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Can Williams-Sonoma Maintain Upward Momentum in Q3?

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Stock performance

Williams-Sonoma (WSM) is scheduled to post it third-quarter earnings after the market closes on November 15. As of November 9, the company was trading at $64.0, which represents an increase of 2.2% since the announcement of its second-quarter earnings on August 22.

In the second quarter, Williams-Sonoma posted adjusted EPS of $0.77 on revenues of $1.27 billion, outperforming analysts’ expectations of $0.68 and $1.26 billion. Also, the company posted a comparable brand sales growth of 4.6%, beating analysts’ expectation of 4.1%. After posting better-than-expected second-quarter earnings, the company’s management raised its comparable brand sales growth, revenues, and EPS guidance for 2018. The better-than-expected second-quarter earnings and improved 2018 guidance by the company’s management have boosted the company’s stock price.

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Year-to-date

Since the beginning of 2018, Williams-Sonoma has returned 23.8%. During the same period, its peers Lowe’s Companies (LOW) and Home Depot (HD) have returned 4.2% and -1.9%, respectively. The SPDR S&P Homebuilders ETF (XHB), which invests 24.0% of its holdings in home improvement and home furnishing companies, fell 21.7% year-to-date.

Series overview

With Williams-Sonoma’s third-quarter earnings around the corner, we’ll look at analysts’ revenue and EPS expectations for the quarter. We’ll also cover management’s guidance and analysts’ expectations for 2018. Finally, we’ll end this series by looking at analysts’ recommendations, and the company’s valuation multiple. First, let’s start by looking at analysts’ revenue expectation for the third quarter.

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