Piper Jaffray Cuts Price Target on Williams-Sonoma (WSM) to $62 Following 1Q Report
Piper Jaffray maintained a Neutral rating on Williams-Sonoma (NYSE: WSM), and cut the price target to $62.00 (from $63.00), following the company's 1Q earnings report. WSM reported anEPS of $0.53, ahead of the consensus estimate of $0.50 and guidance of $0.48 to $0.52. FQ2 outlook calls for 1% to 4% comparable brand revenue growth and EPS of $0.54 to $0.60; consensus was at +3% and $0.60.
Analyst Neely Tamminga commented, "We are adjusting our estimates on the heels of WSM's report in which EPS of $0.53 came in ahead of expectations of $0.50 for FQ1 and management reiterated full-year 2016/FY17 guidance at $3.50-$3.65. For WSM, comps came in at 4.5% versus expectations of 3.2%, and gross margins declined 100 bps y/y versus expectations of a 50 bps decline. Inventory was essentially flat y/y and management reiterated their plans to maintain discipline in their inventory levels while also executing appropriate investments in their future. Longerterm, we believe WSM is a high-quality option in an increasingly competitive landscape for all-things-home, and its path to double revenues and expand margins may take longer than investors are willing to wait; we remain Neutral on WSM shares."
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Shares of Williams-Sonoma closed at $52.10 yesterday.