Williams-Sonoma Raises Its EPS Guidance after an Impressive Q1



First-quarter performance

Williams-Sonoma (WSM) reported its first-quarter earnings results after the market closed on May 30. For the quarter that ended on May 5, the company posted adjusted EPS of $0.81 on revenue of $1.24 billion.

Year-over-year, the company’s EPS rose 20.9%, while its revenue rose 3.2%.

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Stock performance

In the quarter, WSM outperformed analysts’ EPS estimate of $0.69, while its revenue was marginally higher than analysts’ expectations. The company’s overall comparable-brand revenue growth came in at 3.5% against a tough comparison of 5.5% last year. The company’s management credited its compelling offerings and differentiated customer experiences for its strong sales growth.

After WSM reported impressive growth in its first-quarter EPS, its management raised its EPS guidance by $0.05. The company’s strong first-quarter earnings and its management’s raising of its EPS guidance appear to have contributed to the increase in its stock price. WSM was up 12.2% in after-market trading hours on May 30.

Year-to-date performance

YTD (year-to-date), WSM has returned 2.3% as of May 30. The company is lagging the broader equity markets, with the S&P 500 Index returning 11.2% since the beginning of this year. The resumption of the trade war between the United States and China has put pressure on the company’s stock price. In comparison, Bed Bath & Beyond (BBBY) has returned 12.8%, while RH (RH) has fallen 27.3% YTD.

The SPDR S&P Homebuilders ETF (XHB), which invests ~21.0% of its holdings in home improvement and home furnishing retailers, has returned 19.8% in the same period.


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