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Chart of the day: Williams Sonoma guidance not showing recession cracks

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Yahoo Finance live anchors break down the chart of the day.

Video Transcript


BRIAN CHEUNG: Let's take a look now at our chart of the day. After reporting earnings this morning, Williams-Sonoma President, and CEO, Laura Alber said they are on path to become a $10 billion company in revenues by 2024. This was part of a presentation that they had presented actually before the earnings call that they had and the earnings numbers that they released just for this quarter.

But you can see that for the fiscal year 2021 it was Pottery Barn, West Elm, very consumer-facing names that were leading it. But take a look at the 2024 targets that they have, obviously, no concern over a recession on this front as they see further growth happening in those verticals. And by the way, the investors are seeming to react very positively to their most recent round of earnings, which had 9.5% comparable brand revenue growth in the quarter. Shares are up about 12% right now, Akiko, so.

AKIKO FUJITA: Yeah, and we heard some commentary from executives there, mid to high single-digit comps is what they're expecting. They're continuing that guidance too. I think it's interesting that Pottery Barn and West Elm are at the top there, because you know, if you think about what we've heard from other retailers, it's a move away from these big-ticket items, to things that are a little smaller, something like kitchen appliances which Williams-Sonoma has. But this again points to-- which may seem like an obvious thing to say but we haven't necessarily seen it reflected in the markets-- which is that every one of these retailers is looking at a different picture. There's an underlying theme to all of it but Williams-Sonoma does tend to compete on the higher end, luxury-- well, I don't know--

BRIAN CHEUNG: No, it is.

AKIKO FUJITA: --is it considered luxury?

BRIAN CHEUNG: They sell $20 soup spoons. I mean, it's definitely luxury. I think that when we talk about this, I mean, you bring up what is exactly the point, is that not all retailers are created equal. And in the same way that we're talking about the inflation story for a lot of those types of Dollar Tree, Dollar General types of companies, there's also a lot of benefit going to the large luxury retailers as well because the propensity to spend is completely unchanged by the high inflation that we're seeing because the rich can still spend money on a $20 soup spoon in 2022 even if there is a recession than they were in 2021 or 2020.

So what's really interesting. I think is specifically the housewares, so not necessarily furniture. Their investor presentation actually highlighted decor inside the home as a possible area of further growth. And that's a lot because of Zoom rooms, people having to decorate their backgrounds, they need expensive [? taste plants or-- ?]

AKIKO FUJITA: Don't people just use virtual backgrounds? Aren't we at virtual background stage now?

BRIAN CHEUNG: I mean, I feel like-- you know, I feel like towards the end of like the pandemic-- well, it's not quite over yet. But I feel like I saw more virtual backgrounds--


BRIAN CHEUNG: --in like the earlier part of 2021 than I saw in 2020 for some reason.

AKIKO FUJITA: I feel like the virtual backgrounds are getting better but anyway, that's aside, decor.



BRIAN CHEUNG: And $20 soup spoons.

AKIKO FUJITA: $20 soup spoons, I'm going to go look for one of those.