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) Stock Surges 128% in a Year: Here's Why
Read MoreHide Full Article
Williams-Sonoma, Inc. (WSM - Free Report) has gained 128.2% in the past year compared with the Zacks Retail - Home Furnishings industry’s 46.7% growth and the S&P 500 index’s 23.4% rise.
The company is benefiting from its strong e-commerce business and B2B initiative and solid operating model. Also, the emphasis on digitalization & marketing initiatives and global expansion plans bode well. Despite ongoing macroeconomic pressures in its global business, WSM performed well in first-quarter fiscal 2024, particularly in key markets like India, Canada and Mexico.
The Zacks Consensus Estimate for this currently Zacks Rank #3 (Hold) company's fiscal 2025 earnings increased to $15.75 per share from $15.20 in the past 30 days, solidifying growth trend. Its earnings topped the Zacks Consensus Estimate in all the trailing four quarters, with the average surprise being 19.55%.
Image Source: Zacks Investment Research
The upside is supported by its solid VGM Score of A, contributed by a Momentum and Growth Score of A and a Value Score of B. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the continuation of an outperformance in the near term
Let’s delve into the driving factors supporting the rally.
B2B Strategy to Drive Growth: B2B continues to be one of the WSM's key initiatives. The B2B operates in two formats, trade and contract. During first-quarter fiscal 2024, the Business-to-Business segment moved up 10% year over year, driving record-breaking demand. The trade business improved 6%. The contract business, which makes up about a third of the B2B segment, increased 18% year over year. WSM benefited from its diverse book of businesses, ranging from sofas for UC San Diego dorms to corporate gifting for Pebble Beach Company. The company also witnessed continued growth for its existing large project customers, such as Marriott, Dave & Buster's and Jamestown Properties.
The B2B market is a crucial strategic initiative for WSM and a major part of future growth. It leverages the company's brands, design capabilities, global sourcing and efficient delivery system. WSM is confident about the B2B segment, which is less affected by housing market fluctuations.
Focus on E-commerce Channel: Williams-Sonoma is one of the largest e-commerce retailers in the United States. Its innovative efforts have helped the company to drive e-commerce growth. E-commerce penetration has been increasing, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies. Its ongoing retail optimization efforts have transformed its fleet to be positioned in the most profitable, inspiring and strategic locations.
WSM is enhancing its online experience with its investment in a proprietary e-commerce technology. The company's team focuses on improving its e-commerce experience, including product discovery, personalization and customer care. AI plays a crucial role in this effort, providing WSM with a competitive advantage in the industry.
For 2024, WSM's capital allocation plans prioritize funding its business operations and investing in long-term growth. The company expects to spend 225 million in capital expenditures to invest in the long-term growth of its business, with 75% of this investment being dedicated to driving its e-commerce leadership and supply chain efficiency.
Marketing & Digitalization Initiatives: In the digital channels, it has been acquiring new customers at record rates all year and customer retention metrics continue to improve among new customers. As one of the largest e-commerce players, the company continues to enhance its proprietary e-commerce technology stack, positioning itself as a leader in the retail industry through the utilization of AI in its tech capabilities. In the second half of 2024, WSM will introduce new in-store innovations with new floor sets and enhance the online shopping experience.
The company’s focus on expansion initiatives is mirrored in its diversified product portfolio and global market reach. The company's marketing capabilities are a key component of its return to growth strategy. Its in-house digital marketing optimization, supported by world-class customer analytics and first-party data collection, serves as a competitive advantage. In first-quarter fiscal 2024, WSM increased its ad spend and invested in paid marketing and its proven social strategy. The investment drove sales improvement, facilitated the acquisition of new customers and helped gain market share.
Global Expansion Efforts: The company is expanding globally, with a particular focus on the Indian market. In first-quarter fiscal 2024, WSM observes continued robust growth in India from heightened marketing and brand awareness efforts. The company plans to open additional locations in 2024.
In Canada, the business thrives in both retail and direct-to-consumer channels due to enhanced omni-channel strategies and wider product selection. In Mexico, the market demonstrates resilience fueled by a focus on the design business and an expanded assortment. WSM will leverage the knowledge gained from these markets to enhance the global customer experience in new and emerging markets.
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 84.6% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 41.3% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 11.7% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.9% growth, respectively, from the prior-year figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Williams-Sonoma (WSM) Stock Surges 128% in a Year: Here's Why
Williams-Sonoma, Inc. (WSM - Free Report) has gained 128.2% in the past year compared with the Zacks Retail - Home Furnishings industry’s 46.7% growth and the S&P 500 index’s 23.4% rise.
The company is benefiting from its strong e-commerce business and B2B initiative and solid operating model. Also, the emphasis on digitalization & marketing initiatives and global expansion plans bode well. Despite ongoing macroeconomic pressures in its global business, WSM performed well in first-quarter fiscal 2024, particularly in key markets like India, Canada and Mexico.
The Zacks Consensus Estimate for this currently Zacks Rank #3 (Hold) company's fiscal 2025 earnings increased to $15.75 per share from $15.20 in the past 30 days, solidifying growth trend. Its earnings topped the Zacks Consensus Estimate in all the trailing four quarters, with the average surprise being 19.55%.
Image Source: Zacks Investment Research
The upside is supported by its solid VGM Score of A, contributed by a Momentum and Growth Score of A and a Value Score of B. The positive trend signifies bullish analysts’ sentiments, robust fundamentals and the continuation of an outperformance in the near term
Let’s delve into the driving factors supporting the rally.
B2B Strategy to Drive Growth: B2B continues to be one of the WSM's key initiatives. The B2B operates in two formats, trade and contract. During first-quarter fiscal 2024, the Business-to-Business segment moved up 10% year over year, driving record-breaking demand. The trade business improved 6%. The contract business, which makes up about a third of the B2B segment, increased 18% year over year. WSM benefited from its diverse book of businesses, ranging from sofas for UC San Diego dorms to corporate gifting for Pebble Beach Company. The company also witnessed continued growth for its existing large project customers, such as Marriott, Dave & Buster's and Jamestown Properties.
The B2B market is a crucial strategic initiative for WSM and a major part of future growth. It leverages the company's brands, design capabilities, global sourcing and efficient delivery system. WSM is confident about the B2B segment, which is less affected by housing market fluctuations.
Focus on E-commerce Channel: Williams-Sonoma is one of the largest e-commerce retailers in the United States. Its innovative efforts have helped the company to drive e-commerce growth. E-commerce penetration has been increasing, buoyed by its in-house tech platform, rapid experimentation program, content-rich online experience and marketing strategies. Its ongoing retail optimization efforts have transformed its fleet to be positioned in the most profitable, inspiring and strategic locations.
WSM is enhancing its online experience with its investment in a proprietary e-commerce technology. The company's team focuses on improving its e-commerce experience, including product discovery, personalization and customer care. AI plays a crucial role in this effort, providing WSM with a competitive advantage in the industry.
For 2024, WSM's capital allocation plans prioritize funding its business operations and investing in long-term growth. The company expects to spend 225 million in capital expenditures to invest in the long-term growth of its business, with 75% of this investment being dedicated to driving its e-commerce leadership and supply chain efficiency.
Marketing & Digitalization Initiatives: In the digital channels, it has been acquiring new customers at record rates all year and customer retention metrics continue to improve among new customers. As one of the largest e-commerce players, the company continues to enhance its proprietary e-commerce technology stack, positioning itself as a leader in the retail industry through the utilization of AI in its tech capabilities. In the second half of 2024, WSM will introduce new in-store innovations with new floor sets and enhance the online shopping experience.
The company’s focus on expansion initiatives is mirrored in its diversified product portfolio and global market reach. The company's marketing capabilities are a key component of its return to growth strategy. Its in-house digital marketing optimization, supported by world-class customer analytics and first-party data collection, serves as a competitive advantage. In first-quarter fiscal 2024, WSM increased its ad spend and invested in paid marketing and its proven social strategy. The investment drove sales improvement, facilitated the acquisition of new customers and helped gain market share.
Global Expansion Efforts: The company is expanding globally, with a particular focus on the Indian market. In first-quarter fiscal 2024, WSM observes continued robust growth in India from heightened marketing and brand awareness efforts. The company plans to open additional locations in 2024.
In Canada, the business thrives in both retail and direct-to-consumer channels due to enhanced omni-channel strategies and wider product selection. In Mexico, the market demonstrates resilience fueled by a focus on the design business and an expanded assortment. WSM will leverage the knowledge gained from these markets to enhance the global customer experience in new and emerging markets.
Key Picks
Some better-ranked stocks in the Zacks Retail-Wholesale sector include:
Wingstop Inc. (WING - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter negative earnings surprise of 21.4%, on average. The stock has surged 90.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for WING’s 2024 sales and earnings per share (EPS) suggests a rise of 27.5% and 36.7%, respectively, from the year-ago levels.
Brinker International, Inc. (EAT - Free Report) carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 213.4%, on average. EAT’s shares have surged 84.6% in the past year.
The Zacks Consensus Estimate for EAT’s 2024 sales and EPS indicates 5% and 41.3% growth, respectively, from the year-earlier actuals.
El Pollo Loco Holdings, Inc. (LOCO - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 19.4%, on average. LOCO’s shares have risen 11.7% in the past year.
The Zacks Consensus Estimate for LOCO’s 2025 sales and EPS indicates 3.8% and 9.9% growth, respectively, from the prior-year figures.