US firm Williams-Sonoma Q3 FY2021 gross margin spikes to 43.7%

The third quarter GAAP and non-GAAP gross margin of the company reached 43.7 per cent, expanding 370bps while the GAAP operating margin reached 16.1 per cent with non-GAAP operating margin of 16.3 per cent, leveraging approximately 60bps over last year.

The company has achieved comparable brand revenue growth of 16.9 per cent, including West Elm at 22.5 per cent, Pottery Barn at 15.9 per cent, Pottery Barn Kids and Teen at 16.9 per cent, and Williams Sonoma accelerating to 7.6 per cent on top of a 30.4 per cent last year.

“We are extremely proud to deliver yet another quarter of outperformance with comps (comparable company analysis) of 16.9 per cent, building to an accelerated two-year stack of 41.3 per cent, and operating margin expansion of 60 basis points. These results are a function of both (i) the advantages of our distinctive positioning in the market and (ii) our successful execution against our long-term growth strategies. Furthermore, our performance demonstrates that we can continue to take share in a fractured market, and deliver high-quality, sustainable earnings. As a result, we are raising our full-year outlook to reflect revenue growth of 22 per cent to 23 per cent and operating margins of 16.9 per cent to 17.1 per cent,” Laura Alber, president and chief executive officer of the company, said in a press release.

“As we enter the fourth quarter, we are seeing strong sales and margins continuing. We are thrilled with our customers’ response to our holiday and gifting assortments, and we are ready to drive an outstanding finish to the year. With our strong results to date, our winning positioning in the industry, and our outperforming growth strategies, we are more confident than ever in the long-term strength of our business,” Alber added.

The company has maintained a strong liquidity position with $657 million in cash and over $788 million in operating cash flow, enabling it to repurchase an additional $201 million in shares in the third quarter and over $650 million year-to-date and to pay over $135 million in dividends.

Given the strength of the business and performance delivered in the quarter, the company has raised the fiscal year 2021 outlook from 22 per cent to 23 per cent net revenue growth and non-GAAP operating margin between 16.9 per cent to 17.1 per cent.

Fibre2Fashion News Desk (DD)