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Williams-Sonoma (WSM) Up 9.6% on Q1 Earnings & Revenue Beat
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Williams-Sonoma Inc. (WSM - Free Report) reported impressive earnings for first-quarter fiscal 2022 (ended May 1, 2022). The company’s earnings and revenues beat the Zacks Consensus Estimate and improved on a year-over-year basis, courtesy of strength across all brands along with accelerated e-commerce growth.
Defying supply chain woes, material and labor shortages, and capacity limitations, revenues improved from the year-ago period on strong demand. Shares of this leading home furnishing retailer jumped 9.6% in the after-hours trading session on May 25.
Laura Alber, president and CEO of Williams-Sonoma, said, “As we look to the balance of the year, we remain confident and committed to our guidance of mid-to-high single digit comps with operating margins relatively aligned to fiscal 2021. We have a solid line-up of growth initiatives and operational improvements planned for the balance of the year. And, as we look further, we are confident in our path to be a $10 billion company by 2024.”
Earnings & Revenues
Non-GAAP earnings of $3.50 per share surpassed the Zacks Consensus Estimate of $2.99 by 17.1%. The figure also increased 19.5% from $2.93 per share reported a year ago.
Revenues of $1.89 billion beat the consensus mark of $1.83 billion by 3.3% and grew 8.1% year over year. The impressive revenues were driven by strong growth across all brands.
Comps increased 9.5% compared with 40.4% growth in the year-ago period. Comps in the Pottery Barn brand grew 14.6% compared with 41.3% growth in the prior-year quarter. Comps at West Elm increased 12.8% compared with 50.9% growth registered in the prior-year quarter. Williams-Sonoma brand’s comps declined 2.2% compared with 35.3% growth in the year-ago quarter. Pottery Barn Kids and Teen’s comps declined 3.1% versus 27.6% growth in the year-ago quarter.
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
The gross margin was 43.8%, up 80 basis points (bps) from the year-ago period. The upside was primarily caused by higher merchandise margins and occupancy leverage in the quarter.
Non-GAAP selling, general and administrative expenses were 26.7% of net revenues compared with 27.1% in the year-ago quarter, reflecting a decrease of 40 bps. Furthermore, the non-GAAP operating margin expanded 120 bps from the year-ago period to 17.1% for the quarter.
Financials
As of May 1, 2022, Williams-Sonoma reported cash and cash equivalents of $324.8 million compared with $850.3 million at fiscal 2021-end. Net cash provided by operating activities totaled $184.5 million compared with $238.9 million in the year-ago quarter.
Williams-Sonoma rewarded shareholders in the form of dividends ($58 million) and share repurchases (more than $500 million) during the quarter.
Fiscal 2022 Guidance
The company remains optimistic about business strength and continued success of new initiatives and competitive advantages that are rooted in key differentiators like in-house design, digital-first channel strategy, and values.
WSM expects fiscal 2022 net revenues to grow in mid-to-high single digits. It also expects operating margin to be relatively in line with fiscal 2021.
Further, WSM projects revenue acceleration of $10 billion over the long term (by fiscal 2024).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are MarineMax, Inc. (HZO - Free Report) , BBQ Holdings, Inc. and Cracker Barrel Old Country Store (CBRL - Free Report) .
MarineMax sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 32.8%, on average. Shares of the company have declined 24% in the past year.
The Zacks Consensus Estimate for MarineMax’s 2022 sales and earnings per share (EPS) suggests growth of 21.8% and 16%, respectively, from the year-ago period.
BBQ Holdings carries a Zacks Rank #2 (Buy). BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have decreased 15.8% in the past year.
The Zacks Consensus Estimate for BBQ Holdings’ 2022 sales and EPS suggests growth of 46.1% and 67.6%, respectively, from the year-ago period’s levels.
Cracker Barrel carries a Zacks Rank #2. Cracker Barrel has a long-term earnings growth of 9.4%. Shares of the company have risen 22.3% in the past year.
The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 17.3% and 33.5%, respectively, from the year-ago period’s levels.
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Williams-Sonoma (WSM) Up 9.6% on Q1 Earnings & Revenue Beat
Williams-Sonoma Inc. (WSM - Free Report) reported impressive earnings for first-quarter fiscal 2022 (ended May 1, 2022). The company’s earnings and revenues beat the Zacks Consensus Estimate and improved on a year-over-year basis, courtesy of strength across all brands along with accelerated e-commerce growth.
Defying supply chain woes, material and labor shortages, and capacity limitations, revenues improved from the year-ago period on strong demand. Shares of this leading home furnishing retailer jumped 9.6% in the after-hours trading session on May 25.
Laura Alber, president and CEO of Williams-Sonoma, said, “As we look to the balance of the year, we remain confident and committed to our guidance of mid-to-high single digit comps with operating margins relatively aligned to fiscal 2021. We have a solid line-up of growth initiatives and operational improvements planned for the balance of the year. And, as we look further, we are confident in our path to be a $10 billion company by 2024.”
Earnings & Revenues
Non-GAAP earnings of $3.50 per share surpassed the Zacks Consensus Estimate of $2.99 by 17.1%. The figure also increased 19.5% from $2.93 per share reported a year ago.
Revenues of $1.89 billion beat the consensus mark of $1.83 billion by 3.3% and grew 8.1% year over year. The impressive revenues were driven by strong growth across all brands.
Comps increased 9.5% compared with 40.4% growth in the year-ago period. Comps in the Pottery Barn brand grew 14.6% compared with 41.3% growth in the prior-year quarter. Comps at West Elm increased 12.8% compared with 50.9% growth registered in the prior-year quarter. Williams-Sonoma brand’s comps declined 2.2% compared with 35.3% growth in the year-ago quarter. Pottery Barn Kids and Teen’s comps declined 3.1% versus 27.6% growth in the year-ago quarter.
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
WilliamsSonoma, Inc. price-consensus-eps-surprise-chart | WilliamsSonoma, Inc. Quote
Operating Highlights
The gross margin was 43.8%, up 80 basis points (bps) from the year-ago period. The upside was primarily caused by higher merchandise margins and occupancy leverage in the quarter.
Non-GAAP selling, general and administrative expenses were 26.7% of net revenues compared with 27.1% in the year-ago quarter, reflecting a decrease of 40 bps. Furthermore, the non-GAAP operating margin expanded 120 bps from the year-ago period to 17.1% for the quarter.
Financials
As of May 1, 2022, Williams-Sonoma reported cash and cash equivalents of $324.8 million compared with $850.3 million at fiscal 2021-end. Net cash provided by operating activities totaled $184.5 million compared with $238.9 million in the year-ago quarter.
Williams-Sonoma rewarded shareholders in the form of dividends ($58 million) and share repurchases (more than $500 million) during the quarter.
Fiscal 2022 Guidance
The company remains optimistic about business strength and continued success of new initiatives and competitive advantages that are rooted in key differentiators like in-house design, digital-first channel strategy, and values.
WSM expects fiscal 2022 net revenues to grow in mid-to-high single digits. It also expects operating margin to be relatively in line with fiscal 2021.
Further, WSM projects revenue acceleration of $10 billion over the long term (by fiscal 2024).
Zacks Rank
Williams-Sonoma currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Retail-Wholesale Stocks Hogging the Limelight
Some better-ranked stocks in the Zacks Retail-Wholesale sector are MarineMax, Inc. (HZO - Free Report) , BBQ Holdings, Inc. and Cracker Barrel Old Country Store (CBRL - Free Report) .
MarineMax sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 32.8%, on average. Shares of the company have declined 24% in the past year.
The Zacks Consensus Estimate for MarineMax’s 2022 sales and earnings per share (EPS) suggests growth of 21.8% and 16%, respectively, from the year-ago period.
BBQ Holdings carries a Zacks Rank #2 (Buy). BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have decreased 15.8% in the past year.
The Zacks Consensus Estimate for BBQ Holdings’ 2022 sales and EPS suggests growth of 46.1% and 67.6%, respectively, from the year-ago period’s levels.
Cracker Barrel carries a Zacks Rank #2. Cracker Barrel has a long-term earnings growth of 9.4%. Shares of the company have risen 22.3% in the past year.
The Zacks Consensus Estimate for Cracker Barrel’s 2022 sales and EPS suggests growth of 17.3% and 33.5%, respectively, from the year-ago period’s levels.