Williams-Sonoma’s direct-to-consumer revenue, which includes seven branded catalogs and six e-commerce sites, fell from $348.2 million during first-quarter 2008 to $254.2 million during the quarter just ended, a 27% drop. Retail sales dropped from $433.6 million to $357.4 million, a 17.6% decline, during the same period.
During first-quarter 2008, direct sales made up 44.5% of total revenue. A year later, this had fallen to 41.6%.
Within the direct segment, catalog revenue was $60.1 million, or 23.6% of direct sales, compared with $194.1 million, or 76.4% of sales, for online revenue. A year ago, catalog revenue was $96.7 million, or 27.8% of sales, and online sales stood at $251.5 million.
As previously reported, the company’s total first-quarter revenue dropped from $781.8 million to $611.6 million, and the company took an $18.7 million loss during the most recent quarter, compare with $10.4 million in net income.
Between first-quarter 2008 and first-quarter 2009, Williams-Sonoma’s catalog circulation dropped by 17.1%, and total page count fell by 22.7%. Total advertising costs fell by 30%, net of a 25% increase in online marketing, according to the documents filed with the Securities and Exchange Commission.
The Analyst’s Take: One wonders what really was behind the direct revenue drop outstripping the catalog page count drop. Is it just the economic times, or did Williams-Sonoma inadvertently cut bone when it thought it was trimming fat? Furthermore, Easter was a bit earlier in 2008, falling on March 23 compared with April 12 this year. Should the lead-up to the holiday have detracted from sales efforts, or should the additional weeks have provided more selling time?
