If you received a cool catalog in the mail recently, most likely it came from one of the companies under the umbrella of Williams-Sonoma (NYSE:WSM). The San Francisco-based home retailer is much more than just a pretty face, though; it has effectively leveraged its high-quality image to just about everything it markets.

A few months ago I got a catalog from a company called West Elm. After looking through the attractive mix of colorful home decorations and artsy furniture, I instinctively looked to see whether this company was flying solo or part of a bigger picture. When I saw the name Williams-Sonoma, the bigger picture was crystal clear. After all, Williams-Sonoma is a branding juggernaut that commands instant respect for its quality, fairly priced merchandise.

The company produced a 5% increase in same-store sales in its second quarter, led by a 10.2% jump at Pottery Barn and robust growth of 19% at its outlet stores. Williams-Sonoma's earnings of $0.23 per share widely beat the consensus estimate of $0.19 a share and the $0.15 it earned last year. Despite all of its success, the company remained extremely tight-lipped about future prospects, saying "our outlook for 2004 remains conservative due to the ongoing uncertainty in the macroeconomic and geopolitical environments." Roughly translated, management doesn't want to get too excited about the company's flowery prospects and overstate future numbers.

Williams-Sonoma upped its revenue guidance for the third and fourth quarters by 1% to 2% but kept its same-store sales projection at 2% to 4% growth. The company also lifted its full-year 2004 earnings expectations to $1.57 to $1.61 per share from $1.53 to $1.57.

Management is "encouraged" by trends it sees at the retail and catalog levels, especially in its Pottery Barn brands. Williams-Sonoma also plans to open three new West Elm prototype stores, introduce a Pottery Barn Home catalog, and complete the expansion of its East Coast distribution center in the coming months.

On the competitive front, Williams-Sonoma gets a run for its money from Bed Bath & Beyond (NASDAQ:BBBY) on certain items but has dashed far ahead of struggling Pier 1 (NYSE:PIR) (though Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) certainly sees something to like in Pier 1). With interest rates still warming the hearts of both mortgage brokers and homebuyers, Williams-Sonoma remains ideally positioned to take advantage of this trend. The company is plowing excess cash back into its brands and also buying back its shares as part of its 2.5-million-share repurchase plan. With the shares trading at 17 times next year's earnings estimate of $1.85 per share, which compares favorably with the company's expected growth rate of 18%, Williams-Sonoma still holds value.

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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.