Williams-Sonoma, Inc.

Welcome to the Williams-Sonoma, Inc. Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the conclusion of the prepared remarks. I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining our second quarter earnings call. I'd like to remind you that during this call, we will make forward-looking statements. with respect to future events and financial performance, including guidance for fiscal 23 and our long-term outlook. We believe these statements reflect our best estimates. However, we cannot make any assurances these statements will materialize, and actual results may differ significantly from our expectations. The company undertakes no obligation to publicly update or revise any of these statements reflect events or circumstances that may arise after today's call. Additionally, we will refer to certain non-GAAP financial measures. These measures should not be considered replacements for and should be read together with our GAAP results. A detailed reconciliation of non-GAAP measures to the most directly comparable GAAP measure appears in Exhibit 1 to the press release we issued earlier this morning. This call should also be considered in conjunction with our filings with the FDC. Finally, a replay of this call will be available on our investor relations website. Now, I'd like to turn the call over to Laura Albert, our president and chief executive officer.

Thank you, Jeremy. Good morning, everyone, and thank you for joining the call. Before we get into the details of the quarter, I'd like to take a moment to thank the incredible team at Williams-Sonoma, Inc., Without their outstanding work, creativity, and relentless focus, none of the results we're reporting today would be possible. We are pleased to deliver another quarter of strong earnings. We significantly exceeded profitability estimates with an operating margin of 14.6%, with earnings per share of $3.12, well above our pre-pandemic results. Our sales ran negative 11.9 in Q2, but our two-year comp was essentially flat, and our four-year comp to 2019 was positive 39.7. We achieved these results against an increasingly promotional environment and softening industry metrics by leveraging our market advantages and focusing on regular price selling, driving improved customer service, and controlling costs. We're in a period where consumers are buying fewer large ticket furniture pieces than they did a year ago as they shift their spending. However, our advantage is our portfolio of brands serving a range of categories, aesthetics, and life stages. Only approximately half of our business is furniture, and we are seeing relative strength in kitchen purchases, fashion textiles, dorm, baby, and seasonal holidays. And our in-house design capabilities and vertically integrated sourcing organization allows us to design and develop quality products at a great value. But we are not only innovators, we are also operators. Core to our business model is a digital first, but not digital only channel strategy that supports our world-class shopping experience.