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On Mar 29, we issued an updated research report on Williams-Sonoma, Inc. (WSM - Free Report) -- a multi-channel specialty retailer of premium quality home products.
Recently, the company announced fourth-quarter fiscal 2016 adjusted earnings which beat the Zacks Consensus Estimate by 3.3%, while revenues missed the same by 1.7%. Comparable brand revenues for the company decreased 0.9% in the quarter.
Notably, Williams-Sonoma’s shares outperformed the Zacks categorized Retail-Home Furnishings industry on a year-to-date basis. The company registered 3.1% growth compared to 11.3% decline of the Retail-Home Furnishings industry.
Going forward, a strong brand portfolio along with focus on innovation and transformation should drive the stock’s performance. However, comparable brand revenues have been sluggish for several quarters now. Also, continued E-commerce and supply chain investments weigh on operating margins.
Innovation Drives Growth
Williams-Sonoma is one of the largest E-commerce retailers in the U.S. The company’s direct to customer segment operates through E-commerce websites and direct mail catalogs. The segment contributed 52% to revenues in fiscal 2016. In fiscal 2017, the company plans to continue to strengthen its competitive position through innovation in E-commerce.
Product innovation plays a huge role in the company’s success. There is consistent demand for new products, which should match the changing preference of consumers. Williams-Sonoma addresses this demand quite competently.
Williams-Sonoma is focused on enhancing customer experience through improved and innovative marketing techniques. The company will continue to find innovative marketing strategies to identify and target custom audiences and deliver more relevant messaging across all of its communication channels including email, mobile, social platforms, direct mail and on website.
Comparable Brand Revenues a Drag
Williams-Sonoma has been reporting soft comparable brand revenues for quite some time. The rate of increase of comparable brand revenues has decreased significantly from 8.8% in 2013 and 7.1% in 2014 to 3.7% in 2015 and 0.7% in 2016. The rate of comparable brand revenue increase has contracted across all the brands over the years.
Also, the specialty e-commerce and retail businesses are highly competitive. Williams-Sonoma competes with other retailers that market lines of merchandise similar to it. The company also competes with national, regional and local businesses that utilize a similar retail store strategy, and also with traditional furniture stores, department and specialty stores. Increased competition could reduce Williams-Sonoma’s sales and dent its operating results and business.
Zacks Rank & Stocks to Consider
Williams-Sonoma carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Retail-Wholesale sector include Bravo Brio Restaurant Group, Inc. , Diversified Restaurant Holdings, Inc. and Papa John's International Inc. (PZZA - Free Report) .
Bravo Brio is likely to see a 50.9% rise in full-year 2017 earnings while Diversified Restaurant’s 2017 earnings estimates moved 100% north over the last 60 days.
Papa John's – a Zacks Rank #2 (Buy) stock – is expected to witness a 10.2% increase in full-year 2017 earnings.
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 >>
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Williams-Sonoma: E-commerce Solid, Comparable Revenues Weak
On Mar 29, we issued an updated research report on Williams-Sonoma, Inc. (WSM - Free Report) -- a multi-channel specialty retailer of premium quality home products.
Recently, the company announced fourth-quarter fiscal 2016 adjusted earnings which beat the Zacks Consensus Estimate by 3.3%, while revenues missed the same by 1.7%. Comparable brand revenues for the company decreased 0.9% in the quarter.
Notably, Williams-Sonoma’s shares outperformed the Zacks categorized Retail-Home Furnishings industry on a year-to-date basis. The company registered 3.1% growth compared to 11.3% decline of the Retail-Home Furnishings industry.
Going forward, a strong brand portfolio along with focus on innovation and transformation should drive the stock’s performance. However, comparable brand revenues have been sluggish for several quarters now. Also, continued E-commerce and supply chain investments weigh on operating margins.
Innovation Drives Growth
Williams-Sonoma is one of the largest E-commerce retailers in the U.S. The company’s direct to customer segment operates through E-commerce websites and direct mail catalogs. The segment contributed 52% to revenues in fiscal 2016. In fiscal 2017, the company plans to continue to strengthen its competitive position through innovation in E-commerce.
Product innovation plays a huge role in the company’s success. There is consistent demand for new products, which should match the changing preference of consumers. Williams-Sonoma addresses this demand quite competently.
Williams-Sonoma is focused on enhancing customer experience through improved and innovative marketing techniques. The company will continue to find innovative marketing strategies to identify and target custom audiences and deliver more relevant messaging across all of its communication channels including email, mobile, social platforms, direct mail and on website.
Comparable Brand Revenues a Drag
Williams-Sonoma has been reporting soft comparable brand revenues for quite some time. The rate of increase of comparable brand revenues has decreased significantly from 8.8% in 2013 and 7.1% in 2014 to 3.7% in 2015 and 0.7% in 2016. The rate of comparable brand revenue increase has contracted across all the brands over the years.
Also, the specialty e-commerce and retail businesses are highly competitive. Williams-Sonoma competes with other retailers that market lines of merchandise similar to it. The company also competes with national, regional and local businesses that utilize a similar retail store strategy, and also with traditional furniture stores, department and specialty stores. Increased competition could reduce Williams-Sonoma’s sales and dent its operating results and business.
Zacks Rank & Stocks to Consider
Williams-Sonoma carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the Retail-Wholesale sector include Bravo Brio Restaurant Group, Inc. , Diversified Restaurant Holdings, Inc. and Papa John's International Inc. (PZZA - Free Report) .
Bravo Brio and Diversified Restaurant sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bravo Brio is likely to see a 50.9% rise in full-year 2017 earnings while Diversified Restaurant’s 2017 earnings estimates moved 100% north over the last 60 days.
Papa John's – a Zacks Rank #2 (Buy) stock – is expected to witness a 10.2% increase in full-year 2017 earnings.
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 >>