Life as a publicly traded company in the retail sector isn't
easy. Business ebbs and flows with the economy. Sometimes
consumers are in the mood to spend; sometimes they're not. And
their tastes change like the wind.
After a sharp pullback in 2011 that saw home goods
) correct 39%, the stock has regained Wall Street favor as it
flirts with new highs. The stock begins trading ex-dividend
Thursday and currently yields 2.4%.
No surprise, really, because fundamentals continue to improve.
The owner of the Williams-Sonoma, Pottery Barn, Rejuvenation,
West Elm and Mark and Graham brands continues to benefit from a
multi-distribution channel model. Williams-Sonoma sells its wares
via seven e-commerce websites, eight direct-mail catalogs and 581
Shares surged 10% on March 20 after the company reported solid
earnings, a dividend hike and a new share repurchase program.
Fourth-quarter profit rose 15% from a year ago to $1.34 a share.
Sales rose 11% to $1.41 billion, the third straight quarter of
accelerating sales growth. The e-commerce business was the big
winner in Q4, with revenue up 24% to $576 million.
Wall Street also cheered news of a 41% dividend increase to 31
cents a share. The company also announced a three-year $750
million share repurchase program.
Earlier this month, Citi added Williams-Sonoma to its
top-picks list, citing continued growth opportunities
The stock's 10-week moving average around 49 currently sits
about 1 point from the stock's last breakout area of 48.17. The
10-week line is a logical support level for the stock. If
Williams-Sonoma closes within 1% of last week's closing price of
52.28, a three-weeks-tight pattern would be in place.