Williams-Sonoma to ride holiday entertaining trend
Shoppers pass in front of a Williams Sonoma store at The Mall at Short Hills shopping center in Short Hills, New Jersey.
Gabby Jones | Bloomberg | Getty Images
As bigger holiday gatherings return, a wave of party hosts are dusting off the champagne glasses, flexing new skills like breadmaking and showing off recipes that they learned during the pandemic.
For Williams-Sonoma and other retailers, that’s an opportunity to sell platters, kitchen appliances and more — and nudge people to put those items on their wish lists.
Williams-Sonoma, in particular, has been on a tear over the past year as stay-at-home orders turned many Americans into amateur chefs, inspiring them to pick up cooking and baking as hobbies and buy new furniture and decor. Along with its flagship banner, the parent company owns other brands like Pottery Barn and West Elm.
Shares of the company have more than doubled in value since January. The stock hit a 52-week high of $223.32 on Monday, but was recently trading Wednesday at around $210, giving it a market cap of about $15.6 billion. Yet the home retailer said Americans still have a big appetite for cooking, entertaining and sprucing up their homes. Those trends, it expects, will give it an opportunity that will last after the holidays are over.
In the coming years, Williams-Sonoma expects its annual revenue to grow at a mid-to-high single digit pace. It expects to hit $10 billion in revenue by 2024, as it benefits from its in-house design and investments in digital. Macro trends like a strong housing cycle will provide further support.
This year, growth will be even more robust. On Thursday, the retailer raised its fiscal 2021 outlook, predicting revenue will rise 22% to 23% from the prior year.
Impressing friends with cooking skills
Sales in recent weeks reflect that Americans are planning for a splashier Thanksgiving and bigger holiday parties, said Ryan Ross, president of the Williams Sonoma brand.
Shoppers are buying bigger tablecloths, more flatware and larger sets of wine glasses than they did a year ago, he said. Food orders have grown in size, too, with big turkeys selling faster than small ones and people getting more prepared meals or side dishes to serve. Plus, he said, as people become more confident in the kitchen, they are upgrading their tools, from pricier knife blocks to fancier bakeware.
“While the world is opening up, people are still loving 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.”
Williams-Sonoma CEO Laura Alber said people are eager to see family and friends again.
“Last year, was the year that the holidays were forgotten, pretty much,” she said in an interview on Friday with CNBC’s Jim Cramer on “Mad Money.” “Did you have turkey for two? It was a bit of a depressing season. This year, people are dying to get back together and celebrate and decorate their homes and gift giving and all of those great things…
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