Williams Sonoma 2Q15 Earnings Call Notes

Partnership with AwesomenessTV to reach Gen Z

“In order to attract new customers, PBteen continues to increase its social media reach. In July, PBteen announced a partnership with AwesomenessTV, a multi-platform media company that is a global leader in engaging the Gen Z audience.”

Still working through port strike frictions

“During the second quarter, as expected, we saw higher shipping and fulfillment related costs from shipping inefficiencies stemming from inventory shortages and unbalanced inventory positions across our distribution centers. We entered the period with elevated backorder levels as a result of delayed receipts. In order to get the goods to our customers as quickly as possible, multiple deliveries on a single order as well as out-of-market shipments were made as we got back in stock.”

Key initiative in inventory optimization

“one of our key initiatives is inventory optimization. We are investing in technology, including enhanced inventory planning and allocation systems and upgrades to our customer order visibility tools, as well as incremental labor and shipping costs throughout the back-half of the year.”

Expect additional shipping costs to continue but not to the same degree

“we expect some additional labor and incremental shipping costs will continue primarily in Q3, but obviously not to the degree we saw in the first-half as we continue to rebalance our inventory levels, especially in our West Coast DC. But we’re also accelerating our investment in technology. So it’s not just a labor cost, it’s also an investment in technology.”

Inventory tools that they’re investing in

“accelerating our investment in inventory tools that will allow us to better forecast our inventory flow and space capacity requirements by DC, brand, and channel. And additionally, future system enhancements will give us better customer order visibility, allowing us to know what every touch point where that inventory resides.”

Port disruption caused us to reexamine the whole supply chain

“while the port disruption was extremely difficult, the good news is that, it caused us to reexamine every single element of our supply chain. And we have identified significant opportunities to improve service levels and over time drive down costs.”

Sometimes customers want to shop online, sometimes in store

“obviously, sometimes the customers are going to want to shop online, sometimes they want to shop in the store. And we want to serve them wherever they want to shop.”

Three weeks into the quarter, haven’t seen much volatility

“On the macro, as I said earlier we are three weeks and we have a Labor Day shift. We haven’t had a lot of market volatility. We never read too much into short-term volatility changes that are based on all the market we’ve seen it before. But the balance of what we’re seeing is that, we have a strong lineup for the balance of the year.’