Luxury retailer Williams-Sonoma (WSM) reported strong earnings growth and accelerating sales gains late Wednesday. WSM stock jumped above buy points.
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Besides its flagship Williams-Sonoma stores, the San Francisco-based company also operates under several other brands, including Pottery Barn, West Elm and Rejuvenation. Its high-end home furnishings have been a favorite among consumers during a remodeling frenzy since the pandemic began last year.
Williams-Sonoma Earnings
Estimates: Analysts expected Willams-Sonoma earnings per share to surge 59% to $3.39 and revenue rise 15% to $2.12 billion compared to the year-ago quarter, according to Zacks Investment Research. Consensus Metrix pegged same-store sales at 19.2%. Pottery Barn comps were seen rising 18.3% and 17.6% for West Elm.
Results: Williams-Sonoma earnings jumped 85% to $3.95 a share. Revenue rose 24.5% to $2.29 billion, the third straight quarter of accelerating top-line growth. Same-store sales growth accelerated, to 25.7%. Comps jumped 26.2% at Williams Sonoma namesake stores, 25.7% at Pottery Barn as well as Pottery Barn Kids and Teen at 25.7% with 25.2% for West Elm.
Overall e-commerce comp growth was 47.9%,
Outlook: The retailer sees 2021 sales rising in line with its long-term guidance of mid-to-high single digit net revenue growth. It also expects higher adjusted operating margins.
Williams-Sonoma also hiked its quarterly divided by 11% to 59 cents a share and announced a new $1 billion stock buyback.
On Feb. 5, Williams-Sonoma partnered with actress, author and activist Marlo Thomas to launch her first home entertainment collection. An avid tabletop collector, Thomas drew inspiration from the unique pieces she has discovered over her decades of world travel, the company said in a statement.
WSM Stock
In extended trade, WSM stock surged 14% to 155.95, signaling a move above two buy points. WSM stock has a buy point of 151.26 from a seven-week cup-without-handle base, according to MarketSmith chart analysis. Williams Sonoma has a handle that’s too low in the base to be valid, but investors could use 140.24 as an early entry.
Earlier, shares closed down 1.5% to 136.39 on the stock market today.
The IBD 50 stock’s relative strength line is trending upward. Its RS Rating is an 87 out of a possible 99. Its EPS Rating is a 96.
With a Composite Rating of 98, WSM stock is ranked No. 2 in the IBD Retail-Home Furnishings industry group. The IBD Stock Checkup tool shows it sits behind top-ranked At Home Group (HOME).
HOME stock closed up 2.3%. At Home Group reports third-quarter earnings March 23 after the close.
Meanwhile, rival luxury home furnishings retailer RH (RH) edged up 0.3%, but still below its 50-day line. The company reports fourth-quarter earnings March 24 after the close.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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