WSM Williams-Sonoma Inc.

Management Discussion

• Net revenues in the second quarter of fiscal 2020 increased by $119,963,000, or 8.8%, compared to the second quarter of fiscal 2019, with comparable brand revenue growth of 10.5%. This increase was primarily driven by an increase ine-commerce
• COVID-19.
• For the second quarter of fiscal 2020, we delivered positive comparable brand revenue growth in all of our brands. The Williams Sonoma brand delivered a record quarter with 29.4% comparable brand revenue growth. We maximized on our customers’ shift to cooking at home during the pandemic, executed on a relevant marketing strategy to drive traffic to the brand, and introduced more exclusive, innovative products that are resonating during this time. The Pottery Barn brand had 8.1% comparable brand revenue growth. Our product line continued to improve with exciting new aesthetics and high-quality, sustainable products. Categories that saw particular strength in the quarter were outdoor furniture, work from home solutions and products that update family living spaces. In West Elm, we continued to deliver strong comparable brand revenue growth of 7.0% on top of 17.5% in the second quarter of fiscal 2019. The brand continues to have high appeal, particularly in our furniture categories, where we saw strong growth in outdoor as well as key successes in home office, dining and storage furniture this quarter. In our Pottery Barn Kids and Teen business we had 4.8% comparable brand revenue growth. One area of softness has been our backpack business as most schools are starting the academic year with distance learning, however, we are seeing a surge in our Study at Home solutions across both Pottery Barn Kids and Teen, as we become the destination for study from home products for kids of all ages.