Williams Sonoma 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

balance near term market realities with commitment to strategic vision

“We are pleased that we were able to deliver these results against a more promotional backdrop. Our team’s skill in balancing near-term market realities with the commitment to our strategic vision is a defining characteristic of the organization.”

Expect a strong holiday season

“Based on the trends we are seeing, we believe our holiday decorating and gifting season from Halloween to Thanksgiving to Christmas will be successful. We are prepared to offer our customers the best quality, design and price in our category and continue to work diligently on operational improvements that will further differentiate us from the competition.”

Different promotions hit different margin lines

“because we’re 50% effectively e-commerce and 50% retail, we have a choice we can make, an operational decision. Do we get the sale by having a deeper promotion? Do we get the sale by offering free ship, for example? Those 2 hit gross margin. Do we get the sale by more e-mails, more catalogs, more paid search? That hits SG&A. ”

The customer was reacting to deeper promotions

“the customer was reacting better to deeper promotions this quarter.”

promotional environment out there

“The promotional environment I was referring to, I think, is touching every brand in the marketplace, including all of ours. The outdoor categories were most specifically promotional. You saw a lot of people come out of the gate on sale. And also in the kitchen, Williams-Sonoma Kitchen business, the outdoor product was much more promotional than we expected. ”

fight promotions by driving operational improvements and investing in supply chain

“it’s a reality of the marketplace that we have been talking about for a long time. And our long-term perspective on it is that is why we’re so aggressive on driving operational improvements and investing in our supply chain because we still see great opportunity to reduce our costs and efficiencies in those areas, and mostly because those areas are the most important areas that touch the customer. I think at the end of the day, the customer does like a sale, but when you’re buying furniture, you want quality. And you want to know that you’ve got the design you wanted and that you have incredible service. And for me, the service piece is key to why we continue to outperform. We’re obsessed with it, both online and offline, and we worked really diligently to create that really high-touch experience in all of our channels. “