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) Rallies 12.7% on Q2 Earnings Beat, Ups View
Read MoreHide Full Article
Williams-Sonoma Inc.’s (WSM - Free Report) shares rallied 12.7% in the after-hours trading session on Aug 25, following solid second-quarter fiscal 2021 results. The company’s earnings and revenues handily beat the Zacks Consensus Estimate and significantly increased year over year, courtesy of strength across all brands along with accelerated e-commerce growth.
Meanwhile, it lifted fiscal 2021 outlook once again, courtesy of encouraging macro trends.
Laura Alber, the company’s president and chief executive officer, said, “We believe we are at the intersection of a transformative change that will accelerate the growth of our industry, and our market share within the industry. In addition, our growth strategies are gaining traction faster than we predicted, and our key differentiators are further distancing us from our competition."
Earnings & Revenues
Non-GAAP adjusted earnings of $3.24 per share surpassed the Zacks Consensus Estimate of $2.55 by 27.1%. The figure also increased 80% from $1.80 per share reported a year ago.
Revenues of $1,948.3 million beat the consensus mark of $1,802 million by 8.1% and grew 30.7% year over year. The better-than-expected revenues were driven by solid comparable brand revenue growth and e-commerce penetration.
Comps increased 29.8% versus 10.5% growth in the year-ago period. Comps at West Elm increased an impressive 51.1% compared with 7% growth registered in the prior-year quarter. Comps in the Pottery Barn brand grew 29.6% versus 8.1% growth in the prior-year quarter. Williams Sonoma brand’s comps rose 6.4% compared with 29.4% growth in the year-ago quarter. Pottery Barn Kids and Teen’s comps rose 18% versus 4.8% growth in the year-ago quarter.
Also, e-commerce penetration accounted for 65% of total revenues, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies.
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
Non-GAAP gross margin was 44.1%, up 710 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 27.3% of net revenues compared with 23.9% in the year-ago quarter, reflecting an increase of 340 bps. The upside was driven by robust top-line performance and ongoing financial and operational strategies, partly offset by higher advertising spending. Furthermore, non-GAAP operating margin expanded 360 bps from the year-ago period to 16.7% for the quarter.
Financials
Williams-Sonoma reported cash and cash equivalents of $655.2 million as of Aug 1, 2021 compared with $1,200.3 million at fiscal 2020-end. For the second quarter, its capital expenditure was $36 million. Williams-Sonoma returned more than $180 million to shareholders in the form of $45 million in dividends and $135 million in share repurchases.
Raised Fiscal 2021 Guidance
The company is optimistic about business strength, and anticipates recovery in retail traffic as well as inventory levels during fiscal 2021.
For fiscal 2021, Williams-Sonoma now expects revenues to witness high-teens to low-twenties net revenue growth versus low double-digit to mid-teen improvement expected earlier. It also expects non-GAAP operating margin between 16% and 17% for the year.
Furthermore, the company now projects revenue acceleration to $10 billion over the next four years (a year earlier than previous projection).
Image: Bigstock
Williams-Sonoma (WSM) Rallies 12.7% on Q2 Earnings Beat, Ups View
Williams-Sonoma Inc.’s (WSM - Free Report) shares rallied 12.7% in the after-hours trading session on Aug 25, following solid second-quarter fiscal 2021 results. The company’s earnings and revenues handily beat the Zacks Consensus Estimate and significantly increased year over year, courtesy of strength across all brands along with accelerated e-commerce growth.
Meanwhile, it lifted fiscal 2021 outlook once again, courtesy of encouraging macro trends.
Laura Alber, the company’s president and chief executive officer, said, “We believe we are at the intersection of a transformative change that will accelerate the growth of our industry, and our market share within the industry. In addition, our growth strategies are gaining traction faster than we predicted, and our key differentiators are further distancing us from our competition."
Earnings & Revenues
Non-GAAP adjusted earnings of $3.24 per share surpassed the Zacks Consensus Estimate of $2.55 by 27.1%. The figure also increased 80% from $1.80 per share reported a year ago.
Revenues of $1,948.3 million beat the consensus mark of $1,802 million by 8.1% and grew 30.7% year over year. The better-than-expected revenues were driven by solid comparable brand revenue growth and e-commerce penetration.
Comps increased 29.8% versus 10.5% growth in the year-ago period. Comps at West Elm increased an impressive 51.1% compared with 7% growth registered in the prior-year quarter. Comps in the Pottery Barn brand grew 29.6% versus 8.1% growth in the prior-year quarter. Williams Sonoma brand’s comps rose 6.4% compared with 29.4% growth in the year-ago quarter. Pottery Barn Kids and Teen’s comps rose 18% versus 4.8% growth in the year-ago quarter.
Also, e-commerce penetration accounted for 65% of total revenues, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies.
WilliamsSonoma, Inc. Price, Consensus and EPS Surprise
WilliamsSonoma, Inc. price-consensus-eps-surprise-chart | WilliamsSonoma, Inc. Quote
Operating Highlights
Non-GAAP gross margin was 44.1%, up 710 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 27.3% of net revenues compared with 23.9% in the year-ago quarter, reflecting an increase of 340 bps. The upside was driven by robust top-line performance and ongoing financial and operational strategies, partly offset by higher advertising spending. Furthermore, non-GAAP operating margin expanded 360 bps from the year-ago period to 16.7% for the quarter.
Financials
Williams-Sonoma reported cash and cash equivalents of $655.2 million as of Aug 1, 2021 compared with $1,200.3 million at fiscal 2020-end. For the second quarter, its capital expenditure was $36 million. Williams-Sonoma returned more than $180 million to shareholders in the form of $45 million in dividends and $135 million in share repurchases.
Raised Fiscal 2021 Guidance
The company is optimistic about business strength, and anticipates recovery in retail traffic as well as inventory levels during fiscal 2021.
For fiscal 2021, Williams-Sonoma now expects revenues to witness high-teens to low-twenties net revenue growth versus low double-digit to mid-teen improvement expected earlier. It also expects non-GAAP operating margin between 16% and 17% for the year.
Furthermore, the company now projects revenue acceleration to $10 billion over the next four years (a year earlier than previous projection).
Zacks Rank
Williams-Sonoma — which shares space with RH (RH - Free Report) and Fortune Brands Home & Security, Inc. and Ethan Allen Interiors Inc. (ETD - Free Report) in the Zacks Retail - Home Furnishings industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.