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Williams-Sonoma Inc WSM
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/14/2012

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Williams-Sonoma, Incorporated Third Quarter 2012 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session after the presentation. This conference is being recorded.

I'd now like to turn the call over to Steve Nelson, Vice President of Investor Relations, to discuss non-GAAP measures and forward-looking statements.

Stephen C. Nelson - VP, IR: Good afternoon. This afternoon's conference call should be considered in conjunction with the press releases that we issued earlier today. Our earnings press release and this call contain non-GAAP financial measures that exclude the impact of unusual business events. These non-GAAP financial measures are provided to facilitate meaningful year-over-year comparisons. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and an explanation of why these non-GAAP financial measures are useful are discussed in Exhibit 1 and elsewhere in the earnings release.

The forward-looking statements included in this afternoon’s call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements address the financial condition, results of operations, business initiatives, trends, guidance, growth plans, and prospects for the Company in 2012 and beyond, and are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the Company's current press releases and SEC filings, including the most recent 10-Q for more information on these risks and uncertainties. The Company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call.

I will now turn the conference call over to Laura Alber, our President and Chief Executive Officer to discuss our third quarter 2012 results and our outlook for Q4 and fiscal year 2012.

Laura J. Alber - President and CEO: Thanks Steve. Good afternoon and thank you for joining us. On the call with me today are Pat Connolly, our Chief Marketing Officer; and Julie Whalen, our Chief Financial Officer. Today will be discussing our third quarter 2012 results and our outlook for the fourth quarter and fiscal year, but first on behalf of on all us at Williams-Sonoma, Inc. I would like to express my concern for the welfare of those individuals and families impacted by Hurricane Sandy. The storm created significant hardship for many of our friends, families, colleagues and customers and we've seen an overwhelming response from associates companywide in their efforts to provide support to the impacted communities and while the recent storms have caused some disruptions to our business, our response has been focused on assisting our associates and customers in need.

Now let's discuss our third quarter, where we again delivered strong performance across every one of the key metrics in our business; revenues, operating margin and earnings per share. Diluted earnings per share grew 20% on net revenue growth of 9% with comparable brand and revenue growth accelerating to 8.5% from 7.4% last quarter. E-commerce net revenues grew 17% and operating margin exceed last year's Q3 rate by 50 basis points, growing to a third quarter record of 8.4%.

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