We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Williams-Sonoma (WSM) Down on Q3 Earnings Miss, Revenues Beat
Read MoreHide Full Article
Williams-Sonoma Inc. (WSM - Free Report) reported third-quarter fiscal 2022 (ended Oct 30, 2022), wherein quarterly earnings missed the Zacks Consensus Estimate but revenues beat the same. With this, the company’s bottom line beat the consensus mark in three of the last four consecutive quarters, while the top line surpassed for the third quarter.
Shares of this leading home furnishing retailer dropped 6.9% in the after-hours trading session on Nov 17. Although Williams-Sonoma reiterated its fiscal 2022 revenue guidance, it refrained from maintaining or updating guidance through fiscal 2024 owing to the macro uncertainty. This, along with earnings miss might have disappointed investors.
On a year-over-year basis, both earnings and revenues registered growth courtesy of the continuation of backlog order fulfillment, strong product margins and disciplined cost control amid a challenging environment.
Jeff Howie, chief financial officer of Williams-Sonoma, said, “Our bottom-line results demonstrate the power of our operating model to sustain merchandise margin and control SG&A expenses.”
Laura Alber, president and CEO of Williams-Sonoma, further added, “Although the macro backdrop has become more uncertain, we believe our strong positioning, growth initiatives, and culture of financial discipline will allow us to outperform in any environment.”
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
Non-GAAP earnings of $3.72 per share missed the Zacks Consensus Estimate of $3.78 by 1.6%. The figure also increased 12% from $3.32 per share reported a year ago.
Revenues of $2.19 billion surpassed the consensus mark by 1.6% and grew 7.1% year over year. The impressive revenues were driven by strong growth across Pottery Barn and West Elm brands.
The company’s total comps increased 8.1% compared with 16.9% growth in the year-ago period. Comps in the Pottery Barn brand grew 19.6% compared with 15.9% growth in the prior-year quarter. Comps at West Elm increased 4.2% compared with 22.5% growth registered in the prior-year quarter.
Pottery Barn Kids and Teen’s comps declined 4.8% versus 16.9% growth in the year-ago quarter. Williams-Sonoma brand’s comps declined 1.5% against the 7.6% growth in the year-ago quarter.
Operating Highlights
The gross margin was 41.5%, down 220 basis points (bps) from the year-ago period. The downside was primarily caused by higher shipping and freight costs. And, merchandise margin remains flat year over year with occupancy deleverage of 30 bps.
Non-GAAP selling, general and administrative expenses were 26% of net revenues compared with 27.5% in the year-ago quarter, reflecting a decrease of 150 bps. Furthermore, the non-GAAP operating margin contracted 80 bps from the year-ago period to 15.5% for the quarter.
Financials
As of Oct 30, 2022, Williams-Sonoma reported cash and cash equivalents of $113.1 million compared with $850.3 million at the fiscal 2021-end. Net cash provided by operating activities totaled $588.5 million during the first nine months of fiscal 2022, down $788.3 million in the year-ago quarter.
Williams-Sonoma rewarded shareholders in the form of dividends (more than $165.3 million) and share repurchases (more than $841 million) during the first nine months of fiscal 2022.
Fiscal 2022 Guidance
WSM reiterates that fiscal 2022 net revenues to grow in mid-to-high single digits. It also expects the operating margin to be relatively in line with fiscal 2021.
Given the macro uncertainty, WSM did not update its guidance through fiscal year 2024.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Wingstop Inc. (WING - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .
Wingstop sports a Zacks Rank #1. WING has a long-term earnings growth rate of 11%.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and Earnings Per Share (EPS) suggests growth of 18.1% and 16.4%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 18.6%, on average.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 8.6% and 11.7%, respectively, from the corresponding year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 4.1%, on average.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.1% and 31%, respectively, from the corresponding year-ago period’s levels.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Williams-Sonoma (WSM) Down on Q3 Earnings Miss, Revenues Beat
Williams-Sonoma Inc. (WSM - Free Report) reported third-quarter fiscal 2022 (ended Oct 30, 2022), wherein quarterly earnings missed the Zacks Consensus Estimate but revenues beat the same. With this, the company’s bottom line beat the consensus mark in three of the last four consecutive quarters, while the top line surpassed for the third quarter.
Shares of this leading home furnishing retailer dropped 6.9% in the after-hours trading session on Nov 17. Although Williams-Sonoma reiterated its fiscal 2022 revenue guidance, it refrained from maintaining or updating guidance through fiscal 2024 owing to the macro uncertainty. This, along with earnings miss might have disappointed investors.
On a year-over-year basis, both earnings and revenues registered growth courtesy of the continuation of backlog order fulfillment, strong product margins and disciplined cost control amid a challenging environment.
Jeff Howie, chief financial officer of Williams-Sonoma, said, “Our bottom-line results demonstrate the power of our operating model to sustain merchandise margin and control SG&A expenses.”
Laura Alber, president and CEO of Williams-Sonoma, further added, “Although the macro backdrop has become more uncertain, we believe our strong positioning, growth initiatives, and culture of financial discipline will allow us to outperform in any environment.”
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
WilliamsSonoma, Inc. price-consensus-eps-surprise-chart | WilliamsSonoma, Inc. Quote
Earnings & Revenues
Non-GAAP earnings of $3.72 per share missed the Zacks Consensus Estimate of $3.78 by 1.6%. The figure also increased 12% from $3.32 per share reported a year ago.
Revenues of $2.19 billion surpassed the consensus mark by 1.6% and grew 7.1% year over year. The impressive revenues were driven by strong growth across Pottery Barn and West Elm brands.
The company’s total comps increased 8.1% compared with 16.9% growth in the year-ago period. Comps in the Pottery Barn brand grew 19.6% compared with 15.9% growth in the prior-year quarter. Comps at West Elm increased 4.2% compared with 22.5% growth registered in the prior-year quarter.
Pottery Barn Kids and Teen’s comps declined 4.8% versus 16.9% growth in the year-ago quarter. Williams-Sonoma brand’s comps declined 1.5% against the 7.6% growth in the year-ago quarter.
Operating Highlights
The gross margin was 41.5%, down 220 basis points (bps) from the year-ago period. The downside was primarily caused by higher shipping and freight costs. And, merchandise margin remains flat year over year with occupancy deleverage of 30 bps.
Non-GAAP selling, general and administrative expenses were 26% of net revenues compared with 27.5% in the year-ago quarter, reflecting a decrease of 150 bps. Furthermore, the non-GAAP operating margin contracted 80 bps from the year-ago period to 15.5% for the quarter.
Financials
As of Oct 30, 2022, Williams-Sonoma reported cash and cash equivalents of $113.1 million compared with $850.3 million at the fiscal 2021-end. Net cash provided by operating activities totaled $588.5 million during the first nine months of fiscal 2022, down $788.3 million in the year-ago quarter.
Williams-Sonoma rewarded shareholders in the form of dividends (more than $165.3 million) and share repurchases (more than $841 million) during the first nine months of fiscal 2022.
Fiscal 2022 Guidance
WSM reiterates that fiscal 2022 net revenues to grow in mid-to-high single digits. It also expects the operating margin to be relatively in line with fiscal 2021.
Given the macro uncertainty, WSM did not update its guidance through fiscal year 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 Wingstop Inc. (WING - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .
Wingstop sports a Zacks Rank #1. WING has a long-term earnings growth rate of 11%.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and Earnings Per Share (EPS) suggests growth of 18.1% and 16.4%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 18.6%, on average.
The Zacks Consensus Estimate for Chuy’s Holdings 2023 sales and EPS suggests growth of 8.6% and 11.7%, respectively, from the corresponding year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 4.1%, on average.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.1% and 31%, respectively, from the corresponding year-ago period’s levels.