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Williams-Sonoma Management Discusses Q2 2012 Results - Earnings Call Transcript

Most importantly, we drove this growth in revenue and earnings while simultaneously investing in our long-term growth initiative. All brands contributed to these results. Pottery Barn and West Elm again performed very well during the quarter. Pottery Barn Kids and Pottery Barn Teens both posted year-over-year increases, and Williams-Sonoma improved its revenue trend versus the prior quarter. This performance demonstrates to us that the strategies we are executing in each of our brands are working.

As we outlined in the beginning of year, our growth long term is going to come from 3 areas: growing our core brands, new brands and global expansion. Foundational to our growth strategies are e-commerce and supply chain, and we continue to make investments in both to improve customer service and quality.

In e-commerce, we implemented enhancements that further improve the shopping experience. We improved site navigation to accommodate our growing product assortment, making easier for our customers to find and buy. Data and algorithmically driven product recommendations, which we began implementing last fall, are having a measurable impact on increasing revenue per visitor.

In e-marketing, our focus on relevance in all of our marketing streams contributed to increases in advertising productivity.

In supply chain, we continue to be focused on improving the customer experience while reducing cost, and this quarter, we made progress against that initiative.

And now let's talk about our core brand. In the Williams-Sonoma brand, comparable brand revenues decreased 0.4%. We are pleased with the progress we are beginning to see in the Williams-Sonoma brand as we execute the transformational strategies we have previously outlined for you. In addition to the improvement in revenue trends, we also saw substantial improvement in our selling margins on a sequential basis, and our product margins were up on a year-over-year. This is a very encouraging trend. It demonstrates that we can drive sales while at the same time improving our selling margins in this brand.

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