Williams-Sonoma (WSM) 22 May 242025 Q1 Earnings call transcript

Welcome to the Williams-Sonoma, Inc.

First Quarter Fiscal 2024 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.

Good morning, and thank you for joining our first quarter earnings call.

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

statements However, any to from reflect materialize The our today's to and we company assurances of publicly results that actual undertakes after will make statements any obligation update expectations. revise or may these cannot no circumstances arise or these differ events significantly may call.

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

the be remarks. available will refer filings of out-of-period on Also, GAAP adjustment quarter an our disclosures be first will for details adjustment Jeff recorded Relations his with SEC. the that of this understanding And results, quarter. first we prepared the with share results. we in this conjunction in of replay to providing This call this later quarterly also during should our call of our to without benefit is considered these believe both financial with finally, the our and the We will useful website. year, a Investor

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

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

strong consistent a for without results, thank their collaboration I we teams of dedication. to could to company. to and cross-functional Before moment We their our around produce continue all the not our want to earnings our QX take globe contributions review

profitability In results an and QX, improving and strength in first XXXX, top in profitability. to margin We quarter negative our continued of operating in of expectations X.X%, with came share strong the above of trend we an line are XX.X% $X.XX. at pleased estimates exceeded our per deliver comps driven by earnings and

It the million, to in freight-related results we to it this required, the of a of accruals more that from determined our $XX profitability basis resulting and benefit is without Jeff benefit, operating exceeded include which significantly noting even to important through this of reversal margin were that points EPS. walk $X.XX detail, will is expectations. that but you first XXX impact note worth contributed the of we the not our quarter

we to now As of outlook or a impact outperformance, range of result our on operating XX% are of the in accrual XX.X%, when XX.X% excluding to the to raising the freight XX% our reversal. be margin

on returning are results margin. start key XXXX: our in growth; focus of for customer priorities first strong elevating the to our to returning result The and our driving I'll growth. with world-class a quarter X service;

line QX. We with market our are in in our the gains share top trends pleased and improvement

vertically in innovation integrated high-quality We line organizations us our design this and sourcing our price in-house And focused brands. compelling are design product unique keenly allows capabilities innovation offer points. to across on at

of capabilities. is marketing Another key return-to-growth component our our strategy

and new marketing a invested by first-party world-class increased and paid in serves social company. customer marketing collection customers to our proven the data for our we backed digital allowed investment to gain and in-house drive ad analytics both quarter, sales as acquire strategy. our and This our our Our optimization share. to our market improvement advantage us In competitive spend

best-in-class to how and technology. concept the our constantly e-commerce is to Additionally, about our improve and final personalization selection From product care we improve online customer continuing mile, in are our our to thinking through to our to team e-commerce experience. investment discovery experience we proprietary can

as our we way service competitive about to this best-in-class we advantage. we are business. and believe forget our is do it's digital And be passionate retail that capabilities, on will in as important AI. not another through one leadership And focused our AI are We our

inspirational our We in-store next improved in-stock improved level in-store products, have experience inventory and with levels services.

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and inextricably are Moving XXXX, third to which our in second key intertwined. priorities

We of world-class driving their is our customer performance. our operating do, customer and and margins. make service center is at progress satisfaction key everything continue improving to The to we the

bring more that home, We and are to direct in pleased our with has know we training improve. with both see opportunity and our in-store tools a associates impact but providing high our We Scores, on Net Promoter our new strategic experience. store this back an QX to store in we of And for is are in conference all offsite training. manager year. meeting our annual managers participate This thrilled opportunity multi-day to of customer

improvement comes efficiencies. service The chain in customer from also supply

and of returns And lower and the replacements. and our of promotional to fewer improvements and shipments, meaningfully also out in beyond. profitability continue market contribute reducing and customer are XXXX margins. ongoing reduction not commitment by to These promotions We multiple site-wide limiting damages to will offerings our our reduce have improved costs accommodations, running

customers, which We price maximizes turn, full value focused delivering to on our in are equation compelling our selling. our

comp update brands. negative XX.X% you to in Pottery like performance on our the Barn of ran QX. a I'd Now

continue furniture and in and print improvement. Highlights textiles drive softness continue proprietary updates see pattern sales. and our in to ticket quarter-over-quarter sales seen Pottery Barn, but success our shop, decorating in easy having across higher include newness We in frames to We're decor. we've Bloom

our to continues also celebrations customers. seasonal in resonate with strength Our

March, year, Deepika of compelling innovation, In sets billion with brand. embrace also back our X the with introduce for we're they icon, Customers Padukone. in-store positively with ever online impressions In our this international digital the collaboration Pottery drove first popularity and Lookbook, launch Barn engaged global launched Her Coastal we floor our excited newly improved developed experience. to shopping apps. new with half both new of and the

these introductions with X.X% Across drove collaborations comp QX. ran to The We've improvement we widespread being product children's new a seen response comp life-stage the customer in highlight. a particular trend excellent our in businesses, business. positive Pottery Barn business

partners Our by recent relevant have into customers and tapping and such decor launches sales driven fashion Pulitzer LoveShackFancy as trends. Lilly and home attracted with new

and twin innovative customer our and we're registry seeing essentials our to dorm, response to solutions. launched date Baby, and double-digit collection excellent wall growth XL biggest recently no-nails expanded In gifting. new with In expanded decor bedding storage options, we

one are we In near to the can product assortment, functionality. dorm ship their any roll college to our company-owned And also addition expanded selection stores to improved out of campus. products dorm customers excited

drove In trend, line we improvement negative running pull quarter. see in its on in Elm We're promotions. trend the West sequential as materially to X.X% Elm. in Moving Elm's to West even top demand improvement a QX, comp back West encouraged

furniture, We strong in year, strength of performance last out product accessories. with to and are our sales new with seeing comp particularly spring decorative positive our driving kids units

is great Summer off comps. start triple-digit a newness also and to with double newness

trends positive sizable newness, into Elm have more West the in we rebalances inventory as a opportunity these it Given in products. new

brand fourth ran running brand the QX. positive Williams-Sonoma Williams-Sonoma quarter a the positive is consecutive Kitchen second with a the for positive consecutive business This The in the ran comp comp Williams-Sonoma comp quarter. a X.X%

food. from we introductions continues products. exclusive to these We During The Williams-Sonoma Williams-Sonoma categories customer innovative the benefited opportunity branded the have QX, of items inspired branded to we and favorable new reinforce customers cutlery in like products to with response and business. bakeware,

our media co-branded March, and collaborations drove attention results. In

collaboration include Lauder popular to both with for Our expanded and Aerin was Williams-Sonoma items new Williams-Sonoma Home.

built of official Trisha make restaurant best-selling drink with our new her the with Brooks. cocktail collaboration our partnered that Garth also foot she bar and Nashville husband, to Yearwood XX,XXX square We in

of the encouraged on trade quarter. up contract saw represents momentum business, about for Now I'd to record-breaking from by on diverse running sofas dorms Business-to-business in Pebble of San corporate our other like in UT business We're ranging our driving grew Diego a X/X Company. in quarter, our the book update with positive our which initiatives. QX, in improvement gifting demand for BXB you business, along continued Beach the We X% to businesses XX% XX%.

existing our customers as We project large Jamestown Marriott, such also Dave growth properties. Buster's & saw continued and for

I'd brand the retail and both omnichannel strategy, markets, across the awareness from direct-to-consumer performance global expansion with and impacting program India, in Now campaigns the market. Canada, see our to and driven In to Mexico. about brands. pressures thriving talk is pleased our business macroeconomic key of business-to-business Canada channels, in we're increased across enhanced continuing the selection global marketing strong the product by and growth all brands our like In wider India, business. are ongoing Despite including we in our business,

and improved market in by And the stock assortment focus design a driven expanded strength business on Mexico, fueled by our the position. showed

experience in new leverage these to continue markets enhance emerging to the customer from markets. knowledge We gained will global and the our

quarter. with both Rejuvenation Lastly, your double-digit you categories and success saw We on high-quality on all and support home products I'd growth delivered emerging like projects. drive update delivering see and brand to remodel continue The that brands. to another refresh remains customers. focused trade consumer

and new specifically The continue categories see strength of we several their kitchen touches bath with Customers while in update from the hardware to and growth and window the bath, organization, finishing lighting, and also comes strongest homes, textiles, performance our in like hardware spaces add outdoor. Rejuvenation.

the and this this beyond. excited potential are brand by and year We growth the momentum in

brand, brand strong assortment Day are a is QX. double-digit gift increasingly its as selections. And newest and our Graham, designed destination our last. in the also inspirational to to and and lifestyle sourced QX a as gifts, continues positive Mark recognized vintage-inspired finally, colorful brand Day Father's weddings. experiencing continued reception GreenRow, grow furnishings to graduations started has and that and growth business, drove expand with sustainably of Mother's brand's including an monogram go-to a for gifting comp The growth

second month and print The pattern. a this with catalog focus dropped on

a market expansions brands new partnerships forward successful assortment in portfolio businesses offerings additional Being very to in emerging that response and coming exciting white in and in market. our seeing ability are develop positive to to the the its and our address months. demonstrate unique seeing the space expand We look

extremely our In summary, proud we results. of are

all growth. optimized for we, preparation few last chapter the navigated, and company, have in next During our of years, as a learned, built

a have environment network the there omnichannel uncertainty and with and continued an strong a with platform the sophisticated capacity. distribution offering lifestyle We is additional consumer. recognize We exclusive that with

servicing driving our our But a committed to customer we We driving to fragmented margins. highly because growth; X and customers. returning remain inspiring continue XXXX: world-class in to three, one, by and market, key two, our gain in service; priorities will share we elevating operate

turn you numbers more will in walk I over that, to outlook with to and And our detail. Jeff it through the

Laura, everyone. morning, and good you, Thank

line QX line. bottom continue we are pleased top We deliver results. to improvement sequential on to these We've in the expectations seen and trend strong our exceed

results our year fiscal keys quarter reflect said, 'XX. for X Laura out As this laid we've

business-to-business opportunities, both to brand First, growth, returning emerging fueled service, world-class our we our driving third, profitability. and second, which to and global customer drives finally, strong by expense footprint; expansion retention earnings strategies, continue brand elevating and savings; deliver as

And home. These resonate earnings results, we long-term themes our can across our back as earnings shifts the to today. given we're growth customer strong confident X and stronger even deliver QX

into start dive billion, the and in on QX provide Net $X.XX guidance at then let's expectations. I'll for finished Now line numbers. update an our with revenues results 'XX. our with

X.X% From were of Our last our a We promotions negative saw our quarter. trends the overall year. as improved we even comp categories both performance and consistent better perspective, level sequentially furniture across of across reduced cadence nonfurniture relatively quarter-over-quarter. from

an XXX statement. our XX.X%, basis accrued years Moving expense or came we million. in over that adjustment. down Gross XXXX Subsequent XXXX, out-of-period which margin by the to from filing identified XX-K, million XXXX we freight and at fiscal $XX a across includes point benefit income $XX

gross to not the prior rules, accounting material we an in results any projected year the accrual expectations. at our basis benefited results. last this over in and higher full material points prescribed adjustment, Without than adjustment quarter. as the year determined out-of-period and we XX.X%, recorded that XXX the 'XX period was Following QX came out-of-period exceeding Therefore, to correction our substantially not margin

to drivers the X XXX improvement. point were basis There

and pandemic-related year's improved benefited driven points, by XXX freight we margins runoff ocean merchandise selling. our from full-price as lapping ongoing First, lower to commitment ocean last basis freight

change XXX savings. efficiencies lower yielding by supply Second, service in points, These contributed basis are and damages, multiple improvement efficiencies supply per replacements, out-of-market customer pre-pandemic cost notable shipping chain than returns, driven a and accommodations, deliveries order.

from deleveraged although And third, XX points. last costs, X% basis year, down occupancy

gross margin, we We world-class stack Wrapping supply merchandise substantially lower optimize while quarter, higher and driven technology continue in retail and fleet, chain. occupancy by margins, our our delivered our better supply margin this our to chain costs. up efficiencies invest we gross

to last year, drive revenues of efficient levels Advertising continue advertising of as basis SG&A. points basis points higher into Turning an and XX.X% by higher spend higher at SG&A compensation. deleveraged came spend, driven return. we in now incentive or to expense than sales at invest XXX XXX expense advertising to

test incremental the of Our multi-brand to portfolio this return allows us spend.

our Our learnings competitive in own go hands-on-keyboard industry. in-house approach and gives further, investment us advantage our furnishings allows keeps the a to home

points XXX QX, employment trends. on basis distribution higher performance-based incentive our incentive was In expense customer variable costs was flat across we accordance year-over-year, higher compensation, entirely Employment manage to stores, driven in with compensation. employment basis. a top rate care centers continue year-over-year centers and Without line by

$XX by expectations. points; was On the earnings million; basis XX.X%; $XXX.X the out-of-period income $X.XX. the Including million; bottom per out-of-period from increased operating diluted operating exceeded adjustment, margin came share was The adjustment line, $X.XX. in by XXX per by our earnings benefit and operating significantly earnings share margin and income operating at

out-of-period in at diluted above income last $X.XX, expectations. million; share margin earnings our basis the XX% per XX.X%, significantly Without still operating $X.XX XXX came earnings or Operating year-over-year. year; was $XXX.X was adjustment, exceeded points and up

to ended expenditures supporting no to our outstanding. to debt the inventories shareholders $XXX the This a balance was long-term million support growth, quarter down at returned cash sheet, capital the On billion, share million Merchandise with last our invested balance repurchases. ended we are and XX% our billion quarter quarterly $XX and through $X.X positioned $X.X well in our of with Overall, after business. we year. dividends we inventories

at another results. to We're our to quarter outstanding have these team Inc. expectations. thank our results. earnings of exceeding substantially delivered proud dedicated like QX for I'd Williams-Sonoma, up delivering talented Summing

Now let's our 'XX turn outlook. to

operating fiscal year guidance Given are our our our margin QX reiterating results, guidance raising we 'XX. for revenue and

to tougher growth with top the second easier to be line, drivers X% our net to in the X.X%. our down On half as improvement full the across comps to sequential with continue X.X% first the get top We 'XX X%, between range half we year, accelerate. anticipate up of revenues comparisons expect up year line down the and than

the On be 'XX our our but are based going in operating bottom with anticipate guidance results. line, line relatively forward QX upon our margins we raising will results,

to our in be margin of out-of-period margin of guidance XX%, a operating includes year a benefit point XX.X%, year our raising of due XX adjustment. Without basis operating are the We to adjustment, the XX.X% points which we raise out-of-period from XX to full range our of XX% expect full impact range strong basis a will the the to QX results.

our full Additionally, and income $XX to year we expect interest tax our be approximately rate year effective approximately full be to million XX.X%.

As a a Williams-Sonoma, Inc. is for XX-week reminder, year XXXX

basis in quarter to which fourth contribute embedded anticipate and margins, of consist We will the growth XX both of additional basis XX the will to are points So XXX points our weeks. guidance. week operating revenue

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

capital Our plans 'XX unchanged. for remain allocation

in and our drive business. in of long-term excess invest capital shareholders to e-commerce to to efficiency. to supply committed payouts expenditures growth dividend the remain spend be We capital our spend XX% will returning this form share to ongoing quarterly in repurchases. the dedicated cash our of and leadership million We increased expect chain $XXX of

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

our returns million we billion opportunistically stock we share to to repurchase through remaining share For will our under our repurchases, have $X deliver authorization which shareholders. $XXX repurchase

with strategy; not market of fortress peers we operating our We're and gain mid- to fragmented teens. further in-house design; in deliver digital-first guidance high competitive long-term the high ability of of look to our growth in advantage our digital-only home consistent: strength initiatives; X revenue but our future the furnishings sheet. of of our margins channel remain continue strength balance to beyond the our share resiliency proprietary these outperform the single-digit growth the that reiterating ongoing for confident the As our mid- to 'XX, the are industry; we we'll growth into shareholder and reasons

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

question [Operator line Kate McShane Instructions] first from Sachs. comes the of Your Goldman with

picture one the that was stated and accounting bigger question regards one have question to kind I then of with today.

the if QX. in bit talk we little you ticket that saw what you seeing know performance you terms were more about trends I in in So down first, maybe of build wondered more could what big on little to furniture. we're a you're in a But seeing. versus QX noted better you curious bit

it's the regards 'XX with to and to then impact COGS regards not QX accounting, 'XX wondering we're an there's why change, to with only through why 'XX. And the

Kate, it's Laura.

of of In big furniture big ticket, the QX a terms year. is not time

Of business, those in are of lot ticket, of newness comps other aren't have in seen has of softness, But trend course, seeing in high the and more we you comparable. to a high products high trend to remember, appears in -- bring in of we always don't ticket better. We be seen things QX. ticket a furniture. But lot in have improvements we one a that haven't types are furniture we've have a been furniture electrics of that our softness we high

categories both a really home and collections in make selling that also in growth. kids our we new furniture of a out have and performance some better summer season they on business where furniture we're products the finishes, difference naturally business, seeing Barn then huge also, wonderful have of children's in to lot furnishings introduced which these new the Elm. Pottery in West have that We spring and are And

more versus dorm then those also stage life housing are related. and example, For And Baby.

more firmness seeing we're So there.

second take the the right, question on I'll All accounting. Kate,

not why asked 'XX it's you and through only So 'XX. 'XX

out-of-period international the drove some on supply pressures the everyone, already imprecise that faced renegotiations, hit swings, pressure through these changes a supply was for in balance 'XX to what and expense. process remind put We complexity the layer contract added adjustment to 'XX. chains. happened really disruption, by terms material renegotiations, pandemic, think tremendous context, which we freight really delays, all just vendors, cost during use the pandemic estimate of the And chain to volatility years I

just and impacted cancel our up So it we have was reconciled would really would approval, QX. in not as cleaned it sheet itself QX because out it 'XX, our balance pandemic-driven and

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

question the outdoor reads portion So what tough category. early a second holiday are is, that's Sonoma on weather. looks quarter the versus Obviously, the the your it shining on my was Easter and bigger pretty like April of first around really

some you expect into category like the business, think mix in of sequential as the an to of the you shift that will have Kate's would So to improvement question, quarter? And sort outdoor second related about effect.

mix the weather the the lower of sort Williams-Sonoma does of to So the fact XQ is maybe shift that in second offset quarter?

our when like it's And get than you're consistent sales, furniture it's is the the pandemic happened, an more the of okay? outdoor The curve, same. furniture. it's when about to early gets get the home before to the category referring It's the categories, Chris, the curve was with not -- outdoor pandemic immediately it consistent to if the rush after -- Laura. furniture -- performance of

it's is a it's our have guidance. handle and normalized up, going pretty end we Now and on think embedded in a this where curve, really more we to good

out lot I I talk weather. there in industry not impact. about just the impact really of know of that add, been a the would also there's We're Chris, seeing that

way. us the we doesn't predominantly I are same online, think impact because the weather

as between see a alluded impact So shift to. as on we don't that an quarters, you

year you don't seem the quarters, half half but in the guided And historical but guide it imply margin. half operating year. much Got guide the don't on higher -- the where it. of first margin back you based the that a imply quarter, get year. the to I that by it would then don't is would you on just of know than you typically, uptick period back the by And

the you, along large side. first part, beat margin quarter just on It seems like in the passed

the is the unique anything quarter in year guidance? then a And perhaps that that there assessment you sustainable? fair of not was So approach is how first

Chris. Yes,

a I things really you there that, head nail some think against last comes we're QX, unique hit it in the were in from up what down to year basis. and on compare the

QX lapping we're benefited our stronger the point in of even that supply last year the which remember in quickly of had headwinds. we're benefits that we was QX, QX QX, starting year, really chain those QX high Let's last and most and 'XX in from benefit. headwinds, that in QX end us coming the more to and And

to full on about the lot we Additionally, benefit we price And while our in of supply last the feel it's we early let's year. and lap from also year uncertainty. efficiencies. chain focus started saw selling results, our There's remember, a great

guiding year-over-year we're full essentially margins why through that's year operating be QX to So flat our QX.

from Your Fernández Cristina the next line with comes of question Telsey Group. Advisory

Congratulations results. question good big also demand. picture I on to around the ask wanted a

trade out BXB call You in X%. up

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to our for be you not you're for billboards able things. are stores home go the And wait minute now, to things Our when expecting in, in brands. you take go

and in are there's stores our made those so again. newness And sure things that improve And we're we've higher excitement results. to stocked some the seeing our drive enough really them that of we've

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by about continue we BXB very is housing. what's to going be affected So less and it with on confident

then full as the the called about of are year to you as year? guide. through confidence some a move talk the accelerating your year, initiatives we growth impactful given And out Can you through follow-up, hit the initiatives which more

Sure.

more the customers. year. own our of -- building on website, we brands are West our be proprietary new have and are and We on and excited the I about and back in the aesthetic reads terms with in Elm our working giving high-quality. And now growth of this a West products that is Elm, design first collaborations the team one, being confident to in focus. part also the what our half we're big in seeing more high-quality we amazing, West back newness Elm stock modern our the think I just to have year that is own could of where not And and what's going, we getting return

know note other of their and to repeat is business. that a excitement, people furniture dinner things to it's looks a want predominantly party you have The purchases pillows. or we health change that that just for buy part big with way the very think new to room West for the important been to living I Elm And is, can update

buy, so for that focused home. percent And to the for on new acquisition. And going been to push that I things is are to we've that, total easier smalls, to we're very updates continue the say which easy customer when good

of half. So West is the in growth key strategy Elm part back a our

new new Of course, I been example we you've well. if the seeing with I'm and go Netflix's which is our in very but of gorgeous another us a to to website, really with And excited launches. the our able Williams-Sonoma Shondaland exclusive navy to market. know, extremely is we're our what most Jura don't Bridgerton, collection, have as about is doing on right you show collaborations is watched Netflix. impactful which Bridgerton And collaboration now know

So have on hit that head. to the nail we're excited

are in kids big and seeing and the comp have course, a part so and then of store those. that collaborations businesses, building teen growth, good. on carve-out And Baby Our of And Pottery Barn, we in dorm, floor we're fall then, do and more of really and of we're season. some nice holidays. what and fall for own the building the entertaining. we anybody Not in And sets for collection selling, high-quality where course, way on beautiful very does that we I referenced earlier, holiday, for decorating as a else new

entertain Really our our serving momentum, nice then, the So comp touched aesthetically, different those very brands. the I in decorate. different way to we've growth of those on. future. brands, a those brands and and growth in double-digit are seen for big are course, emerging really And And pushing

Your line UBS. the of Michael Lasser next question from with comes

Michael. on for is Dan Silverstein This

we sorry, -- yes, yes. yes, I'm

we got This Sorry, crossed. Lasser. our Michael is lines

into initiatives is, or look would if flow did in back the that you would the bottom to you you demand-driving quarter, question to the that reinvest you outperform first to it Our magnitude let by continue line?

more it key drives We're spending that. And is or just always where investing money. versus in demand-driving really incremental very initiatives. aggressive sales the trading about sales We're

we the as That's look industry-leading us So we're very And our places investments. costs. the do thing. in invest, biggest ROIC. was obvious ad you disciplined we you have in saw why at That's how

in mentioned In for that chain people up supply it's because the doesn't of investments, we of our are -- it -- put long. is is built had more volume it our we've kind than big And so other require for doing terms to we've been have. they step e-commerce investment -- platform proprietary

big have in a total already. e-commerce percent We such of

a new thing to something customer for we us. experience. that So incremental to build it's not adds the that It's are just helpful can

you vernacular but investment sustainable in it to Promos other something that when drive say are way the and that people not -- it's take So ad take is that is opinion. the anymore. one do demand-driving incremental markdowns, costs. that short is demand our in our in is not We term,

in much same where of a Very full-price dollar you the where how or today brands investing selling prior advertising the on was percentage the amount? sales helpful. year, as follow-ups pandemic? quantify you does percentage will to be Two that. versus different stand Can this that across either And

We're your question. Yes. over fighting

And where what results. not the others from bids So we're knew. and It's true lot and because reading streams today lucky sophisticated and in at demand going costs, so is at I the the dynamic cost month. we it's of to team ad a a that's different it's not is and have ad looking so the where this about true terms amazing so wish in might be

seeing others. roll one returns. we So and we investments we're put our a we every test in brand monthly long to brand and And We have it meeting out review where down full-day where every stream.

put in you want, context, cost? the ad can this Jeff more on if

Yes.

as just the to us important changes to line results. to operating also levers you deliver the it's seen, to flexibility And because think in it pull bottom everyone's business. line I top as know, the guide respond and we remember, revenues know margin gives to we

see how through to adjust year, a year our very develop deliver go while our for the who knows it's shapes shareholders. So uncertain we we'll out, as the but levers we results the can trends environment,

want -- in of you selling to... did full me terms price then And

Yes, for Yes. yes, sure.

you. it's over haven't we That year. significant last a is given, number Thank but

line Citi. Your Steven of the from next question comes with Zaccone

Laura, I improved seen a appears wanted question. to better. data to you've the furniture the macro softness ask and We've mentioned space. some getting be points furnishing in

home. your with of ticket assessment wins So some replacement we're the purchasing Curious glimpses concept I'm like curious see smaller cycles on of think the replacement easy of starting this in industry people and to Do items. like for your and cycle of assessment. spending on you

idea. no I have

interest than change, going rates a That's more going have. to go the I they're just to if they going they're to one are down, that But theory believes everyone theory. that think wait. they're never to I be going believe buy that's likely to

that's priced You like we more that's innovative good prove that when where could mine. anything. What makes have your me going I when we're housing can't now, macro. the be that right winning. it because control to feel produced than in what is imagine happen, like But we're we as exciting products but QX know And see of right, is in the with like environment. whim it that's as soft mean, these guess results Imagine turns. the to I at

following strength. there Okay. from we Jeff, gross Maybe here? opportunity you. Fair for year. that question, Is a higher talk enough. for multiyear little had On margin, from of a relative selling a Could up here? up Michael's to about lot on opportunity you've still is question bit to the full-price go last

up specific supply opportunity margin gross to the from guide guidance lap before, more I the we efficiencies margin, as said don't for starting in full-price last year-over-year. is essentially higher be chain benefit balance and Well, as flat year we our selling. to headwinds so operating we against the I you talked much particularly had from overall year lines are to is coming about. potentially There of But the and know,

have there's drive if mentioned, the in back as opportunity gross margin efficient to a and we investment. our more business that top to there's line from pull, levers returns that higher, we was to if Laura reinvest see chance then the And

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

continued a follow-up is My last the Congrats one. question results. on strong on

into you've all you last quarters. your that couple and in little of a the thinking U.S.? give over key supply you initiatives further margin the more bit there benefits Can chain Just us gotten about improve supply insight the to chain the have the outbound drivers

Yes, absolutely.

last the inbound increases you dramatically chain high of did detention still order, our year, have Our a focus cases, time. customer go. a longer records, supply is there's room of no some in damage-free, the goal is from lot incurring hit on to things costs. team. that although And as improved have, And know, we lot perfect and, freight demurrage. of We service really those We're in pandemic

right the room in DC. the we that inventory throughout and still to are the that sure go really the of to continue team is we and more to our of And to return going further rate, is beyond. getting optimize terms In buys by that make honestly, again, year less out-of-market not root-causing digging do inventory focused multiple that, on replacement and us low as incur have a service, place helps and shipments. we very incident single happening into that's every there's And

ways And to are what that or at individual or way. and of for cost honestly, things that finding our an in figuring whether ship and we use orders redundancies want for there want do to automated we looking customer speed AI, optimize out with to better we're

making we've made -- supply chain. we're in So investments

we back that DC. closer tell our at know West should customers. running. year it's us we advantage You and half to hit in when to up you and that give season pleased an opened I'm peak And the this that our Arizona our Coast time

So have, those of absorbed we previous some in costs. quarters

to receive deliver incredibly this ship truthfully, well. a always a and as I've it's And driver for and a floor a lot ship efficiently. frustrating and not can because not we and who and It's of margin lot well is it's who very market huge people damage-free, furniture And not good do. goods do also furniture whole experience for service. only said, time the customer difficult well. person to people do will on very order And can us, apparel of win There's your it the it it

with So hit still is, do order. progress, our lot perfect to there's truth a but more I'm that thrilled to

And year-over-year year is my underlying color. associated we helpful headwind accrual incentive the on guidance? how margin part really based the And the should follow-up for it quarter. your that That's the on results? is about for think of of out-of-period question Was compensation just incentive or balance this then with compensation adjustment the

Seth. question, Great

embedded compensation simply so benefit our budget, the results from not any did incentive in beat was we compensation include take QX incentive versus the our in So additional And had from up the guidance. essentially accrual. any are out-of-period to our adjustment. It

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

the Congrats results. nice on

on you to ability in could how remain promotional can peers first, as your lost improves, Williams-Sonoma's even demand make market speak strategy level the of So tougher? it will that regaining upswing? confidence when own share to share do some market that And of if regain impact your

fractured it's moved not No, about owns have there's already. that be online much. the I'm very And But And who we Max, scale for to such know, much in hard a stores, that confident this the hasn't still share really to done going as thing that amount retail versus is is you anybody people online. market. very very mom-and-pops that's like

is that I competitive won't as look that moat we to And that know that such a number future. be to so the it key the in have future, coming online we transacted low that it's big When the is happens, us. because

less other worry some things up. bring I about So people of that these

can highest like value you in price power. trying do because that is pricing set only nuts each product competitive have. also or that end things, bestsellers in brands, I our that some know so new the there's no format, has us to one done is we the it's a is that soups overprice we in not huge in And the and the it own look And And fantastic. we're to at the really advantage like of their our lifestyle It's sharp from markets. of which designing other designer gives fact, nothing who's

So you with things in close to competition, without cannot tell are find competitive anywhere similar will market on a bestsellers our the our everybody really I through call, the you that working, that the going product including prices. our

think pricing our the they getting I the consumer They -- also shop about know is differential. around, quality they're smart. extremely and they much as especially worry don't what up-down consumers because our I know and So

I and driver price, as we're we not even quality our strong we with making price we customer compete But would also as service. the help in purchase retention customers' of these And on more are really is. compete add on and as resonate compete service importantly, decisions with just that in just customer on investments a well.

quick And helpful. super how gone That's you with any you it. Or has just are more May a follow-up, it the seeing same then potentially for further on any of Got Is color stability? but improvement? guys? quarter-to-date,

Yes.

X we're difference last quarter-to-date, in. So only weeks quarter, like than

of were big and And when more we confident talking us. weeks, gave So QX, about we X it. we ahead had are our weeks

it. in weeks, wouldn't first the why much still but confident which our want guidance, to X on I is into don't comment very we're too So I read

of next Oppenheimer. the Your Brian line from question with Nagel comes

Very nicely quarter. nice really another on Congrats done.

-- question, bigger I one picture. I I'll move the but it So -- to question look, have maybe think it's

maybe to margin top we're here, better but soft, watching unfold still I increases. here. -- model So mean, still line continue your trends, sales, operating you're but soft, are have getting these you

guess know trends certain what get top as at I here So brands, continue recognizing but will is a your point P&L? growth to normalized you you any the question the leverage to -- wouldn't that you when for don't as for is, -- look back I have through significant line happens, that your rates out company, the you believe get there reason to that renormalize,

lot tell, was just basis comp, time easier. would that XXX is and But morning it. there's of to every comfortable not in meetings question, the why to I levers it's And a lot a high-teens that Thanks way, range. mid- guidance the business. different we of our it line. operating drop bottom points is basis to easy long-term still feel Brian. wish Monday x that for which margins, in will understand would for the I go asking Certainly, say points my

Okay.

broader in job very Any aggressive? there that Is a aggressive? it nice seeing Maybe on you're competing one appreciate managing promotionally more I slip sector-wise. just you promotions. say? are done you've I Jeff. change still -- that, to Again, it more out will that? Is -- your so So nice What with, getting question,

just looked a it's very site, when the category, the specialties are you can everything. things of the -- XX% see off lot names. the some bigger whole are XX% that I And look talking whole aggressive. the but not just have board, whole across specialty that still off And take the moving, we category. of a through browse the then smaller brands I'm Yes,

with you if People XX% me have playing rewards. with are give in the department e-mail. stores double offers shipping. They're your They off playing that are e-mail

that appear is it know So thing doesn't And I where the don't less what been hasn't is promotional. that a there been. -- it's to my It -- and It extremely it that's to all. is don't particularly time do. is. certain it categories way career that's how only remember people getting in aggressive out I in the at be

comes line Evercore with question next Wintermantel of from Oliver Your the ISI.

you XX.X% without year? Or today's you and high get the XX% back And guidance the about messaging? Is then on that margin how adjustment. longer-term year explain to long-term for your operating -- of how for I to guide want then mid long-term margin to the consistent. this sounds very think guide maybe can teens the and you your versus can margin this the That just very, to Yes. year's guide

XX.X%. months, is margin if our margin sustainable. XX% XX, going? past operating current established margin floor. think we one to When I been back of a the operating And the our XX.X% is is delivered operating margin where point In term margin Yes. XXXX, XX.X%. we year, key guide think operating this long about XX That's guidance, we the the we think We the over operating started questions our at is guidance,

XX.X% Now margin XX% -- adjustment. the without out-of-period we're sorry, the without operating guiding to

sustainable we've level a what we've message been is term. at that's what are teens is achieve. improved as and Williams-Sonoma, the guidance, mid- in we look, our long to over that Margins high key the But it's margin. think I to structurally is And And it's able sustainable. our Inc. the for

or on dollars follow then Got mostly units? it. that up Was just down inventories And to XX%.

Well, we in dollars. dollars, report in cost

trends. metric. overall, business dollar well a our is inventories was our our it And positioned support are So to message

line Morgan with Gutman Simeon of Your comes the from final Stanley. question

on My first question, back it's margin. gross

So savings. you supply are some lapping chain

still had that merch supply chain just merch significant why promos, continue the shouldn't it there gains what drove And aren't hold This if gain XXXX? shipping to And margin? And level in margin? clarify, see or margin merch is you quarter, there. a throughout in the the we fewer and

Simeon.

we of supply XXX this of basis think chain year. last let's this. headwinds So year, QX about In from lapped points

So there's reported, that about between and XXX points the excluding the we that adjustment. basis out-of-period XXX

there some So that were merchandise were margins, some it supply there and that just were efficiency. merchandise margins were chain was not

And in merchandise year. And also there, last benefit year-over-year from later the versus as efficiencies, we're other quarter. merchandise lap to in the freight but delivered our started while we we year promotions we margins can supply we reduce price did -- on, there's piece last efforts lap over year-over-year. chain the is in continue in started selling. to margins, the we Certainly, in -- starting here that But full also there progressed improvement lower also is year. we through reduce ocean still is did there to some We that

our great line, We're year, early the So lap returns feel there's starting of but we in bottom here. and about margin uncertainty. But a lot compares there's look, it's diminishing harder the in results. to

follow-up is if And or gross the a the IMUs markups of good over-indexes, a in same? that guide to margin then newness, or about The the to just that. that some

flat there's year-over-year between We're results. the back quarters there the line. can takes how the goes guidance. and essentially margin there And puts guiding that levers X same. within that the But it gross about to probably SG&A. pull We bottom top will we guide are It's our drive and and to give we next be and

to come in newness margins rebuy in we've when often we're we're buy a we chain new those supply able been Actually, And because buying on more. their renegotiate than costs efficiencies running. higher the more when doesn't something product, we the

So later increase the that bit would as we orders. come a little

accurate vendor more component our they the from reduction And say our I our on buys partners be just across our their efficient so will on be in numbers factories. the costs inventory more is another can our focusing board that really in to in efforts is vendors, and

wonderful talking that to the joining you thanks Take year. Thank one what's forward a hope of summer, us. component half the I have stable a Well, for And of look in be been and also you. that's been back you the going to we care. to you should on So through fall. all and of

conference. We thank joining. you for today's concludes This

You disconnect may your now lines.