On Jun 28, 2016, we issued an updated research report on Williams-Sonoma, Inc. WSM.
On May 25, this multi-channel specialty retailer of premium home reported better-than-expected results in first quarter 2016.
Adjusted earnings of 53 cents per share surpassed the Zacks Consensus Estimate by 6%. Earnings increased 10.4% on the back of solid revenues, and an improved selling, general and administrative (SG&A) expense ratio. Net revenue of $1.098 billion surpassed the Zacks Consensus Estimate by 1.76%. Net sales rose 6.5% year over year driven by higher comparable brand revenues.
Williams-Sonoma enjoys the competitive advantage of a multi-brand/multi-channel business model. The company has a strong international presence and is one of the largest e-commerce retailers in the U.S.
Williams-Sonoma’s top line was strong in 2015 and early 2016, driven by strong performance of the West Elm brand. Revenues were also driven by the increase in international sales and from its e-commerce business gaining traction. The successful launch of new products and stores is also contributing to its sales growth. Moreover, the company has undertaken several initiatives to drive the top line in the near term.
The company expects margins to be hurt due to supply chain investments and inventory initiatives.
Williams-Sonoma carries a Zacks Rank #3 (Hold).
Investors interested in the home furnishings space may also consider stocks like Tempur Sealy International Inc. TPX, La-Z-Boy Incorporated LZB and Mohawk Industries Inc. MHK. All the three stocks carry a Zacks Rank #2 (Buy).
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