Williams-Sonoma Beats Analysts’ Fourth-Quarter Estimates



Fourth-quarter performance

Williams-Sonoma (WSM) released its fourth-quarter results after the market closed yesterday. During the quarter, the company’s adjusted EPS grew 25% YoY (year-over-year) to $2.10, and its revenue grew 9.3% YoY to $1.84 billion.

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Stock performance

Williams-Sonoma beat analysts’ expectations of revenue of $1.80 billion and adjusted EPS of $1.96. However, its comparable-brand revenue grew just 2.4%, falling short of analysts’ expectation of 2.5%. The company blamed weakness in its gift business for the soft growth.

Despite this miss, the company’s stock rose 2.5% after hours yesterday thanks to its better-than-expected 2019 guidance. This year, William-Sonoma expects adjusted EPS of $4.50–$4.70 and revenue of $5.67 billion–$5.84 billion, surpassing analysts’ expectations of $4.33 and $5.64 billion, respectively.

Year-to-date performance

After losing 2.4% of its stock value in 2018, Williams-Sonoma started this year on stronger footing. The company had risen 12.7% year-to-date as of yesterday. Meanwhile, Restoration Hardware parent RH (RH) and Bed Bath & Beyond (BBBY) have risen 10.0% and 20.1%, respectively, and the SPDR S&P Homebuilders ETF (XHB), which invests ~22.0% of its holdings in home improvement and home furnishing retailers, has risen 15.5%.

Series overview

In this series, we’ll compare Williams-Sonoma’s fourth-quarter performance with analysts’ expectations and look at management’s guidance for this year. First, we’ll look at what drove the company’s revenue in the fourth quarter.


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