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Williams-Sonoma (WSM) Tops Q4 Earnings, Hikes Dividend by 5%
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Williams-Sonoma Inc. (WSM - Free Report) reported an earnings beat in fourth-quarter fiscal 2016 results and its board of directors authorized a 5% quarterly dividend increase. Shares of Williams Sonoma rose 3.4% in the after-hours trading session on Mar 15, following the release and ended the regular session with a 1.3% gain.
The company’s fourth-quarter fiscal 2016 adjusted earnings (after adjusting for pre-tax gains) of $1.55 per share beat the Zacks Consensus Estimate of $1.50 by 3.3%. Earnings were, however, on par with the year-ago profit level.
Net revenue of $1.58 billion missed the Zacks Consensus Estimate of $1.61 billion by 1.7%. Net sales also decreased 0.3% year over year due to weakness in the Pottery Barn brands that offset the revenue growth at West Elm, its newer businesses Rejuvenation and Mark and Graham and international company owned businesses.
Comparable Brand Revenues
Comparable brand revenues decreased 0.9% in the quarter, significantly lower than the 4% decrease recorded in the prior quarter and 0.8% growth a year ago. All the brands, except West Elm and Willian Sonoma, reported soft comparable brand revenues.
Williams-Sonoma’s comparable brand revenues were up 1.4%, higher than 0.9% growth in the prior-year quarter.
West Elm’s comparable brand revenues increased 6.5% compared with the 12.8% rise in the prior-year quarter.
Pottery Barn’s comparable brand revenues were down 4.1% against a 2% decrease in the prior-year quarter, which management believes is due to the challenging retail environment.
Pottery Barn Kids’ comparable brand revenues decreased 4.9%, compared to 0.1% growth in the year-ago quarter.
PBteen’s comparable brand revenues decreased 8.1% compared with 12.2% decline in the year-ago quarter.
Segment Details
E-commerce (51.1% of total quarterly revenues): The segment reported net revenue of $809 million in fourth-quarter 2016, up 2.2% year over year.
Retail: The segment reported net revenue of $773 million in the reported quarter, down 2.7% year over year.
Margin Details
Operating margin was 13.6% in the quarter, down 40 basis points from the year-ago quarter.
As a result percentage of revenues, adjusted selling, general and administrative (SG&A) expenses were 25.7% or $406 million in the quarter. This represents 140 bps increase or 5.5% year over year.
Fiscal 2016 Highlights
Full-year adjusted EPS came in at $3.43, up from $3.37 a year ago and came above the analysts’ expectation of $3.39 a share.
Total revenue of $5.084 billion increased 2.2% year over year but missed the Zacks Consensus Estimate of $5.11 billion by 0.5%.
Comparable brand revenue grew 0.7% compared with 3.7% growth in the prior year.
Financials
Williams-Sonoma has cash and cash equivalents of $213.7 million as of Jan 29, 2017 compared with $193.6 million as of Jan 31, 2016.
Cash returned to stockholders totaled $69 million in the quarter, comprising $36 million of stock repurchases and $33 million of dividends. In full fiscal 2016, the company returned $ 285 million to stockholders that include $151 million in stock repurchases and $134 million in dividends.
Q1 Guidance
Williams-Sonoma expects first-quarter fiscal 2017 earnings per share in the band of 45 cents to 50 cents.
The company expects net revenue for the quarter in the range of $1.085 billion to $1.120 billion. Comparable brand revenues are expected to vary from down 1% to up 2%.
2017 Guidance
Williams-Sonoma expects earnings in the range of $3.45–$3.65 per share.
Net revenue is projected in the range $5.165–$5.265 billion.
Comparable brand revenues are likely to grow in the 1–3% range. The company expects operating margin in the range of 9.4–9.6%. Income tax rate is projected between 36.5% and 37.5%.
RH (RH - Free Report) (formerly Restoration Hardware) reported preliminary fourth-quarter adjusted earnings per share of 68 cents. The preliminary adjusted earnings figure beat the Zacks Consensus Estimate of 65 cents by 4.6%.
At Home Group Inc. is slated to release its quarterly earnings on Mar 28, 2017.
Upcoming Release
Pier 1 Imports, Inc. is likely to report its quarterly numbers on Apr 12.
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Williams-Sonoma (WSM) Tops Q4 Earnings, Hikes Dividend by 5%
Williams-Sonoma Inc. (WSM - Free Report) reported an earnings beat in fourth-quarter fiscal 2016 results and its board of directors authorized a 5% quarterly dividend increase. Shares of Williams Sonoma rose 3.4% in the after-hours trading session on Mar 15, following the release and ended the regular session with a 1.3% gain.
The company’s fourth-quarter fiscal 2016 adjusted earnings (after adjusting for pre-tax gains) of $1.55 per share beat the Zacks Consensus Estimate of $1.50 by 3.3%. Earnings were, however, on par with the year-ago profit level.
Net revenue of $1.58 billion missed the Zacks Consensus Estimate of $1.61 billion by 1.7%. Net sales also decreased 0.3% year over year due to weakness in the Pottery Barn brands that offset the revenue growth at West Elm, its newer businesses Rejuvenation and Mark and Graham and international company owned businesses.
Comparable Brand Revenues
Comparable brand revenues decreased 0.9% in the quarter, significantly lower than the 4% decrease recorded in the prior quarter and 0.8% growth a year ago. All the brands, except West Elm and Willian Sonoma, reported soft comparable brand revenues.
Williams-Sonoma’s comparable brand revenues were up 1.4%, higher than 0.9% growth in the prior-year quarter.
West Elm’s comparable brand revenues increased 6.5% compared with the 12.8% rise in the prior-year quarter.
Pottery Barn’s comparable brand revenues were down 4.1% against a 2% decrease in the prior-year quarter, which management believes is due to the challenging retail environment.
Pottery Barn Kids’ comparable brand revenues decreased 4.9%, compared to 0.1% growth in the year-ago quarter.
PBteen’s comparable brand revenues decreased 8.1% compared with 12.2% decline in the year-ago quarter.
Segment Details
E-commerce (51.1% of total quarterly revenues): The segment reported net revenue of $809 million in fourth-quarter 2016, up 2.2% year over year.
Retail: The segment reported net revenue of $773 million in the reported quarter, down 2.7% year over year.
Margin Details
Operating margin was 13.6% in the quarter, down 40 basis points from the year-ago quarter.
As a result percentage of revenues, adjusted selling, general and administrative (SG&A) expenses were 25.7% or $406 million in the quarter. This represents 140 bps increase or 5.5% year over year.
Fiscal 2016 Highlights
Full-year adjusted EPS came in at $3.43, up from $3.37 a year ago and came above the analysts’ expectation of $3.39 a share.
Total revenue of $5.084 billion increased 2.2% year over year but missed the Zacks Consensus Estimate of $5.11 billion by 0.5%.
Comparable brand revenue grew 0.7% compared with 3.7% growth in the prior year.
Financials
Williams-Sonoma has cash and cash equivalents of $213.7 million as of Jan 29, 2017 compared with $193.6 million as of Jan 31, 2016.
Cash returned to stockholders totaled $69 million in the quarter, comprising $36 million of stock repurchases and $33 million of dividends. In full fiscal 2016, the company returned $ 285 million to stockholders that include $151 million in stock repurchases and $134 million in dividends.
Q1 Guidance
Williams-Sonoma expects first-quarter fiscal 2017 earnings per share in the band of 45 cents to 50 cents.
The company expects net revenue for the quarter in the range of $1.085 billion to $1.120 billion. Comparable brand revenues are expected to vary from down 1% to up 2%.
2017 Guidance
Williams-Sonoma expects earnings in the range of $3.45–$3.65 per share.
Net revenue is projected in the range $5.165–$5.265 billion.
Comparable brand revenues are likely to grow in the 1–3% range. The company expects operating margin in the range of 9.4–9.6%. Income tax rate is projected between 36.5% and 37.5%.
Zack Rank
Williams-Sonoma carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise | Williams-Sonoma, Inc. Quote
Peer Releases
RH (RH - Free Report) (formerly Restoration Hardware) reported preliminary fourth-quarter adjusted earnings per share of 68 cents. The preliminary adjusted earnings figure beat the Zacks Consensus Estimate of 65 cents by 4.6%.
At Home Group Inc. is slated to release its quarterly earnings on Mar 28, 2017.
Upcoming Release
Pier 1 Imports, Inc. is likely to report its quarterly numbers on Apr 12.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>