Williams Sonoma 1Q16 Earnings Call Notes

Laura Alber

Julie Whalen

Tough to get a good read on the business at this time

“From a revenue guidance perspective, our second quarter revenue guidance reflects obviously our best estimates of the possible range of outcomes across our portfolio of brands, but it’s early in the quarter and it’s also a Memorial Day shift this year, which actually believe it or not, that holiday is pretty big for us. So it makes it extremely more challenging to get a good read on the business at this time. And like all of us, we’re seeing the relatively negative retail results out there. So at this time, we think our guidance is appropriate and it reflects our best estimate this early in the quarter.”

Supply chain initiatives growing inventories slower than sales

“So as part of our supply chain and inventory initiatives, we’ve actually been working on inventory optimization for a while now. We’ve been speaking to you about and we’re really pleased to be able to see that we’re finally able to demonstrate it, but the results are definitely becoming more apparent as we enter into 2016. As far as what we’ve been doing? We’ve been more aggressively managing the level of weeks on hand for each skew, which has allowed us not only reduce our inventory buys, but also allows us to liquidate our less productive skews and aggressively push more inventory to our outlets and this has allowed our inventory levels to be reduced obviously substantially and will allow us to ultimately generate supply chain savings by freeing up space in our distribution centers, reducing the off-site we’re trying to get out of and improving our labor productivity throughout our network.”