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Bull of the Day: Williams-Sonoma (WSM)

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Based in San Francisco, Williams-Sonoma, Inc. (WSM - Free Report) is a multi-channel specialty retailer of premium quality home products. Its brand portfolio consists of Pottery Barn, West Elm, Potter Barn Kids & Teen, Mark and Graham, and the namesake Williams-Sonoma.

Blowout Third Quarter

Last month, Williams-Sonoma posted better-than-expected third quarter results, sending the stock as much as 7.5% higher.

Total comparable sales jumped 24.4% and e-commerce sales, which now make up roughly half of the company’s revenue, jumped 49% (and contributed almost 70% of total sales).

Unsurprisingly, in-store sales were down 11% in the quarter.

Sales across all of its brands were strong, with the Williams-Sonoma brand seeing 30.4% comps growth.

Overall revenue increased 22.4% to $1.77 billion, and adjusted EPS of $2.56 easily beat expectations of $1.53.

“Our vision is to own the home. And, with our distinctive positioning we will only become more relevant. We have the strategies, the team and the world-class platform to maximize the industry trends that favor our business and successfully execute on our growth opportunities,” said CEO Laura Alber.

WSM is Surging

 

Since March 23, shares of Williams-Sonoma have climbed over 200%. Estimates have been rising too, and WSM is a Zacks Rank #1 (Strong Buy) right now.

For the current fiscal year, eight analysts have revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up from $6.38 per share to $8.19 per share. Earnings are expected see double-digit growth for the current fiscal year, up nearly 70%.

Like fellow home retailers Wayfair (W - Free Report) and RH (RH - Free Report) , WSM has seen a sales boom during the pandemic as people stuck at home looked to renovate and refurnish their living spaces. The company will only continue to benefit from the accelerated shift to online shopping as well, something it’s strived to perfect during this challenging year.

Looking ahead, WSM declined to give guidance for the current holiday quarter, but still expects annual revenue growth in the mid to high single digits.

Additionally, back in October, WSM announced that it would be raising its quarterly dividend by 10%, and the new payout is $0.53 per share. Shares currently yield 1.8% on an annual basis

If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep WSM on your shortlist.

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