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Strong Sales Boost William-Sonoma’s Stock Price in H1 2018

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Stock performance

William-Sonoma (WSM) stock rose 18.7% in the first half of 2018 and has risen 18.9% year-to-date. The company beat analysts’ EPS and revenue estimates in the first quarter and raised its revenue and EPS guidance for 2018, boosting investors’ confidence and its stock price.

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First-quarter performance

In the first quarter, William-Sonoma posted revenue of $1.20 billion, beating analysts’ estimate of $1.16 billion. Its revenue was boosted by its SSSG (same-store sales growth) of 5.5%, which also beat analysts’ estimate (4.0%). The company’s digital leadership, product innovation, retail transformation, and operational excellence initiatives boosted its sales.

Its adjusted EPS rose 31.4% YoY (year-over-year) to $0.67 in the first quarter, beating analysts’ estimate of $0.58. Its EPS growth was driven by revenue growth, net margin expansion, and share repurchases.

Outlook

In 2018, William-Sonoma expects revenue of $5.50 billion–$5.66 billion and SSSG of 2%–5%. It expects its EPS to grow 13.4%–16.1% YoY to $4.15 to $4.25 from $3.66.

Analysts’ recommendations

Of the 26 analysts following William-Sonoma, 3.8% recommend “buy,” 80.8% recommend “hold,” and 15.4% recommend “sell.” Their average target price of $55.10 implies a 10.3% fall over the next 12 months. Next, we’ll look at Home Depot’s stock performance in the first half of 2018.

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