On the recently completed show Friends, David Schwimmer's character, Ross, had his apartment decorated exclusively with Williams-Sonoma's (NYSE:WSM) Pottery Barn furniture. America must be taking his friendly cue, because it is obvious from Williams-Sonoma's earnings release that people can't get enough of the company's products.
Now that Ross and Rachel are finally back together, we can all move on to more important things (like watching the new season of The Apprentice and the American Idol finale). Not that I watched Friends for the final three years leading up to the last episode, but I do feel a sense of closure anyway.
Getting back to business... Williams-Sonoma reported first-quarter earnings today of $0.18 per share, which was $0.02 better than the analysts' estimate and beat last year's number by a healthy 60%. The company's 19.4% increase in net revenues was primarily driven by Pottery Barn, Pottery Barn Kids, and Williams-Sonoma stores. A 6.8% overall same-store sales gain was bolstered by double-digit gains at Pottery Barn and the company's outlet stores.
Williams-Sonoma is doing so well that it decided to use some of its cash to repurchase up to 2.5 million of its shares. Also, the retailer's guidance for the second quarter of $0.18 to $0.20 per share is still in line with the consensus estimate of $0.19.
While rival companies such as Bed Bath & Beyond (NASDAQ:BBBY) and Linens'n Things (NYSE:LIN) have also benefited from the positive housing market, other companies such as Pier 1 Imports (NYSE:PIR) and Restoration Hardware (NASDAQ:RSTO) have had some bumpy patches along the road. Williams-Sonoma has successfully expanded beyond the storefront to the catalog business, where it can effectively compete with online wonders such as Amazon.com (NASDAQ:AMZN).
Williams-Sonoma continues to take advantage of a positive housing market trend that includes mortgage rates that are still very attractive. The company, while not recession-proof, has established an effective branding strategy by offering very high quality products for reachable prices. Additionally, a major part of the company's success is its ability to attractively and neatly display a broad array of products in a manner that the most fastidious among us could appreciate.
With its current feel-good outlook, the favorable housing environment, and its differentiating characteristics, things should keep looking up for Williams-Sonoma.
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Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.
