Williams-Sonoma (WSM) Stock Soars on Strong Results, Analysts Raise Numbers
Shares of Williams-Sonoma (NYSE: WSM) are up more than 8% in premarket trading Thursday after the company reported better-than-expected fourth-quarter adjusted EPS.
Williams-Sonoma reported Q4 adjusted EPS of $5.42, topping the consensus estimates of $4.79. Net revenue came in at $2.5 billion, slightly below the analyst expectations of $2.58 billion. Comparable sales rose by 10.8% in the quarter, up 25.7% YoY and beating the analyst consensus by 11.3%.
Gross margin stood at 45%, up from 42.1% in the year-ago quarter and compared to the consensus estimates of 44.4%. The company reported a total of 544 stores in the quarter, missing the estimated 561.
Williams-Sonoma also reiterated its long-term outlook and boosted its quarterly dividends by 10%.
The company also announced a share buyback of $1.5 billion. Quarterly dividends rose to $0.78 per share from $0.71 per share.
“We are planning for our fiscal year 2022 financial performance to be in line with our long-term financial guidance of mid-to-high single digit annual net revenue growth, increasing revenues to $10 billion by fiscal year 2024, and operating margins relatively in-line with our fiscal year 2021 operating margin,” WSM said in a statement.
RBC analyst Steven Shemesh raised the price target to $220.00 per share, up from the prior $202.00, following an ‘impressive margin beat.’
“We suspect bears will continue to hang on to the belief that WSM will eventually have to become more promotional, but in our opinion now have to at least acknowledge that other structural factors (B2B, e-commerce mix, store closures, etc.) are larger contributors to margins than perhaps initially assumed. A new $1.5B share repurchase authorization poses additional upside to EPS,” Shemesh said in a client note
BofA analyst Jason Haas also hiked the price target to $142.00 per share on the Underperform-rated WSM stock, up from the prior $132.00.
“WSM continues to execute well against a favorable industry backdrop. However, we remain cautious that industry growth will decelerate through 2022 as outsized spending on the home moderates, and as such, reiterate our Underperform rating,” Haas wrote in a memo to clients.
By Senad Karaahmetovic | [email protected]