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E-commerce Channel, Marketing Moves Aid Williams-Sonoma (WSM)
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Williams-Sonoma, Inc. (WSM - Free Report) has been witnessing strong demand recently, thanks to a resilient housing market, intense focus on the e-commerce platform along with marketing and digitalization moves. Also, product innovation, transformation of the retail fleet and a solid liquidity position are helping this multi-channel specialty retailer to increase its investors’ value.
So far this year, shares of WSM have outperformed the Zacks Retail - Home Furnishings industry. Impressive, the company has outpaced other industry players like RH (RH - Free Report) , Tempur Sealy International, Inc. (TPX - Free Report) and The Lovesac Company (LOVE - Free Report) in the same time frame. The price performance was backed by a solid earnings surprise history, having surpassed the Zacks Consensus Estimate in the trailing 17 quarters. Earnings estimates for fiscal 2022 have moved 8.4% upward over the past 30 days.
Although the company noted that it has been witnessing short-term and long-term delays owing to supply issues across the world, macro-economic trends are encouraging.
E-commerce Platform Driving Growth: Williams-Sonoma has a history of driving market share gains, supported by strong e-commerce websites, direct mail catalogs and retail stores along with shipping fees received for the delivery of merchandise. The company is generating strong revenues from the e-commerce channel, as it focuses on re-platforming mobile sites to progressive web app technology, streamlining the checkout process, and implementing the next generation of machine learning, on-site search as well as personalization experience.
The company’s return on invested capital was 57.9% for fiscal 2021 compared with 22.4% last year. Furthermore, WSM now projects revenue acceleration to $10 billion over the long term (by fiscal 2024). It remains on track to invest nearly $350 million in the business in fiscal 2022.
Product Innovation, Marketing & Digitalization: Williams-Sonoma is a highly customer-centric company and focuses on enhancing customer experience through technological innovation as well as operational improvement. Also, continuous technological and new product innovation helps it enhance customer engagement.
The company’s initiatives in e-commerce and real estate optimization strategies have been driving its channel mix shift. Williams-Sonoma had been acquiring new customers in digital channels throughout fiscal 2021. The digital-first channel strategy will drive profitable market share gains, thereby accelerating its path to $10 billion of revenues and operating margin expansion by fiscal 2024.
It has also been reworking the marketing strategy, placing more emphasis on digital targeted marketing and investing in store remodeling. In digital advertising, the company is transitioning from catalog mailing to higher-impact digital channels to drive short-term return on investment, long-term gains and customer growth. Higher digital marketing is driving incremental customer count. Its newest division, Williams-Sonoma Inc. Business-to-Business, made significant progress.
Enhancing Stockholders Value: Williams-Sonoma has a strong liquidity to navigate through the current environment that is impacted by the COVID-19 outbreak. The company ended fiscal 2021 with a solid liquidity, including $850.3 million of cash and cash equivalents and an operating cash flow of more than $1.37 billion, with no debt. This enabled Williams-Sonoma to announce an additional quarterly dividend increase of 10%. Also, its board of directors approved a new $1.5-billion stock repurchase authorization.
The company’s return on equity currently stands at 73.4%. This compares favorably with the industry’s 30.7%.
A Brief Overview of the Above-Mentioned Stocks
RH’s expected earnings growth rate for fiscal 2022 is 2.8%. The Zacks Consensus Estimate for fiscal 2022 earnings has improved 0.5% over the past seven days.
The company surpassed earnings estimates in each of the trailing four quarters, with an average of 14.2%. RH shares have lost 34.4% in the year-to-date period.
Tempur Sealy’s earnings topped analysts’ expectations in three of the last four quarters, with a surprise of 13.1%, on average.
TPX’s earnings estimates have been stable for 2021 and 2022 in the past 60 days. TPX’s shares have lost 36.8% in the year-to-date period.
The Lovesac’s earnings surprise in the last four quarters was 245.9%, on average.
In the past 60 days, Lovesac’s earnings estimates have remained stable for fiscal 2023 (ending January 2023). LOVE’s shares have lost 33.2% in the year-to-date period.
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E-commerce Channel, Marketing Moves Aid Williams-Sonoma (WSM)
Williams-Sonoma, Inc. (WSM - Free Report) has been witnessing strong demand recently, thanks to a resilient housing market, intense focus on the e-commerce platform along with marketing and digitalization moves. Also, product innovation, transformation of the retail fleet and a solid liquidity position are helping this multi-channel specialty retailer to increase its investors’ value.
So far this year, shares of WSM have outperformed the Zacks Retail - Home Furnishings industry. Impressive, the company has outpaced other industry players like RH (RH - Free Report) , Tempur Sealy International, Inc. (TPX - Free Report) and The Lovesac Company (LOVE - Free Report) in the same time frame. The price performance was backed by a solid earnings surprise history, having surpassed the Zacks Consensus Estimate in the trailing 17 quarters. Earnings estimates for fiscal 2022 have moved 8.4% upward over the past 30 days.
Although the company noted that it has been witnessing short-term and long-term delays owing to supply issues across the world, macro-economic trends are encouraging.
Image Source: Zacks Investment Research
Let’s delve deeper into the factors solidifying its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
E-commerce Platform Driving Growth: Williams-Sonoma has a history of driving market share gains, supported by strong e-commerce websites, direct mail catalogs and retail stores along with shipping fees received for the delivery of merchandise. The company is generating strong revenues from the e-commerce channel, as it focuses on re-platforming mobile sites to progressive web app technology, streamlining the checkout process, and implementing the next generation of machine learning, on-site search as well as personalization experience.
The company’s return on invested capital was 57.9% for fiscal 2021 compared with 22.4% last year. Furthermore, WSM now projects revenue acceleration to $10 billion over the long term (by fiscal 2024). It remains on track to invest nearly $350 million in the business in fiscal 2022.
Product Innovation, Marketing & Digitalization: Williams-Sonoma is a highly customer-centric company and focuses on enhancing customer experience through technological innovation as well as operational improvement. Also, continuous technological and new product innovation helps it enhance customer engagement.
The company’s initiatives in e-commerce and real estate optimization strategies have been driving its channel mix shift. Williams-Sonoma had been acquiring new customers in digital channels throughout fiscal 2021. The digital-first channel strategy will drive profitable market share gains, thereby accelerating its path to $10 billion of revenues and operating margin expansion by fiscal 2024.
It has also been reworking the marketing strategy, placing more emphasis on digital targeted marketing and investing in store remodeling. In digital advertising, the company is transitioning from catalog mailing to higher-impact digital channels to drive short-term return on investment, long-term gains and customer growth. Higher digital marketing is driving incremental customer count. Its newest division, Williams-Sonoma Inc. Business-to-Business, made significant progress.
Enhancing Stockholders Value: Williams-Sonoma has a strong liquidity to navigate through the current environment that is impacted by the COVID-19 outbreak. The company ended fiscal 2021 with a solid liquidity, including $850.3 million of cash and cash equivalents and an operating cash flow of more than $1.37 billion, with no debt. This enabled Williams-Sonoma to announce an additional quarterly dividend increase of 10%. Also, its board of directors approved a new $1.5-billion stock repurchase authorization.
The company’s return on equity currently stands at 73.4%. This compares favorably with the industry’s 30.7%.
A Brief Overview of the Above-Mentioned Stocks
RH’s expected earnings growth rate for fiscal 2022 is 2.8%. The Zacks Consensus Estimate for fiscal 2022 earnings has improved 0.5% over the past seven days.
The company surpassed earnings estimates in each of the trailing four quarters, with an average of 14.2%. RH shares have lost 34.4% in the year-to-date period.
Tempur Sealy’s earnings topped analysts’ expectations in three of the last four quarters, with a surprise of 13.1%, on average.
TPX’s earnings estimates have been stable for 2021 and 2022 in the past 60 days. TPX’s shares have lost 36.8% in the year-to-date period.
The Lovesac’s earnings surprise in the last four quarters was 245.9%, on average.
In the past 60 days, Lovesac’s earnings estimates have remained stable for fiscal 2023 (ending January 2023). LOVE’s shares have lost 33.2% in the year-to-date period.