues furnishings full integrity price short even Our and it revenues our if in the to backdrop for a reflect maintain home larger year some growing meant commitment

basis Our tailwinds headwinds to last XXXX at $XXX Full year chain full even a as year X.X% highest XX offset half turned full negative XXX ever margins these our XX.X% down X% back by selling our to half. our X-year XX.X%, gross nearly improvement point last driven year our costs of at margin year margin comp increase million. equal ended first comp year basis into higher ran X-year points merchandise comp supply and at and mix occupancy rate stronger in with selling than XX.X%. selling margins the Full year in more margins our over plus the at supply X.X%, were chain higher efficiency, a over and

point in by in management year. a SG&A with our in decrease variable year reduction expense and the XX on billion. QX basis employment line line was decreased This taken employment full advertising trends of $X.XX reductions and top X.X% driven Full to QX,

the deleverage 'XX points driven QX Full year discussed primarily that SG&A recognized basis earlier. I by XXX was of lapping items favorable in

at of finished per On diluted operating at the and pre-COVID billion, we $XX.XX. XX.X%, share margin above bottom floor operating line, year the full ended Full income at XX% established our earnings significantly year start margin operating year. and levels the the $X.XX at

and outstanding. our On after merchandise we to last down $X.XX year. XX.X% long-term repurchases maintain levels, levels $XXX At in dividends. was ended proactively positioned we shareholders price stood in returned quarterly over invested we managed line integrity share no supporting of we the billion capital billion, inventories expenditures This our these $XXX inventory through debt growth, cash our we with a million are $X.XX to at with the with and line sheet, our year balance to Year-end well balance as trends. million top our

inventory XXXX our by discipline. free of a generated strength cash management earnings, and We billion, driven $X.XX at proactive level flow in financial the of record

financial example return the XX%. 'XX year fiscal our of invested of capital is best This Speaking on in retail the a industry. discipline, prime among is

expectations. Summing up we're have our to substantially 'XX exceeding proud delivered earnings results,

As at Laura thank I'd of a delivering our And the environment. team outstanding results said, talented efforts reflect these in the entire Williams-Sonoma these Inc. team results challenging like for to

'XX Now to our let's outlook. turn

XX-week First, is that Inc. year for Williams-Sonoma let point out a me XXXX

So the fourth weeks. of XX quarter will consist

report We compares versus will comps other a XX-week comparable be year-over-year XX-week XX basis. weeks versus All will XX on weeks.

could the XXXX margins, a is spending timing home, are growth will points will guidance. anticipate XXX anticipate revenue spur of market We points Lower back and and We to be continued consumer basis year macroeconomic additional but embedded to hard week in to basis uncertainty. which the predict. of operating to our both contribute interest housing XX rates shift

comps XX.X% with revenues and With be in up of 'XX. range up And net operating X.X% providing election the of also we to this for to down down mind, XX.X%. and are X.X% and margins is 'XX to X% between between geopolitical X% in range the global guidance tension. expected there are wide a

year. across line, On anticipate we the sequential top the improvement

line as top first second the get the comparisons easier. half, half than tougher our With

On supply 'XX, will In back expect margins the half tailwinds first the bottom half, continue we by line will least advertising offset higher with through but our results. line, will chain 'XX at spend. our partially operating anticipate of be be the in we

long-term investing plans funding 'XX allocation business and for in growth. prioritize capital operations Our our

drive We expect dedicated our to of capital will leadership to spend and invest efficiency. $XXX this long-term capital million chain e-commerce spend of the growth to business. be XX% in expenditures supply in our

to We repurchases. the return shareholders and cash continue of form expect to quarterly increased dividend ongoing in to payouts our share excess

an announced XXth year payout per we are For proud consecutive to dividends, which the will to. be committed 'XX share. we quarterly $X.XX dividend both of in our XX% $X.XX dividend today, year increase or remain Fiscal of of increased and payouts,

our share replacing today, returns authorization, and new repurchases, return our deliver will For opportunistically which billion Combined, shareholders. Board our we announced authorization to to a previous has under increase dividend repurchase cash share new $X our to also our authorizations stock and shareholders. our repurchase share to approved excess commitment we repurchase continue

$X.X we've fact, In our returned years. billion last the over shareholders X over to

look we revenue of now sustain operating to the mid into believe reiterating line margins we mid- future are can we single-digit in As teens. further growth. high we to high guidance long term, our the beyond long-term And 'XX, top in the

We are will and peers for these our outperform to confident continue that shareholder reasons. growth we deliver

our furnishings and our share the in-house to industry, fortress gain competitive the the our resiliency ability digital initiatives strength strength ongoing sheet. advantage fragmented digital-only of Our of strategy, design, channel market our not proprietary the balance growth of in but home first of the

With open call for questions. the I'll that,

Operator

the come Zaccone will line of question Steven first from with Our Citi. Instructions] [Operator

Steven Zaccone

Congrats here tough on environment. in execution the margin a strong

guide the for more assumptions more the you in about in detail. XXXX question a margin first Can Jeff, talk bit So you.

on the you half. operating particular? that the in How the the margin year? about commentary gross margin does in cadence gave of about back Can look You talk

Jeff Howie

guide We it margin line bottom provide us margin our individual why outlook the business margin. did the Steve. we along the in don't our can and know, guidance. the as know to as you different and in results. reason guidance outlook, 'XX, strength pull you've EBIT Yes, line we We And pull the line levers seen, top items. evolve deliver continued trends we margin to flexibility levers see gross on way. the we react see and operating as in as operating the to gives our And we

our on been into additional but half some XX.X% operating -- offset supply of We delivering And expenditures front guided looking the as will half about, and we XX.X% do we've we back to these did tailwinds to results. that overall, see 'XX year. as seeing in we be today, QX landing it 'XX. But see chain between the in very the we're of by will talked in that of forward continue the we margin advertising 'XX confident

Steven Zaccone

question turnaround. second Then to Laura. was the you, Great. on detail Okay. for Elm West hoping I more get

we how talked the some that's about And well. underperform? and You would to for the you guidance performance brand company, relative Elm of doing still to about the overall But you think newness, that turnaround the to expect long expect do if West take?

Laura Alber

Yes. I'm growth and to in all And see that's exciting clear, so coming year for excited again about product West think the this Elm. I've it's very of a their us. I story had a chance strategies.

acquisition it's is core. out, I results, and timing, new customer offer engagement very in repeat new the the exactly hard UPTs building we've brought that's new go. and we seeing, really important the terms customer will predict strong of But decor when for product as relevant our to And language think back but are holiday are modern also in things said, seasonal which just purchases. we nonfurniture not and I forms, new design that drives the business, always and

So that way. is on its

be items, year. to also You're the is furniture furniture that on longer continue these fashion lot the of relevant then on that know have going you're a than if person. time some apparel bestseller now to success we when will a line that And we see a grow through

our over although big then versus just is a not confidence last high can -- newness, very total. it's with we the year, So it enough percent buy now into of

then meaningful to in that's hit top when line into and back compound through buy expect winners So see the way. the a as we year, these we total they

Operator

the line from Basham comes of question Seth with Securities. Wedbush next Your

Seth Basham

been still at question Obviously, your see bit revenue target? of to environment be operating margin But below just a the first would another costs. if able strong My very that. lot come on were quarter. Congrats reflects with the have thinking revenue about guidance XXXX guys a hit guidance, uncertainty growth is XX.X% you And outlook. and we good managing to in you that your

Jeff Howie

Yes.

So simply our I to to if to can answer revenues doing, a the think we're There's case. little little come beginning. your we're were results throughout bit focused pull even we do closer earnings bit end of business the we're to think margin in question, and additional can there's is that within things the lower, home confident we rather levers positive. operating a to guidance. the outlook to were we the our be we're if more on our We But And that in what down continue have to furnishings opportunities that delivering improve more cycle in business. than year. drive And that really the

Seth Basham

been And helpful. it there's a a how change bit little of approaching seems That's advertising. then you're like secondly, in

finding opportunities line the there. way color play to good pull You're expect? doesn't if is there? of that the more also, Can you some this top you give And you invest out levers can one

Laura Alber

It's opportunity, when we more. difference not we see It's a in that approach. invest more

going we're invest in we to back. paid want if advertising get so to And

it if methodology And works, we looking try it. something where this week, a brand. every can every So And one if have roll we doesn't in work, brand, are so and every it lucky test-and-learn day, shut down. it at we're to

be than stays It's to seeing in little organic line. a tandem had so And it done And of more, this because spend it we social more so the not that lot lower something up now. works, then catalog when on opportunity find used bottom giving in. when you that or different there's we cost We've is sales just invest the goes years. many we're And in for complicated to more ad a the things paid. you with

but with way whole but very good our brands. a our social new not own organic to social, media get paid into pushing world through to social content Now we're along have the really it effective in channels, helps just getting go our customers at into

cost in just did a incredible not for the in in also that both the it's so really brand. the we short-term collaboration sales new with ad like Stanley creative that Tucci, content that's bringing be of spend but a And continues building customers to example, it's spend, wonderful successful goes to the which working example

And so it's that of years a they're XX when use. example kind not were the great really to different and are available of channels things those from changing, ago

Operator

Your next with Jefferies. the question Matuszewski line of Jonathan from comes

Jonathan Matuszewski

results. Nice

one is on first The BXB.

thinking in damages, update make on terms Just my the if That's profitable? consumer in about anything maybe curious in first or relatedly, how your side you're costs BXB that out more make business you're BXB to and of accommodations but of to of And like doing seems things less to context the what you comp? channel just of more doing XXXX sales a lot the on take of question. guide good terms you're could us curious, It profitable.

Jeff Howie

in Jonathan, about points embedded our XXX basis comp which we 'XX, guidance. is our to in see BXB contributing

Here's while 'XX. in BXB that recent impacted some look X% overall we've about as what's we trend. the We're housing improvement in 'XX business with by been The growth the slowed really up more contract forward to seen has market, optimistic up exciting. trade XX%. was business And

accretive story. And really TAM. of our contract remain However, operating slightly growth a it's is billion margins. focused BXB we our $XX for to we're pleased here growth And on just we're business, and momentum really as the this piece see accelerating continued seeing. we us, Overall, with our disrupt we

Jonathan Matuszewski

fleet. helpful. store quick That's just then really on And a your follow-up

mindset the us Obviously, lot in embedded a guide? regarding Just the update What's of on for renewal. leases XXXX up closures. maybe store

Laura Alber

Yes.

placement. great and in is to really leaving areas retail Annapolis. which strategy A centers. very know there, really we're to don't retail certain I a example because So than certain moved is right Whole story exciting our you've if stores your next moving stores Foods different in WS our we traditional successfully been vibrant but

really good a the average. the it's to is and great to where up customers. -- work store, really the it's store X-wall for strong It's the pro we killer less and and It's than previous the landlord are a higher ] really build And financials is [ the up store to much of forma. our to and we're really paying case

amazing so do things. leases as And renewal, successful are staying we for come to and we've in the reinvesting we're up what in that's continue been right in, there centers

fresh to and center, So the to new the years that ago, built also they allocation. fund, space new the staying in we be when way want if stores XX served, look stores businesses than and serve things really in customer there's you're the

plays, and matching and these intuitive you're the And by so to these looking inspired our features, what's also inspiring excited continue we're we how the at store to rooms, keeping with build got salespeople that where we've and help houses. also across be to we're what's brands, there working, you. And but great who go you're experience that not you of help and beautiful we helpful and optimize, tech in all music very working and do say constantly

that they're changing. and also use we buy design take our market really less in and And this just with dying game And just an reinvest think services next while time I'm talking that -- advanced is when the stores the to be design that buying there in we're about the we are online platform our because can to this, I service we've taken I leverage where how to for going time level we furniture, to new during houses. people really switches, know

Operator

Cowen. from of Your TD the line next Max Rakhlenko question comes with

Maksim Rakhlenko

Great.

are any the So return to that brands on quarters? lead more brands first, strong. are provide you just about just the XQ coming seeing reads thinking that And are what Laura, then will over in? you color What how comment can growth your back you

Laura Alber

Max. Sure, We have really opportunities really our we're portfolio our do lineup and strong in confident of brands, of a in outlook.

the in working Easter actually. color phase, print that strong. things of That's and a examples brands pattern and color and good. Some seeing across we're trend early. It's -- is are we're sell

but expect differently ends so careful little me to telling is far with and you when sometimes so Jeff even it comment it's So because be early, shifted. a good this than

that is customers strong, people that That tells this way, too, quality show seasonal the Easter they and and of in And West be love we Elm, decorate not that's our There's think brands. -- how there decor holidays. Christmas a lot for We saw you to for a really serve them. been gone good a out business to -- across entertain we they're do And people wonderful. haven't after.

effects of Easy that's but on people, not sales. room. house, buying really updates, might our them. decide can upside one see So may redo that be to we And they the they for a

high-quality and products also, I provide in are prepared those attention kitchen help projects unique more we who someone rejuvenation. as getting and And my the and remodels about remarks can happening, Bath spaces. mentioned still are in

and in I we're And Elm, results furniture, as collaboration. then mentioned, seeing strong that's West new New exciting. forms, very

-- collaborations. So they it's keep that Sheila LoveShackFancy, Colin language in, [ Tucci, may have and a of we them. with us I range bring They time we've And a just whether help Bridges, ]. Elf design think Tucci, they're I we design new not King, these great customers into. naturally wide about new mean, got talking about

continued that that And And then great customers. all and for teams the for really of categories back. good a as bigger and total pulling percent of we're there's pushing is the

information, on of have pockets or And where some much we're seeing upside. so we giving without too going a competitive long too lot away

realize other our that's that important reduce is this offering. The got thing in continue all to you we that really guys to promotional

for we're time on back So thing, growth that pushing to tricky promotions, are year, last a determined same this right? also is posture absolutely this the pull to we it did which at So year. continue we

the push X strongly take continue so they this markdown, will take the business. term, work our long out. balance year and that a want thing we try to not new up markdowns, pricing do and sometimes but to will believe you this We have things, we down our always to don't brands. going in and really us is it see right And You're for we

Maksim Rakhlenko

very Got it. That's helpful.

is the EBIT new so And long-term update, big margin think, I the outlook.

now more the raise post see And as going to confidence that to margin opportunities be to you just XXXX, where ahead we continue gives forward. Just what you SG&A? it? on march or curious think is are big I'm gross So curious, to seeing then you that about

Jeff Howie

a a we then XX.X% And way margin. floor. think the to about XX.X%. operating guiding think results, the we established this margin at I And is year-end delivered we're it XX.X% XX% 'XX, start we of operating year,

confident remain to we of So long we over start durability in our especially mid- growth single-digit the as operating margin to our term. algorithm see high growth

we that. to the certainly these And that think get sustain beyond 'XX, So we're operating as we upside have margins longer. pretty we in confident

margin But remain can in the those the of 'XX don't term. versus of especially you -- line, and we we've beyond the don't over as we in term know, that. results, particular these deliver as well items, pieces long as both confident long for terms guide line SG&A, the the we that bottom established we In on

Operator

of Your Benedict question next with line from will Peter Baird. come the

Peter Benedict

supply one is chain kind of on first So the just environment.

events about some control. maybe your have obviously great job the I'm on costs of on been freight. the things of guys doing a the out what are You on, curious control, ocean of going can you some that

remind kind how That's here be 'XX? baked there, of you first you us where of question. sit for the into that Just may my outlook maybe some

Laura Alber

Sure.

and to team, they supply team, is Our say, that just I'd chain results. phenomenal, the show through our continue

take returns that pandemic, in for drive and issue areas delivery. out delivery. we to perfect the Although have want things of to have result a want that friction normalized any to from the a We will which all upside. We want still improvement, down replacements customer. We and continue the affects lot of margin

those across my we're on so And script. in board, I all metrics the numbers mentioned incredible seeing

they're pretty real, comes problem Red disruption a the is When terrible. Sea along,

more it However, money. not costing is any us

delivery, about us or our costing mentioned And to is XX padded I take. it time, so deliveries far, them. can't people and with late. they're outperform happier connect faster, events. always -- if than anything these don't deliver if world Because we -- most didn't don't it, days we the it's we as we they And So of they about last give customers disappoint heard once

have manage these once the really to so That's recent And most we quotes very our delivery hear example. quickly we things.

is There they proactive I And about could that better deal thinking doubt if we be everyone. that to -- be ahead mind, things than it -- We of Peter, there any things what be this make will with. when to my affect it And those is very to sure solve about with guess no that other ahead. have in these things met happen, good to tend news year the able and get most. we're is we're usually

Peter Benedict

of guess lower I was XX the real process on here going to estate, next kind that Is couple now, XX the stores while year-over-year. question optimization true. around very then kind Just curious XXXX, occupancy maybe that going you it? way I'm is forward? just that the expecting growth Jeff? how the another assumed be maybe Is where should for cost understand year, No, we a Yes. of And my of been cadence that's think from to mid-single-digit to standpoint. about guess, I trying for sit maybe And years increases,

Jeff Howie

the innings. mean in where journey are in I retail probably Yes. in of we we're our middle of terms optimization,

about have in in discussed the XX% leases X of years. come due past, the -- I've As we our next

just number net a but years. the to few about through the the continue works to higher where store closures, process we've way tend target we So past real estate. And usually, to the they been to look in of out optimize we

you years where individual don't guidepost. in good to lines. So bottom And of then a the can go the the in particular line. really of go, terms occupancy top to we guide and and I'll past, say, We look is going numbers, back X guide is X or to terms

So that costs there's And gives a lot year. costs, us there the too. also fixed pull of to throughout variable occupancy, are within more levers now

can necessary. the So if year there's things throughout do we go --

guidance. all it's So embedded year within our full

Operator

Christopher the JPMorgan. of question with next comes from line Horvers Your

Christopher Horvers

optimism as question business. talk improvement the the the what side I my guess you and furniture I seeing bottom the of about was you're curious about just market So is, the the first on of quarter-to-date,

You in lot driving newness it does Elm mentioned sound the are the categories been some a like but West decor strength. of what's resonating

On the back Williams-Sonoma quarter. the the brands away from furniture first shift other does the into towards mix hand,

much first Maybe implied you system the of is how sort ocean some sequential from improvement quarter? does demand trends? the seeing So normalizing. it like deflation furniture of the of better through in working freight the Are

comment helpful. there any So be would really

Jeff Howie

Yes, Chris.

just on there's So Laura's were QX. turnover before, see the Sonoma we the impacts the trends by in Easter, we're penetration QX. it's over but furniture yes, performance. shift, sometimes company. we're thing the But improved a comments But sequentially to with Laura Easter QX the quarter-to-date important higher mentioned, at I curves. And do which in of but very a benefit not down, furniture think pleased early. our has is And as overall,

our only have of furniture. assortment We about in half

really in that of wide shopping we the today. the trends the powerful we So as a and where have assortment, to range with we of what customers portfolio And a outlook to brands they're service and confidence really consumer can product we can our gives meet us shopping. see

Christopher Horvers

not year more For a from done flexing line, like being terms on managing modeling reductions Should that guiding and the you But perspective it and demand Jeff, help us in dollar really you've think about -- had with into a around think we not the incredible to see should on should sure. like of rate ago. follow-up, SG&A job, you then well an it you I individual you're recovery are some it incentives And and maybe know advertising, could the line less you about leverage, rates. as a growth headcount think focus we variable about items.

business the top of you reinvest is there SG&A how color to start any in into the recovery back as as improves. So terms a line variable just into

Laura Alber

to this all things. remember we think to wanted growth, service elevating I It's Yes, comment, just do important it's year and delivering that X Chris. driving focus can Laura. we believe It's is threefold. margin. our I And customer

brands our world-class in the investments really opportunities those to to we we things. many will that our year, that with believe with make natural the look line. need achieve the have drive We platform, that top to I our as model --

imagine down cycle, And line a But up so said we what an line. your line of I you right, like last line, what we're I as -- by by in produced in to margin even answering looks with not the I about improvements. that you've extent cycle. call, our seen And know the in those think can questions

a investment. where us to ready without to for step-up have have over Our making we volume investments last the infrastructure that a we've place XX been years, are gotten more having

ready through, and about also year talk really while those potatoes we drive not these they the for excited and they're but a compared customer that only things, costs opportunities have customer how So flows or the service to love others costs lines others that distribution about to improve we this small because lines margin. come service place. these next and put platform to re-platform -- We're volume that to in real

Operator

of Your Kate McShane comes Goldman with next line from question the Sachs.

Katharine McShane

where Question see wondered in more on update in XXXX. were on I you last pricing. and get quarter. I adding could about We that wondered talked to QX price average just price know opening you you trended if an last an versus we on year. points expect what how

Laura Alber

of sales piece then It's interesting, to change. Kate. they and every We try glean from information

The seeing don't value. We're a wants fair I right a price across think the point all specific price So customer magic it's that's point. to prices. success that say there's now

really that's points that And really then expensive have selling. some stuff some have value we price we really are So selling.

not now. And pattern so there's that I'd strategy there hang a a on for

to value really all the new of and great on In our fresh worked we've brands, designs. consumer also

is. take cannot lot the it's design, that it's we price, it is of other advantage get not than generally on When a that and our so quality right product you making price we important cheaper a better. underestimate the And is how it same people our

I on and that were or it's soft prices we focused customer before prove -- to I high this strong. the and -- we're low is can't prices, are -- we're mid that's So about value delivering that call, what talking prices the

It's new the fresh product. they and the it's stuff want,

Katharine McShane

there I is a how ] be noticed with there you through And be, where the could I to just wanted managing scenario profile tariffs? guidance, for a that But a follow-up were if are [ about risk to election. to ask question tariffs thinking more regards your

Jeff Howie

conversation trail really first, year. knows in lot's the get in this the campaign we're A said goes where Kate. on Well, and election an who end.

are subject XX% Today, it half our back was since Second, we've X then. base of thing. the most here what the which years important sourcing the ago. last only time transformed of about sourced from was of is mind top is goods China, our And

advantages some competitive serve that key have well into these We real us situations.

best-in-class First, XX% operation. made exclusively our our own brands. and in-house sourcing designed proprietary, are products for operate global our And of we then

largest with on container overseas and offices, shipping, and our it's XXth XX the So sourcing own production boots importer managing decisions, we're ground, the the United into States.

scale relationships. So we have and not. do Others

to being, we do punchline respond the the ability landscape have changes, that if not. So others

Operator

I'll closing now hand the any call back to remarks. Laura Alber for

Laura Alber

We in New joining to appreciate really thank all us. year. some for you seeing look talking your of York support Well, you and you forward the and to throughout

Operator

Thank joining. all That for will you today's conclude call.

now may disconnect. You

Williams-Sonoma (WSM) 13 Mar 242024 Q4 Earnings call transcript