Williams-Sonoma (WSM) Reports In-Line Q3 EPS, Revenues Beat; Offers FY19 EPS/Revenues Guidance

Williams-Sonoma (NYSE: WSM) reported Q3 EPS of $1.02, in-line with the analyst estimate of $1.02. Revenue for the quarter came in at $1.44 billion versus the consensus estimate of $1.42 billion.

THIRD QUARTER 2019

• Net revenue growth of 6.3% to $1.442 billion
• Comparable brand revenue growth of 5.5%, primarily driven by West Elm at 14.1% and Pottery Barn at 3.4%
• GAAP operating margin of 7.1%; non-GAAP operating margin of 7.6%, in-line with Q3 18
• GAAP diluted EPS of $0.94; non-GAAP diluted EPS of $1.02, a 7.4% increase compared to Q3 18

Laura Alber, President and Chief Executive Officer, commented, “Q3 marks another quarter of strong performance. Comparable revenues accelerated to 5.5%, non-GAAP operating margins held flat to last year despite increased tariff headwinds and non-GAAP EPS grew 7.4%. Our results and continued success relative to the industry reflect that our strong value proposition of high quality, design-led, sustainable products is resonating with our customers. In a fragmented home furnishings industry, it is hard to overstate how important it has been for us to continually evolve to stay ahead of the pack and remain at the forefront of driving profitable growth. Importantly, our digital-first model is a key component of our success.”

Alber continued, “Our year-to-date performance gives us the confidence that we can carry this momentum forward in the holiday season and beyond. As a result, we are raising the low end of our full-year 2019 guidance and reiterating our long term financial targets.”

GUIDANCE:

Williams-Sonoma sees FY2019 EPS of $4.65-$4.80. Williams-Sonoma sees FY2019 revenue of $5.77-5.9 billion.

GUIDANCE

• Raises low end of fiscal year 2019 guidance
• Reiterates long-term financial targets

Fiscal Year 2019*

• Total Net Revenues: $5.770 billion - $5.900 billion
• Comparable Brand Revenue Growth: 3.5% - 6%
• Non-GAAP Operating Margin: In-line with FY 18
• Non-GAAP Diluted EPS: $4.65 - $4.80
• Non-GAAP Income Tax Rate: 23% - 24%
• Depreciation and Amortization: $185 million - $195 million
• Net 25 store closures for a total store count of 601 by the end of FY 19
• Capital Spending: $200 million - $220 million
• Return to Shareholders: quarterly cash dividend of $0.48 per share and continued share buybacks under our multi-year share repurchase authorization of approximately $600 million

For earnings history and earnings-related data on Williams-Sonoma (WSM) click here.

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