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Online accounts for over half of Williams-Sonoma’s 2014 sales

March 19, 2015 05:11 PM
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Steady online growth in fiscal 2014 resulted in web sales accounting for more than half of all annual sales for home furnishings and specialty retailer Williams-Sonoma Inc. for the first time.

The multichannel retailer, No. 21 in the Internet Retailer 2014 Top 500 Guide, reported e-commerce revenue of $2.371 billion in fiscal 2014, up 12.1% from $2.115 billion in fiscal 2013. Web sales represent 50.5% of the company’s net revenue of $4.699 billion for the year.

Mobile commerce was a big factor in the retailer’s e-commerce growth during the year, increasing by 100% year-over-year, executive vice president Patrick Connolly told analysts on the retailer’s Q4 2014 earnings call. He did not provide an exact sales figure. Mobile sales accounted for $350 million in sales in 2014, according to estimates in Internet Retailer’s 2015 Mobile 500.

“We’re making great strides in site personalization and built-in customer recognition, then delivering personalized content and also improving the post-purchase experience,” he said, according to a transcript of the call obtained from Seeking Alpha.

The retailer plans to invest in e-commerce this year with an eye on capitalizing on the double-digit gains made in 2015, CEO Laura Alber said on the call.

E-commerce supports the chain’s stores, she said. “Our strategy with company-owned stores is to complement them with a strong e-commerce presence,” she said. “Of course, we’re investing in e-commerce. You can always make it more intuitive for the customer to shop.”

And while Williams-Sonoma posted gains in e-commerce and retail net revenue for both the fourth quarter and the fiscal year, executives warned that that growth may not continue due to a factor beyond their control. The recent labor strike at ports on the West Coast cost the company up to $40 million in sales, chief financial officer Julie Whalen told analysts. The strike will primarily impact the first quarter of fiscal 2015, Whalen said.

“We began implementing strategies earlier last summer to prioritize receipts and divert shipments to other ports on both the East and West Coasts, but given the size of our business and the type of merchandise we sell, there are limited options for mitigation,” she said. “No one expected, including us, that the West Coast port disruption would last as long as it did.”

For the fiscal year 2014 ended Feb. 1, Williams-Sonoma reported:

  • Net revenue of $4.70 billion, up 7.1% from $4.39 billion in fiscal 2013.
  • Retail net revenue of $2.328 billion, up 2.4% from $2.273 billion.
  • Net earnings of $308.8 million, up 10.7% from $278.9 million.

For the fiscal fourth quarter, Williams-Sonoma reported:

  • E-commerce revenue of $769.8 million, up 9.0% from $706.4 million during the same period last year.
  • Net revenue of $1.542 billion, up 5.2% from $1.466 billion.
  • Retail net revenue of $772.3 million, up 1.6% from $759.9 million.
  • Net earnings of $147.0 million, up 9.9% from $133.8 million.
 

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