Source: Williams-Sonoma.

Williams-Sonoma (NYSE:WSM) is firing on all cylinders, and the company is materially outgrowing competitors such as Bed Bath & Beyond (NASDAQ:BBBY) and Pier 1 Imports (OTC:PIRRQ) because of its valuable brands and successful multichannel strategy. Can the company continue outperforming, or is it time to take some profits in Williams-Sonoma?

A surprisingly strong company
The retail industry is going through a notoriously difficult period as consumer demand remains lackluster and harsh weather conditions are affecting many companies in the industry. In this context, the remarkably strong performance reported by Williams-Sonoma looks even more impressive.

Net revenues during the last quarter came in at $1.47 billion, an annual increase of 10% when excluding the extra week in the fourth quarter of 2012, and better than the $1.43 billion forecast on average by Wall Street analysts. Comparable brand revenues increased by 10.4% during the quarter, with all of the company's brands reporting increases versus the same quarter in the prior year.

Earnings per share were also above analysts expectations at $1.38, versus an average estimate of $1.35 by Wall Street analysts.

In addition, forward guidance was also quite strong: The company is forecasting sales to be between $4.63 billion and $4.71 billion for fiscal 2014, with comparable-brand sales increasing in the range of 5% to 7% during the year.

Beating the competition
Bed Bath & Beyond will be reporting earnings for its fiscal 2013 fourth quarter on April 9, but the company has recently issued a press release cutting its guidance for the period due to harsh weather conditions. Management says the unusually tough winter forced the company to close many of its stores on multiple occasions, and this has taken its toll on financial performance.

Bed Bath & Beyond is expecting an increase of approximately 1.7% in comparable sales for the quarter versus a previous guidance of a 2% to 4% growth rate. Earnings per share guidance for the quarter was also reduced to between $1.57 and $1.61 versus a prior range of $1.60 to $1.67.

Pier 1 Imports also lowered its estimates for fiscal 2014 fourth quarter and full year because of weather conditions. The company is forecasting a comparable-store sales decline of approximately 5% during the 13 weeks ended on March 1, and earnings-per-share guidance for the quarter was reduced from between $0.47 and $0.52 to between $0.40 and $0.41.

Much more than a brick-and-mortar store
Companies targeting the high-end segment of the pricing spectrum have been doing generally better than other retailers lately, and Williams-Sonoma's management team is also doing a sound job on multiple fronts. According to CEO Laura Alber, the company is outperforming the competition thanks to the strength of its brands, its multichannel approach to the business, and solid execution.

Online is becoming a crucial area in the retail business lately, and Williams-Sonoma is performing exceptionally well in that key segment. The company is deeply focused on expanding its online presence via multiple platforms and social networks, while at the same time capitalizing data analytics tools to improve product development, marketing, and inventory decisions.

Direct-to-consumer sales represented a whopping 48% of total revenues during the fourth quarter of 2013, a big increase of 19% to $706 million versus $634 million in the fourth quarter of 2012.

A leading online presence is a huge advantage for Williams-Sonoma versus the competition considering recent industry trends in the retail business. Especially in times of unfriendly weather conditions, when many consumers prefer to make their purchases from home, this was most likely an important factor behind the company's superior performance during the last quarter.

Not only that, but direct to consumer sales also carry substantially higher profit margins than traditional brick-and-mortar transactions, so the company has both a big competitive advantage and a material profitability driver in its online presence.

Bottom line: Should you buy?
After approaching new all-time highs, Williams-Sonoma is now trading at a forward P/E ratio around 18. This is a substantial premium versus industry peers, but not excessive for a high-quality company outperforming the competition by a considerable margin. Williams-Sonoma is well positioned to continue rewarding investors with above-average growth over years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.