Shares of Williams-Sonoma Inc. (WSM 0.23%) fell 8% Thursday after the company released its latest quarterly results. But that certainly doesn't mean Williams-Sonoma's second quarter was bad.

Another solid performance
Quarterly revenue climbed 8.5% year over year to to $1.127 billion and -- with the help of share repurchases, including 899,301 shares bought back for $72 million in Q2 -- translated to a 9.4% increase in earnings per diluted share to $0.58. Both figures were slightly above the high end of Williams-Sonoma's own guidance, and analysts, on average, were anticipating roughly the same earnings on slightly lower revenue of $1.11 billion.

Included in Williams-Sonoma's top line was 9.1% growth in e-commerce net revenue to $570 million and a 7.9% increase in retail revenue to $557 million. Comparable brand revenue growth came in at 6.3%, including 6.4% growth at Pottery Barn, 15.7% at West Elm, 3.3% at Pottery Barn Kids, and 3.9% PBteen. Meanwhile, the core Williams-Sonoma concept endured a modest 0.3% comparable brand decline.

"We are pleased to have delivered another quarter of solid performance," added Williams-Sonoma CEO Larua Alber, "once again demonstrating the competitive advantage from our multi-brand, multi-channel, business model.

Echoing last quarter's solid performance, Alber also noted the company incurred incremental supply chain costs to restore in-stock inventory levels, and offset the negative effects of recent West Coast port disruptions. Considering Williams-Sonoma's results largely lived up to expectations, it's evident the year-to-date impact of this disruption was largely accounted for in analysts' models.

What? No raise?
Unfortunately, investors can't say the same looking forward.

For the current quarter, Williams-Sonoma expects revenue of $1.19 billion to $1.22 billion, with comparable brand revenue growth of 4% to 6% and earnings per diluted share of $0.68 to $0.73. Analysts, on average, were expecting third-quarter revenue at the high end of that range and earnings of $0.75 per share.

Finally, despite its slightly better-than-expected second quarter, Williams-Sonoma simply reiterated 2015 guidance for revenue of $4.95 billion to $5.02 billion, comparable brand revenue growth of 4% to 6%, and earnings per diluted share of $3.35 to $3.45. That includes a negative impact from the west coast port disruption of $30 million to $40 million in revenue, and a per-share reduction in fiscal year earnings of $0.10 to $0.12. By comparison, Wall Street was anticipating a raised 2015 forecast with revenue $5.01 billion, and earnings of $3.48 per share.

During the subsequent conference call, management explained that, while healthy levels of core inventory have been restored and out-of-stock items are lower going into the third quarter, their guidance reflects continued incremental investments in the supply chain in the second half of the fiscal year. That includes investments in technology for inventory planning and allocation, upgrades to customer order visibility tools, and incremental labor and shipping costs. 

Williams-Sonoma CFO Julie Whalen highlighted the end goal of these investments, stating:

Our mindset is one of continuous operational improvement. Our supply chain is one of our competitive advantages. And as we grow our furniture business, continuing to invest and delivering high customer service levels is strategic. We are committed to putting the customer first, which means the right inventory in the right place with a superior customer delivery experience.

Of course, we can't simply ignore the negative effects of the West Coast port slowdown, and the market obviously wanted more from Williams-Sonoma on the guidance front. For what it's worth, Whalen also noted guidance excluding the impact of the ports is in line with the company's three-year outlook, which calls for top-line growth in the mid- to high-single-digit range and growth in earnings per share in the low-double-digit to mid-teen range.

In the end, though, the market obviously wanted more from Williams-Sonoma on guidance, I think management has its priorities straight by both putting customers first and continuing to invest to achieve consistent operational improvement.