Williams-Sonoma (WSM) Tops Q4 EPS by 13c, Revenues Beat; FY19 EPS/Revenue Guidance Above Consensus

March 20, 2019 4:25 PM EDT

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Williams-Sonoma (NYSE: WSM) reported Q4 EPS of $2.10, $0.13 better than the analyst estimate of $1.97. Revenue for the quarter came in at $1.84 billion versus the consensus estimate of $1.8 billion.

Laura Alber, President and Chief Executive Officer, commented, “2018 was a strong year for our business. We outperformed revenue and EPS expectations while making important investments in our business that set us up for accelerated long-term growth. We want to thank our talented and hard-working associates, and our customers for making this all possible. For 2019 and beyond, our goal is to maximize growth and maintain high profitability, and we have several substantial growth engines that we will be aggressively prioritizing, including West Elm, our newly-launched Business to Business offering, our emerging brands — Williams Sonoma Home, Rejuvenation and Mark and Graham — as well as growth in our largest brand Pottery Barn and our namesake brand Williams Sonoma. In addition to our brands, we have a number of cross-brand initiatives, including The Key, which we believe will also be significant drivers of our future growth.”

Alber continued, “We will also continue to improve the customer experience through technology innovation and supply chain optimization. We believe this is our oxygen for growth. We have built over time a vertically-integrated supply chain and a highly unique platform to launch and scale new brands and businesses. These are unparalleled advantages, which will enable us to deliver mid-to-high single digit revenue and margin stability for the long-term.”

FOURTH QUARTER 2018

  • Net revenue growth of 9.3% to $1.8 billion
  • Comparable brand revenue growth of 2.4%, including double-digit comp growth for West Elm
  • E-commerce net revenue growth accelerates to 14.3% (non-GAAP of 14.2%) and 54.6% of total company net revenues (See Exhibit 1)
  • GAAP diluted EPS of $1.93; non-GAAP diluted EPS outperforms at $2.10, a 25% increase compared to Q4 17 (See Exhibit 1)

GUIDANCE:

Williams-Sonoma sees FY2019 EPS of $4.50-$4.70, versus the consensus of $4.33. Williams-Sonoma sees FY2019 revenue of $5.67-5.84 billion, versus the consensus of $5.63 billion.

  • Total Net Revenues: $5.670 billion - $5.840 billion
  • Comparable Brand Revenue Growth: 2% - 5%
  • Non-GAAP Operating Margin: In-line with FY 18
  • Non-GAAP Diluted EPS: $4.50 - $4.70
  • Non-GAAP Income Tax Rate: 23% - 24%
  • Depreciation and Amortization: $185 million - $195 million
  • Net 30 store closures for a total store count of 595 by the end of FY19
  • Capital Spending: $200 million - $220 million
  • Return to Shareholders: quarterly cash dividend of $0.48 per share and incremental share buybacks under our multi-year share repurchase authorization of approximately $710 million.

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



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