Williams Sonoma on holiday vacation

Shoppers pass in front of a Williams-Sonoma store on the mall at Short Hills Shopping Center in Short Hills, New Jersey.

Gaby Jones | Bloomberg | Getty Images

As the big holiday gatherings return, a wave of party hosts are dusting off glasses of champagne, showcasing new skills like baking and showcasing recipes they’ve learned during the pandemic.

NS Williams Sonoma And other retailers, this is an opportunity to sell dishes, kitchen utensils and more – and get people to put these items on their wish lists.

Williams-Sonoma, in particular, has been in trouble over the past year as stay-at-home orders have turned many Americans into amateur chefs, inspiring them to choose cooking and baking as hobbies and buy new furniture and decor. Besides its main logo, the parent company owns other brands such as Pottery Barn and West Elm.

The company’s shares have doubled in value since January. The stock hit a 52-week high of $223.32 on Monday, but most recently traded on Wednesday at around $210, giving it a market capitalization of around $15.6 billion. However, the home retailer said Americans still had a huge appetite for cooking, entertaining and beautifying their homes. She expects these trends to give her a chance that will continue after the holidays.

In the coming years, Williams-Sonoma expects its annual revenue to grow at a medium to high single-digit pace. It expects to reach $10 billion in revenue by 2024, as it leverages its interior design and digital investments. Macro trends such as a strong housing cycle will provide further support.

This year, growth will be more robust. On Thursday, the retailer raised its financial forecast for 2021, forecasting revenue to rise 22% to 23% from the previous year.

Impress friends with your cooking skills

Ryan Ross, president of the Williams-Sonoma brand, said sales in recent weeks reflect that Americans are planning more festive Thanksgiving and bigger holiday parties.

He said shoppers are buying larger tablecloths, flatware and larger sets of wine glasses than they were a year ago. Food order volumes have also grown, with larger turkeys selling out faster than smaller turkeys and getting more ready-made meals or side dishes to serve. Plus, he said, as people become more confident in the kitchen, they upgrade their tools, from more expensive knife blocks to fancy bakeware.

“While the world opens up, people still love to cook,” he said in an interview. “Once they know how to cook, they love to cook, and they want to impress their friends with their culinary skills.”

Laura Alper, CEO of Williams-Sonoma, said people are excited to see family and friends again.

She said in an interview on Friday with CNBC Jim Cramer employment “mad money“Do you have a turkey for two? It’s been a bit of a disappointing season. This year, people are eager to get back together and celebrate, decorate their homes, give gifts and all those great things we couldn’t do last year.”

Ross said that cooking has become a way of relaxation and comfort for people.

He said, “It becomes a release.” “There is a sense of calm and hobby in cooking that as things open up and people travel, the appreciation for food and the transparency of what’s in your food won’t change.”

Home furnishing “partially”

Cristina Fernandez, senior research analyst at Telsey Advisory Group, said the company has room to work with furniture sales in particular. Many Americans are still decorating the big homes or second homes they bought during the pandemic.

“When people move in, they usually furnish their homes in stages,” she said. “They will go from room to room. They will clean the kitchen and then say, ‘I have a nice kitchen, let me do the next room.'”

It raised its price target for Williams-Sonoma after it reported earnings last week from $220 to $250, which is about 19% more than where it is currently trading. The company ranks the company as superior in performance.

Fernandez said the company had an advantage because the demand for household goods was so high. He has been able to undo the promotions.

Going forward, the major brand faces tougher comparisons and could be hurt next year if consumers move to lower-priced furniture and cookware due to inflation or other spending priorities, she said. Her furniture line, Williams Sonoma Home, tends to have a higher price point than Pottery Barn and West Elm.

In the last quarter, its furniture-focused brands experienced the fastest growth. Same-store sales for the third quarter of financial West Elm are up 22.5% from a year ago, while Pottery Barn Kids and Teen jumped 16.9% and Pottery Barn jumped 15.9%. Sales in Williams Sonoma stores have been open for at least 12 months and the e-commerce business is up 7.6% year over year in the same period. But that was on top of a 30.4% rise last year.

Together, the parent company posted a gain in same-store sales of nearly 17% for the three-month period, topping Wall Street estimates.

Fernandez expects Williams Sonoma’s flagship brand to be able to drive sales by expanding private label products and exclusive merchandise, such as meat rubs and spices from grilling company Traeger or premium cookware approved by celebrity chefs like Bobby Flay.

Earlier this month, Williams Sonoma launched a membership program called Williams Sonoma Reserve to keep customers engaged. Members receive free shipping on many items, access to a recipe app, virtual cooking classes, and events with celebrity chefs like Ina Garten. The subscription service costs $99 for a year. Customers can also subscribe to the Recipes-only app, which costs $39.99 and includes how-to videos.

Cookware is on display at the Willams-Sonoma retail store in Corte Madeira, California.

David Paul Morris | Bloomberg | Getty Images

Getting ready for the guests

Retailers selling household goods will have multiple ways to take advantage of the holiday period, said Joe DeRochowski, a home industry consultant for the NPD Group. The initial wave of consumers will come with new coffee makers, cookie cutters, and more as they prepare for the arrival of guests.

More sales can come when people order these items as gifts or buy them for others. At parties, he said, people might discover an attractive kitchen gadget or gadget after hearing friends or family rave about it — and later decide to buy it.

He said sales of hosting-related items, such as glassware and dishes, and stockpiling for leftovers, tend to appear in early December. However, retailers will have to find ways to keep sales going as consumers spend more time traveling, eating and doing other activities outside the home next year.

Household industry spending by unit is expected to decline 5% thereafter in 2022 compared to 2021, according to NPD projections. However, it will still be about 14% higher than 2019 levels. The NPD category includes household appliances, kitchen electronics, and home environment items such as vacuum cleaners, air purifiers, and personal care products such as electric toothbrushes. Does not include furniture or home decor.

Derochowski of the NPD said that comfort-related elements could be a potential area of ​​growth. He said people might buy robotic espresso machines, robotic vacuums or multiple cookers like air fryers, slow cookers and roasting ovens when they get busier again.

“The comfort level of our lives has been connected,” he said.

As more people are enjoying this holiday season, they may also give more gifts of homemade cookies and jams. Chris Malkowski, CEO of Home Solutions at Newell Brands, said she expects to see sales of Rubbermaid’s Brilliance food storage line and Ball’s mason jars pop.

Newell Brands

Move to higher quality

Other retailers also cited a pent-up desire for Americans to host family and friends during the holiday season and beyond. Louie And Home Depot They expanded their selection of home décor and displayed it on websites and advertisements.

Even a consumer electronics retailer best buy She wanted to be more into home furnishings. Earlier this month, it acquired Yardbird, a direct-to-consumer brand that sells outdoor furniture, such as patio sets, fire tables, and bamboo chairs.

These retailers compete in a highly segmented market. Williams-Sonoma was able to cash in when one of its competitors, luxury kitchen retailer Sur La Table, filed for bankruptcy during the pandemic and closed several of its stores.

Real estate trends have also worked in favor of retailers – especially as more millennials are becoming homeowners. Alper said hybrid business measures are also raising the company’s sales.

“If you’re home one day a week or half a day, and you work fewer hours and come home and do some of that early in the morning, you’ll care more about what your home looks like,” she said. employment “mad money. “

Newell Brands, a company that owns Calphalon, Ball and Rubbermaid, said consumers have gravitated toward more high-end kitchen supplies. Its products are sold by stores including bed bath and outsideAnd WalmartAnd costco and Williams Sonoma.

“What I’ve seen across the board is this attraction towards more mid-range and premium price points or higher-quality products,” said Chris Malkowsky, the company’s CEO of Home Solutions.

That’s the case even with food storage, she said, as more consumers are buying sleeker-looking glass containers from Rubbermaid or high-tech vacuum sealers from FoodSaver.

She said she expects sales of Ball Mason jars and other storage containers to drive sales this holiday season. Many customers who buy cookware have missed making rhubarb jam, cookies, or other homemade food gifts for family and friends during the pandemic.

“Food lovers really love to give something they made as a gift,” she said.

She expects the launch of more advanced and innovative kitchen appliances to drive sales in 2022. Plus, she said, inflation may already inspire more Americans to keep preparing their meals to save money.

Own an entertaining space

Ross said food and furniture are two areas in which leading brand Williams-Sonoma expects to expand. Its stores and website carry a multitude of shelf-stable staples, from cake mixes to pasta sauces, with the Williams-Sonoma brand. It also ships prepared food to the doors of people’s homes. They carry gourmet products, sometimes with a well-known brand like Tequila Company Casamigos.

Ross said consumers can expect to see a variety of foods, such as more international flavors and cocktail mixes, next year.

Ross said the leading brand has also honed its furniture brand’s aesthetic, Williams Sonoma Home, to be “more refined and nurturing” to become an “online luxury furniture destination.”

He said it’s a natural occasion when people prepare to show off their homes during the holidays and beyond.

He said, “If you are entertaining, you need a sitting room. If you are entertaining, you need a guest room.” “If you’re entertaining, you need a dining table. If you’re cooking, you need to outfit your kitchen — so the bar stools, you need lighting, you need cooking utensils, and you need a countertop that sits above the dining table. So our point is really It is the possession of cooking and entertaining.”

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