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Williams-Sonoma (WSM) Surges 67% in the Past Year: Here's Why
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Williams-Sonoma, Inc. (WSM - Free Report) has been benefiting from its intent focus on diversifying its product portfolio, the evolution of its e-commerce platform and the progress of its Business-to-Business (B2B) division. Leveraged by these tailwinds, the company’s horizons are expanding on a global scale, leading it to new growth heights, despite the lingering softness in consumer spending.
The positive impact of the aforementioned factors is reflected in the growth of the company's share price, which surged a havoc 66.6% in the past year, outperforming the Zacks Retail - Home Furnishings industry’s 38.4% growth.
Adding to this growth trend, the earnings estimates of this Zacks Rank #3 (Hold) company for fiscal 2023 have moved north to $14.49 per share from $14.01 over the past 60 days. Williams-Sonoma also delivered a trailing four-quarter earnings surprise of 8.9%, on average. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the prospects of ongoing outperformance in the near term.
Image Source: Zacks Investment Research
Appealing Factors
Expanding Product Portfolio: Williams-Sonoma leverages the market demand patterns for its brand portfolio, which serves a wide range of categories, aesthetics and life stages, and helps stimulate its growth prospects despite the ongoing macroeconomic challenges. During the third quarter of fiscal 2023, Williams-Sonoma witnessed various new product offerings and collaborations under its brands, including Williams Sonoma and Pottery Barn. Its recent collaborations with Shondaland and Netflix, Stanley Tucci and GreenPan, Deb Perelman and many others, have directly helped it to diversify its product offerings and reach a broadened customer space.
E-Commerce Platform Boosting Growth: Being one of the most profitable e-commerce companies, 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’s investment in the merchandising of its brands, efficient catalog circulations and digital marketing boosts revenues from the e-commerce channel.
Furthermore, its e-commerce penetration has been increasing, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies. Williams-Sonoma remains on track to invest nearly $225 million in capital expenditures for the long-term growth of the business in fiscal 2023, prioritizing technology and supply-chain initiatives that primarily support e-commerce growth. This highlights the digital-first nature of the company’s business.
Focus on B2B: Williams-Sonoma’s B2B strategy has been successful, allowing the company to capture market share in the fragmented $80 billion market. WSM effectively utilizes its portfolio brands, internal design team and global sourcing capabilities to offer diverse solutions to B2B customers. With 1.5% year-over-year growth in overall business, the company witnessed a 30% rise in its contract business in third-quarter fiscal 2023. WSM secured several contracts across various industries, including partnerships with Sony in the entertainment sector.
While the slowdown in the housing market impacted the trade business, WSM is optimistic about its long-term prospects, observing recent improvements in this segment.
Key Picks
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
It has a trailing four-quarter earnings surprise of 17.8%, on average. The stock has gained 26.9% in the past year. The Zacks Consensus Estimate for CASY’s fiscal 2024 sales and earnings per share (EPS) indicates an increase of 0.3% and 7.8%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 28.3%, on average. The stock has risen 53.1% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS indicates a 19.3% and a 18.8% rise, respectively, from the year-ago period’s levels.
The Gap, Inc. (GPS - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 137.9%, on average. The stock has risen 77.4% in the past year.
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales indicates an improvement of 0.9% from the year-ago period’s level but the same for EPS implies a decline of 2.8% .
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Williams-Sonoma (WSM) Surges 67% in the Past Year: Here's Why
Williams-Sonoma, Inc. (WSM - Free Report) has been benefiting from its intent focus on diversifying its product portfolio, the evolution of its e-commerce platform and the progress of its Business-to-Business (B2B) division. Leveraged by these tailwinds, the company’s horizons are expanding on a global scale, leading it to new growth heights, despite the lingering softness in consumer spending.
The positive impact of the aforementioned factors is reflected in the growth of the company's share price, which surged a havoc 66.6% in the past year, outperforming the Zacks Retail - Home Furnishings industry’s 38.4% growth.
Adding to this growth trend, the earnings estimates of this Zacks Rank #3 (Hold) company for fiscal 2023 have moved north to $14.49 per share from $14.01 over the past 60 days. Williams-Sonoma also delivered a trailing four-quarter earnings surprise of 8.9%, on average. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the prospects of ongoing outperformance in the near term.
Image Source: Zacks Investment Research
Appealing Factors
Expanding Product Portfolio: Williams-Sonoma leverages the market demand patterns for its brand portfolio, which serves a wide range of categories, aesthetics and life stages, and helps stimulate its growth prospects despite the ongoing macroeconomic challenges. During the third quarter of fiscal 2023, Williams-Sonoma witnessed various new product offerings and collaborations under its brands, including Williams Sonoma and Pottery Barn. Its recent collaborations with Shondaland and Netflix, Stanley Tucci and GreenPan, Deb Perelman and many others, have directly helped it to diversify its product offerings and reach a broadened customer space.
E-Commerce Platform Boosting Growth: Being one of the most profitable e-commerce companies, 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’s investment in the merchandising of its brands, efficient catalog circulations and digital marketing boosts revenues from the e-commerce channel.
Furthermore, its e-commerce penetration has been increasing, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies. Williams-Sonoma remains on track to invest nearly $225 million in capital expenditures for the long-term growth of the business in fiscal 2023, prioritizing technology and supply-chain initiatives that primarily support e-commerce growth. This highlights the digital-first nature of the company’s business.
Focus on B2B: Williams-Sonoma’s B2B strategy has been successful, allowing the company to capture market share in the fragmented $80 billion market. WSM effectively utilizes its portfolio brands, internal design team and global sourcing capabilities to offer diverse solutions to B2B customers. With 1.5% year-over-year growth in overall business, the company witnessed a 30% rise in its contract business in third-quarter fiscal 2023. WSM secured several contracts across various industries, including partnerships with Sony in the entertainment sector.
While the slowdown in the housing market impacted the trade business, WSM is optimistic about its long-term prospects, observing recent improvements in this segment.
Key Picks
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector.
Casey's General Stores, Inc. (CASY - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
It has a trailing four-quarter earnings surprise of 17.8%, on average. The stock has gained 26.9% in the past year. The Zacks Consensus Estimate for CASY’s fiscal 2024 sales and earnings per share (EPS) indicates an increase of 0.3% and 7.8%, respectively, from the year-ago period’s levels.
Arcos Dorados Holdings Inc. (ARCO - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 28.3%, on average. The stock has risen 53.1% in the past year.
The Zacks Consensus Estimate for ARCO’s 2023 sales and EPS indicates a 19.3% and a 18.8% rise, respectively, from the year-ago period’s levels.
The Gap, Inc. (GPS - Free Report) currently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 137.9%, on average. The stock has risen 77.4% in the past year.
The Zacks Consensus Estimate for GPS’ fiscal 2024 sales indicates an improvement of 0.9% from the year-ago period’s level but the same for EPS implies a decline of 2.8% .