Builders have not been able to build new homes fast enough to meet demand. Rising wood prices earlier this year did not help.
But Alber wasn’t just talking about tenants wanting to flee the cities to the suburbs, which is a good thing for Williams-Sonoma, which also owns West Elm and Pottery Barn furniture retailers. He added during the call that “there are a lot of people who are looking for second homes and even if they can’t afford it, gathering resources with friends to complete this fantasy of buying a home.”
Alber cited estimates that show that “home sales in 2021 are expected to grow by more than 20%, the highest number of sales recorded since 2005.” Of course, that was just before the last real estate bubble burst. But Alber doesn’t seem worried about the housing market that will succumb to a similar fate soon.
“Acceptance of remote work is gaining momentum with a number of remote hybrid workers expected to double in five years from metrics prior to Covid,” he said during the call. “This is a really important trend that I don’t think is transient. I think it will continue to last for a long time.”
Investors also seem to understand Alber’s optimism. Shares of Williams-Sonoma rose 10% on Thursday to a new record. Ten Wall Street analysts raised their stock price target after the earnings report.
Williams-Sonoma said sales grew more than 30% in the second quarter. The company also raised its outlook for 2021 and the coming years. With more signs of confidence, Williams-Sonoma increased its dividend by 20% and also issued a new share repurchase program.