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Williams-Sonoma's (WSM) Q4 Earnings Top, Dividend Up 15%
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Williams-Sonoma Inc. (WSM - Free Report) reported impressive earnings for fourth-quarter fiscal 2022 (ended Jan 29, 2023). The bottom line surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Shares of this leading home furnishings retailer grew 1.13% on Mar 16.
Yet, revenues declined and missed analysts’ expectations due to weak November and January demand.
Laura Alber, president and chief executive officer, stated, “As we look to the long-term, we are confident in our continued ability to take market share and to do so, profitably. With our culture of innovation and talent, our values and the strength of our team, we're moving ahead with our vision of furnishing our customers everywhere. As we do, we are confident that we will continue to deliver for all our customers, employees and shareholders.”
WSM also announced a 15% hike in the quarterly cash dividend to 90 cents per share, payable on May 26, 2023, to stockholders of record as of Apr 21. Also, its board of directors expanded the stock buyback capacity to $1 billion, which supersedes the current stock repurchase authorization.
Earnings, Revenues & Comps Discussion
Non-GAAP earnings of $5.50 per share surpassed the Zacks Consensus Estimate of $5.41 by 1.7% and increased 1.5% from $5.42 reported a year ago.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Revenues of $2.45 billion missed the consensus mark of $2.59 billion by 5.2% and decreased 1.9% year over year. Strong order fulfillment, ongoing momentum in the growth initiatives and benefits of solid market share were offset by mid-single-digit negative comp range owing to the strong holiday season.
Comps fell 0.6% versus 10.8% growth in the year-ago period. Comps at West Elm and Williams-Sonoma brand decreased 10.7% and 2.5% versus 18.3% and 4.5% growth registered in the prior-year quarter, respectively. Comps in Pottery Barn and Pottery Barn Kids and Teen grew 5.8% and 4%, respectively compared with 16.2% and a negative 6.1% reported in the prior-year quarter.
Operating Highlights
Gross margin was 41.2%, down 380 basis points (bps) from the year-ago period. The decline was due to higher inbound and outbound shipping and freight costs as well as 60 bps lower occupancy profits as costs increased by 5.4% during the reported period.
Non-GAAP selling, general and administrative expenses were 21.3% of net revenues compared with 24% in the year-ago quarter, reflecting a decrease of 270 bps. Furthermore, non-GAAP operating margin contracted 110 bps from the year-ago period to 19.9% for the quarter.
Financials
As of Jan 29, 2023, Williams-Sonoma reported cash and cash equivalents of $367.3 million compared with $850.3 million at fiscal 2021-end. Net cash provided by operating activities totaled $1.05 billion compared with $1.37 billion in fiscal 2021.
Return on invested capital or ROIC was 49.4% compared with 57.9% last year, driven by record earnings. Williams-Sonoma returned nearly $1.1 billion to shareholders in the form of dividends ($217 million) and share repurchases (approximately $880 million).
Fiscal 2022 Highlights
Net revenues came in at $8.67 billion, up 5.2% in fiscal 2022. Comps growth for fiscal 2022 was 6.5% compared with 22% in the year-ago period. Adjusted earnings per share came in at $16.54 compared with $14.85 a year ago.
Non-GAAP gross margin declined to 42.4% from 44% in fiscal 2021 due to higher shipping and freight costs and year-over-year flat merchandise margins. Non-GAAP operating margin also contracted 20 bps from the year-ago period to 17.5%.
Guidance
WSM expects fiscal 2023 net revenues to range between a decline of 3% and a growth of 3%. It also expects operating margin to be 14-15%.
Further, WSM projects mid-to-high single-digit annual net revenue growth and an operating margin above 15% in the long term (by fiscal 2024).
Zacks Rank & Recent Releases
Williams-Sonoma currently carries a Zacks Rank #4 (Sell).
The Wendy's Company (WEN - Free Report) reported fourth-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate and revenues meeting the same. The top and bottom lines increased on a year-over-year basis.
President and Chief Executive Officer Todd Penegor stated, “In the fourth quarter, our breakfast sales accelerated while our global digital business reached record highs and over the course of the year we opened over 275 restaurants across the globe despite a difficult operating environment. We anticipate our significant business momentum and the sound execution of our key priorities will deliver a new gear of efficient, accelerated growth for the next several years.
Jack in the Box Inc. (JACK - Free Report) reported solid first-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Darin Harris, Jack in the Box’s chief executive officer, stated, "We are very pleased with our first quarter results and enthusiastic about the momentum we are building for 2023 and our ongoing transformation story. Traffic improvement and robust comps, combined with anticipated positive net unit growth, position us to drive meaningful systemwide sales growth in 2023 and improve franchise profitability in an operating environment that remains challenging."
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported its fourth-quarter fiscal 2022 results, with both earnings and revenues missing the Zacks Consensus Estimate.
In the fiscal fourth quarter, Red Robin reported an adjusted loss per share of $1.35, wider than the Zacks Consensus Estimate of a loss of 66 cents per share. In the year-ago quarter, the company reported an adjusted loss of $1.03 per share.
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Williams-Sonoma's (WSM) Q4 Earnings Top, Dividend Up 15%
Williams-Sonoma Inc. (WSM - Free Report) reported impressive earnings for fourth-quarter fiscal 2022 (ended Jan 29, 2023). The bottom line surpassed the Zacks Consensus Estimate and grew on a year-over-year basis. Shares of this leading home furnishings retailer grew 1.13% on Mar 16.
Yet, revenues declined and missed analysts’ expectations due to weak November and January demand.
Laura Alber, president and chief executive officer, stated, “As we look to the long-term, we are confident in our continued ability to take market share and to do so, profitably. With our culture of innovation and talent, our values and the strength of our team, we're moving ahead with our vision of furnishing our customers everywhere. As we do, we are confident that we will continue to deliver for all our customers, employees and shareholders.”
WSM also announced a 15% hike in the quarterly cash dividend to 90 cents per share, payable on May 26, 2023, to stockholders of record as of Apr 21. Also, its board of directors expanded the stock buyback capacity to $1 billion, which supersedes the current stock repurchase authorization.
Earnings, Revenues & Comps Discussion
Non-GAAP earnings of $5.50 per share surpassed the Zacks Consensus Estimate of $5.41 by 1.7% and increased 1.5% from $5.42 reported a year ago.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Williams-Sonoma, Inc. price-consensus-eps-surprise-chart | Williams-Sonoma, Inc. Quote
Revenues of $2.45 billion missed the consensus mark of $2.59 billion by 5.2% and decreased 1.9% year over year. Strong order fulfillment, ongoing momentum in the growth initiatives and benefits of solid market share were offset by mid-single-digit negative comp range owing to the strong holiday season.
Comps fell 0.6% versus 10.8% growth in the year-ago period. Comps at West Elm and Williams-Sonoma brand decreased 10.7% and 2.5% versus 18.3% and 4.5% growth registered in the prior-year quarter, respectively. Comps in Pottery Barn and Pottery Barn Kids and Teen grew 5.8% and 4%, respectively compared with 16.2% and a negative 6.1% reported in the prior-year quarter.
Operating Highlights
Gross margin was 41.2%, down 380 basis points (bps) from the year-ago period. The decline was due to higher inbound and outbound shipping and freight costs as well as 60 bps lower occupancy profits as costs increased by 5.4% during the reported period.
Non-GAAP selling, general and administrative expenses were 21.3% of net revenues compared with 24% in the year-ago quarter, reflecting a decrease of 270 bps. Furthermore, non-GAAP operating margin contracted 110 bps from the year-ago period to 19.9% for the quarter.
Financials
As of Jan 29, 2023, Williams-Sonoma reported cash and cash equivalents of $367.3 million compared with $850.3 million at fiscal 2021-end. Net cash provided by operating activities totaled $1.05 billion compared with $1.37 billion in fiscal 2021.
Return on invested capital or ROIC was 49.4% compared with 57.9% last year, driven by record earnings. Williams-Sonoma returned nearly $1.1 billion to shareholders in the form of dividends ($217 million) and share repurchases (approximately $880 million).
Fiscal 2022 Highlights
Net revenues came in at $8.67 billion, up 5.2% in fiscal 2022. Comps growth for fiscal 2022 was 6.5% compared with 22% in the year-ago period. Adjusted earnings per share came in at $16.54 compared with $14.85 a year ago.
Non-GAAP gross margin declined to 42.4% from 44% in fiscal 2021 due to higher shipping and freight costs and year-over-year flat merchandise margins. Non-GAAP operating margin also contracted 20 bps from the year-ago period to 17.5%.
Guidance
WSM expects fiscal 2023 net revenues to range between a decline of 3% and a growth of 3%. It also expects operating margin to be 14-15%.
Further, WSM projects mid-to-high single-digit annual net revenue growth and an operating margin above 15% in the long term (by fiscal 2024).
Zacks Rank & Recent Releases
Williams-Sonoma currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Wendy's Company (WEN - Free Report) reported fourth-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate and revenues meeting the same. The top and bottom lines increased on a year-over-year basis.
President and Chief Executive Officer Todd Penegor stated, “In the fourth quarter, our breakfast sales accelerated while our global digital business reached record highs and over the course of the year we opened over 275 restaurants across the globe despite a difficult operating environment. We anticipate our significant business momentum and the sound execution of our key priorities will deliver a new gear of efficient, accelerated growth for the next several years.
Jack in the Box Inc. (JACK - Free Report) reported solid first-quarter fiscal 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and bottom lines increased on a year-over-year basis.
Darin Harris, Jack in the Box’s chief executive officer, stated, "We are very pleased with our first quarter results and enthusiastic about the momentum we are building for 2023 and our ongoing transformation story. Traffic improvement and robust comps, combined with anticipated positive net unit growth, position us to drive meaningful systemwide sales growth in 2023 and improve franchise profitability in an operating environment that remains challenging."
Red Robin Gourmet Burgers, Inc. (RRGB - Free Report) reported its fourth-quarter fiscal 2022 results, with both earnings and revenues missing the Zacks Consensus Estimate.
In the fiscal fourth quarter, Red Robin reported an adjusted loss per share of $1.35, wider than the Zacks Consensus Estimate of a loss of 66 cents per share. In the year-ago quarter, the company reported an adjusted loss of $1.03 per share.