That's not to say Williams-Sonoma's quarter looked bad at first glance. Quarterly revenue climbed 4.4% year over year to $1.357 billion, translating to adjusted earnings of $77.8 million, or $0.95 per share. Both ranges were technically within its quarterly guidance provided three months ago. But revenue arrived near the low end of its expected $1.355 billion to $1.38 billion range, while earnings were near the high end of its $0.90 to $0.95 per-share target.
Underlying Williams-Sonoma's light top line was its modest 3.1% comparable-brand growth this quarter -- near the low end of its outlook for growth in the 3% to 5% range. Within that, comparable-brand revenue was flat at Pottery Barn Kids and Teen, while climbing just 2.1% at its namesake brand, 1.4% at Pottery Barn, and a relatively strong 8.2% at West Elm.
Williams-Sonoma also revealed a healthy 8.2% increase in e-commerce net revenue (to $747 million) was held back by 0.2% growth in retail net revenue.
Still, Williams-Sonoma CEO Laura Albert focused on the positives, noting earnings arrived at the high end of guidance thanks to "continued strength in demand and customer growth."
"Given the substantial progress we've made in our business this year and our compelling pipeline of innovative product and inspiring content," she added, "we believe we are well-prepared to deliver this holiday season and remain on track to meet our full-year guidance."
To be sure, Williams-Sonoma reiterated its full-year outlook for revenue of $5.565 billion to $5.665 billion, with adjusted earnings per share of $4.26 to $4.36.
But in order to meet those goals, the company also provided relatively wide fiscal fourth-quarter guidance of $1.733 billion to $1.833 billion (assuming comps growth of 0% to 5%), with adjusted earnings of $1.89 to $1.99. By contrast -- and though we don't usually pay close attention to Wall Street's demands -- most analysts were anticipating holiday-quarter earnings and revenue near the top ends of those ranges.
Again, that doesn't mean this was an awful quarter for Williams-Sonoma. And a strong holiday season for the company could mean it will still live up to the market's lofty expectations. But with shares up nearly 30% from their lows in May heading into this report despite the broader market's recent pullback, it's no surprise to see the stock giving up some of those gains today.