Shares of Williams-Sonoma (WSM -0.88%) were up 13.9% as of 1:07 p.m. ET on Thursday after the company delivered better-than-expected earnings results. Comparable store-sales growth was strong, coming in at 9.5%. That represents an increase of 49.5% on a two-year basis.
Even more important was a slight improvement in gross margin, which shows the company handling the supply chain issues and inflationary environment well. The stock is down 22% year to date but has more than doubled over the last five years.
Williams-Sonoma is delivering balanced top- and bottom-line growth, which is not easy in this challenging economic environment for a retail stock. Even the company's two store brands, Pottery Barn and West Elm, reported balanced comp store-sales growth in the low double digits.
During the earnings call, CEO Laura Alber credited the company's e-commerce business for driving strong operating results:
Understanding our industry is key to putting our outstanding results in perspective. We operate in a large and fragmented industry that generates more than half of its sales from smaller brick-and-mortar retailers that do not have sophisticated e-commerce capabilities.
Alber said the company can capture more of this $830 billion addressable market.
Alber noted that while the near-term economic environment is "challenging," the housing market remains strong. Management believes the hybrid work trend with more people working at home will continue to drive momentum in home spending.
It should be noted that not all companies in the home goods market are reporting such strong numbers. Wayfair has reported falling revenue in recent quarters as more people return to in-store shopping. Offering customers both an in-store and online shopping experience certainly is a win-win strategy in 2022.
Management expects full-year revenue to be in the mid-to-high single digits. By fiscal 2024, revenue is expected to reach $10 billion, up from $8.2 billion last year.