Top Performer for Wed: Williams-Sonoma (WSM)

Williams-Sonoma, Inc. (WSM - Snapshot Report) will soon report its fiscal fourth-quarter results, and indications are good that the specialty retailer of home products will report a sixth straight quarter of better-than-expected profit.

Thanks to strong holiday sales, the company raised its guidance for the fiscal fourth quarter and fiscal year in mid January.

WSM made the Zacks #1 Rank Top Performers List for Wednesday with shares that have gained approximately 5.8%. Volume has soared to more than 3.7 million shares, compared to the daily average of around 1.7 million.

Earnings estimates for this fiscal year and next have been rather steady over the past 30 days, but moved sharply higher over the past 2 months in response to the improved guidance.

Williams-Sonoma is a nationwide specialty retailer of high quality products for the home. Its merchandise strategies include Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home.

WSM is the only company from the retail-home furnishings industry on today's Zacks #1 Rank List.

Earnings Estimates for Williams-Sonoma

Williams-Sonoma goes into its quarterly report with a Zacks Consensus Estimate of 81 cents for the fiscal year ended January 2010. There has been no change in the past month, but that guidance is up 42% from 2 months ago.

Meanwhile, the Zacks Consensus Estimate for the fiscal year ending January 2011 is $1.02 per share, marking an advance of 26% in 2 months. This outlook also suggests year-over-year profit growth of 26%.

What Sparked the Estimates?

In January, Williams-Sonoma announced a solid holiday season with net revenues rising 7.4% year over year for the 8-week period. Same-store sales were up 6.5%.

The company subsequently decided to raise its non-GAAP earnings per share estimate to between 69 cents and 74 cents, compared to the Zacks Consensus Estimate of 50 cents at the time. The guidance has since advanced by 46% to its current level of 73 cents.

Sales are now expected between $1.06 billion and $1.08 billion.

For the full fiscal year (2009), Williams-Sonoma raised its non-GAAP profit estimate to between 76 cents and 81 cents, compared to the Zacks Consensus Estimate of 57 cents at the time.

Nice Record of Surprises

Williams-Sonoma usually has a pretty good time when it comes to reporting its earnings. The company has beaten the Zacks Consensus Estimate for 5 straight quarters, including 2 times by double digits.

Over the last 4 quarters, it has beaten by 220%, 155.56%, 33.33% and 93.75%.

In its fiscal third quarter, the company reported earnings per share of 16 cents, compared to the guidance of 5 cents. WSM raised its full-year outlook at that time as well.

Read the full analyst report on WSM