Williams-Sonoma (WSM) Tops Q4 EPS by 56c, Revenues Beat

Williams-Sonoma (NYSE: WSM) reported Q4 EPS of $3.95, $0.56 better than the analyst estimate of $3.39. Revenue for the quarter came in at $2.29 billion versus the consensus estimate of $2.17 billion.

• Q4 comparable brand revenue growth accelerates to 25.7%, including e-commerce comp growth of 47.9%
• Q4 GAAP operating margin of 17.5%; Q4 non-GAAP operating margin expansion of 630bps to 17.9%
• Q4 GAAP diluted EPS of $3.92; Q4 Non-GAAP diluted EPS of $3.95
• Quarterly dividend increase of 11.3%; new stock repurchase authorization of $1 billion
• Accelerated path to $10 billion in net revenues and 15% non-GAAP operating margins in five years

“2020 was a year of challenges and dramatic changes in the way we live. It was also a year where we were pushed to adapt and clarify what is important to us. I could not be prouder of the accomplishments of the team here at Williams-Sonoma. Their dedication was a vital part of our ability to substantially outperform the industry and gain market share. In Q4, despite shipping constraints and low retail traffic, we delivered another quarter of accelerating revenue and profitability with 26% comp growth and over 85% EPS growth. This strong end to the year, combined with our outperformance throughout 2020, drove record fiscal year revenue growth, substantial operating margin expansion and EPS that was almost double that of last year,” said Laura Alber, President and Chief Executive Officer.

“These record results reflect the power of our three key differentiators, which set us apart and have become increasingly relevant. They are:

• Our in‐house design;
• Our digital-first channel strategy; and
• Our values.

We will continue to invest in these differentiators to drive growth and gain market share,” Alber continued.

Alber concluded, “Looking ahead, we are very optimistic about our runway for growth and profitability. All of our brands are starting the year strong, and we expect this strength to continue through 2021 and beyond based on a number of factors. First, it is the ongoing momentum of our growth initiatives and the increasing relevance of our three key differentiators. Second, it is the recovery in our retail traffic and our inventory levels as we move throughout the year. And third, it is the favorable macro trends that are expected to continue to benefit our business for the long-term, including high consumer confidence, a strong housing market, an accelerating shift to e-commerce, the expected continuation of working from home in some capacity post pandemic, and the importance of sustainability and values to the consumer. Against this backdrop, we are confident that we will deliver mid-to-high single digit revenue growth and operating margin expansion in 2021. Longer-term, we have accelerated our path to $10 billion in net revenues and see us hitting this milestone in the next five years, with operating margins at 15%.”

Fiscal Year 2021

Given the ongoing strength of our business as we enter fiscal year 2021, the expected recovery in our retail traffic and inventory levels as we move throughout the year, as well as the macro trends that we believe will continue to benefit our business, we are planning for fiscal year 2021 financial performance to be in line with our long-term financial guidance of mid-to-high single digit net revenue growth and year-over-year non-GAAP operating margin expansion.

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

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