Shares of Williams-Sonoma Inc. (WSM - Free Report) were down 8.5% in after-hours trading on Nov 16, after the company reported in-line results for the third quarter of fiscal 2017.
Adjusted earnings of 84 cents per share were in line with the Zacks Consensus Estimate. The figure also increased 7.7% from the year-ago level.
Net revenues of $1,299 million were slightly higher than the Zacks Consensus Estimate of $1,293 million and up 4.3% year over year. However, net revenues reflect an estimated $7.0 million impact of lost sales associated with the hurricanes in Texas, Florida and Puerto Rico.
Comparable Brand Revenues
Comparable brand revenues increased 3.3% in the quarter, compared with a 2.8% increase in the preceding quarter and 0.4% decline in the year-ago quarter.
The company’s namesake brand’s comparable brand revenues were up 2.3%, better than 0.1% growth in the prior-year quarter. West Elm’s comparable brand revenues increased 11.5% compared with the 12% rise in the prior-year quarter.
Pottery Barn’s comparable brand revenues were down 0.3% as compared with a 4.6% decline in the prior-year quarter. Pottery Barn Kids’ comparable brand revenues increased 0.1% as against 1% decline in the year-ago quarter. PBteen’s comparable brand revenues registered 3% growth against a 10.9% plunge in the year-ago quarter.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Segment Details
e-commerce: The segment reported net revenues of $690 million in the quarter, up 6.4% year over year. The upside was driven by West Elm brand, Williams-Sonoma brand, the company’s newer businesses Rejuvenation and Mark and Graham along with its international operations.
Retail: The segment reported net revenues of $609 million in the reported quarter, up 2.1% year over year, primarily driven by West Elm and Pottery Barn. The upside was driven by the company’s various retail initiatives, including in-home design services and store remodels.
Operating Highlights
Operating margin was 8.5% in the quarter, down 40 basis points (bps) from the year-ago quarter.
Gross margin was 35.9% down 90 bps from the year-ago figure.
Selling, general and administrative (SG&A) expenses were 27.4% of net revenues or $356 million in the quarter, reflecting a decrease of 60 bps year over year.
Merchandise inventories at the end of the quarter increased 10.6% to $1.18 billion from $1.06 billion in the prior-year quarter.
Another Update
Williams-Sonoma recently entered into a definitive agreement to acquire Outward, Inc. — a leading 3-D imaging and augmented reality platform for the home furnishings and decor industry. The deal is valued at $112 million and is expected to close by the end of this year.
The buyout is expected to enhance and extend Williams-Sonoma’s customer service platform and help develop technologies that will transform the shopping experience for home furnishing buyers.
Financials
Williams-Sonoma has cash and cash equivalents of $90.8 million as of Oct 29, 2017, compared with $75.4 million as of Oct 30, 2016.
During the quarter under review, the company repurchased 1.3 million shares of common stock at an average cost of $46.84 a share and a total cost of approximately $61 million. William-Sonoma has approximately $256 million remaining under its present stock repurchase authorization, as of Oct 29, 2017.
Fourth-Quarter Guidance
Williams-Sonoma expects fourth-quarter fiscal 2017 earnings per share in the band of $1.49 to $1.64.
The company expects net revenues in the band of $1,610 million to $1,675 million. Comparable brand revenues are likely to grow 2-6%.
Fiscal 2017 Guidance
The company raised its revenue guidance for fiscal 2017. It now expects revenues in the $5,225-$5,290 million range ($5,165-$5,265 million).
Williams-Sonoma expects earnings in the range of $3.45 to $3.60 per share ($3.45-$3.65 earlier).
Comparable brand revenues are likely to grow in the 2% to 4% range (1-3% expected earlier).
Operating margin is anticipated in the 9% to 9.2% range and tax rate between 35% and 36%.
Capital expenditures are projected in the $200-$220 million range for the year.
Zacks Rank & Stocks to Consider
Williams-Sonoma carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the Retail-Wholesale sector are Alibaba Group Holding Limited (BABA - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Beacon Roofing Supply, Inc. (BECN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alibaba’s earnings are expected to increase 52.8% in fiscal 2018.
Cracker Barrel Old Country Store has a solid EPS surprise history, surpassing earnings estimates in each of the trailing four quarters, the average beat being 4.9%.
Beacon Roofing’s earnings are expected to increase 224% in fiscal 2018.
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Shares of Williams-Sonoma Inc. (WSM - Free Report) were down 8.5% in after-hours trading on Nov 16, after the company reported in-line results for the third quarter of fiscal 2017.
Adjusted earnings of 84 cents per share were in line with the Zacks Consensus Estimate. The figure also increased 7.7% from the year-ago level.
Net revenues of $1,299 million were slightly higher than the Zacks Consensus Estimate of $1,293 million and up 4.3% year over year. However, net revenues reflect an estimated $7.0 million impact of lost sales associated with the hurricanes in Texas, Florida and Puerto Rico.
Comparable Brand Revenues
Comparable brand revenues increased 3.3% in the quarter, compared with a 2.8% increase in the preceding quarter and 0.4% decline in the year-ago quarter.
The company’s namesake brand’s comparable brand revenues were up 2.3%, better than 0.1% growth in the prior-year quarter. West Elm’s comparable brand revenues increased 11.5% compared with the 12% rise in the prior-year quarter.
Pottery Barn’s comparable brand revenues were down 0.3% as compared with a 4.6% decline in the prior-year quarter. Pottery Barn Kids’ comparable brand revenues increased 0.1% as against 1% decline in the year-ago quarter. PBteen’s comparable brand revenues registered 3% growth against a 10.9% plunge in the year-ago quarter.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Segment Details
e-commerce: The segment reported net revenues of $690 million in the quarter, up 6.4% year over year. The upside was driven by West Elm brand, Williams-Sonoma brand, the company’s newer businesses Rejuvenation and Mark and Graham along with its international operations.
Retail: The segment reported net revenues of $609 million in the reported quarter, up 2.1% year over year, primarily driven by West Elm and Pottery Barn. The upside was driven by the company’s various retail initiatives, including in-home design services and store remodels.
Operating Highlights
Operating margin was 8.5% in the quarter, down 40 basis points (bps) from the year-ago quarter.
Gross margin was 35.9% down 90 bps from the year-ago figure.
Selling, general and administrative (SG&A) expenses were 27.4% of net revenues or $356 million in the quarter, reflecting a decrease of 60 bps year over year.
Merchandise inventories at the end of the quarter increased 10.6% to $1.18 billion from $1.06 billion in the prior-year quarter.
Another Update
Williams-Sonoma recently entered into a definitive agreement to acquire Outward, Inc. — a leading 3-D imaging and augmented reality platform for the home furnishings and decor industry. The deal is valued at $112 million and is expected to close by the end of this year.
The buyout is expected to enhance and extend Williams-Sonoma’s customer service platform and help develop technologies that will transform the shopping experience for home furnishing buyers.
Financials
Williams-Sonoma has cash and cash equivalents of $90.8 million as of Oct 29, 2017, compared with $75.4 million as of Oct 30, 2016.
During the quarter under review, the company repurchased 1.3 million shares of common stock at an average cost of $46.84 a share and a total cost of approximately $61 million. William-Sonoma has approximately $256 million remaining under its present stock repurchase authorization, as of Oct 29, 2017.
Fourth-Quarter Guidance
Williams-Sonoma expects fourth-quarter fiscal 2017 earnings per share in the band of $1.49 to $1.64.
The company expects net revenues in the band of $1,610 million to $1,675 million. Comparable brand revenues are likely to grow 2-6%.
Fiscal 2017 Guidance
The company raised its revenue guidance for fiscal 2017. It now expects revenues in the $5,225-$5,290 million range ($5,165-$5,265 million).
Williams-Sonoma expects earnings in the range of $3.45 to $3.60 per share ($3.45-$3.65 earlier).
Comparable brand revenues are likely to grow in the 2% to 4% range (1-3% expected earlier).
Operating margin is anticipated in the 9% to 9.2% range and tax rate between 35% and 36%.
Capital expenditures are projected in the $200-$220 million range for the year.
Zacks Rank & Stocks to Consider
Williams-Sonoma carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the Retail-Wholesale sector are Alibaba Group Holding Limited (BABA - Free Report) , Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) and Beacon Roofing Supply, Inc. (BECN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alibaba’s earnings are expected to increase 52.8% in fiscal 2018.
Cracker Barrel Old Country Store has a solid EPS surprise history, surpassing earnings estimates in each of the trailing four quarters, the average beat being 4.9%.
Beacon Roofing’s earnings are expected to increase 224% in fiscal 2018.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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