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Williams-Sonoma (WSM) to Report Q3 Earnings: What's in Store?

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Williams-Sonoma, Inc. (WSM - Free Report) is scheduled to report third-quarter fiscal 2020 results on Nov 19, after the closing bell.

In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 81.8% and 4.5%, respectively. On a year-over-year basis, earnings and revenues of this multi-channel specialty retailer of premium quality home products improved 106.9% and 8.8%, respectively.

Markedly, Williams-Sonoma reported better-than-expected earnings in the last four quarters, with the average being 202.5%.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has increased 1.3% to $1.51 over the past seven days. The estimated figure indicates an increase of 48% from $1.02 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.55 billion, suggesting 7.6% growth from the year-ago reported figure of $1.44 billion.

WilliamsSonoma, Inc. Price and EPS Surprise

WilliamsSonoma, Inc. Price and EPS Surprise

WilliamsSonoma, Inc. price-eps-surprise | WilliamsSonoma, Inc. Quote

Factors to Note

Williams-Sonoma’s sales and earnings are expected to have increased in the fiscal third quarter, given strong housing market recovery and repair & remodeling activities. While the global impact of the coronavirus pandemic, stiff competition, tariffs and tough comparisons are expected to have been pressing concerns, a strong housing backdrop is anticipated to have benefited the company. Home furnishing demand has been strong and must have accelerated in the fiscal third quarter, given strong housing market data.

Again, its multi-channel multi-brand platform, strong e-commerce growth, solid execution of strategic initiatives, digital leadership, product innovation, retail transformation and operational excellence across businesses are expected to have provided some support to the top line. Also, cross-brand initiatives are likely to have positively contributed to consolidated comps to some extent.

Importantly, Williams-Sonoma’s online sales trends accelerated, which more than offset the lost sales from closed stores. This is expected to have meaningfully contributed to its top line in the to-be-reported quarter.

The Zacks Consensus Estimate for Pottery Barn Kids and Teen’s comps growth is pegged at 5.5%. The metric came in at 4% a year ago and 4.8% in the last reported quarter.

The Zacks Consensus Estimate for Pottery Barn’s comps growth is pegged at 10.2%, indicating growth from 3.4% a year ago. In the fiscal second quarter, comps grew 8.1% year over year.

The Zacks Consensus Estimate for West Elm’s comps growth is pegged at 12%. The metric was 14.1% a year ago and 7% in the last reported quarter.

The Zacks Consensus Estimate for Williams-Sonoma’s comps growth is pegged at 21.3%. Comps declined 2.1% in the prior year. In the fiscal second quarter, the namesake brand’s comps grew 29.4% year over year.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Williams-Sonoma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Williams-Sonoma — which shares space with RH (RH - Free Report) , At Home Group Inc. (HOME - Free Report) and Ethan Allen Interiors Inc. (ETH - Free Report) in the Zacks Retail - Home Furnishings industry — currently carries a Zacks Rank #3 and has an Earnings ESP of -5.32%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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