), a well known specialty retailer of home products, reported
adjusted earnings (excluding one-time items) of 41 cents per
share in the first quarter of fiscal 2013, up 21% from the
comparable prior-year quarter. The year-over-year surge in
earnings was driven by strong top-line growth in the quarter.
Reported earnings beat the Zacks Consensus Estimate of 36 cents
per share by 13.9%.
The company reported net revenue of $888 million in the first
quarter of fiscal 2013, up 8.6% year over year, driven by high
single-digit increase in comparable brand revenues. Net revenue
beat the Zacks Consensus Estimate of $868 million by 2.3%.
Comparable brand revenues (including retail comparable store
sales, direct-to-customer sales, and other adjustments like
shipping fees, sales returns and other discounts associated with
current period sales) grew 7.2% compared with a 5.4% increase in
the prior-year quarter, as all the brands witnessed positive
comparable brand revenues.
The company's net revenue comprises direct-to-customer net
revenue and retail net revenue. The direct-to-customers net
revenue is generated from sales through e-commerce websites,
catalogs and shipping fees. Retail net revenue is generated from
sales in retail stores and shipping fees for home delivery of
During the first quarter of 2013, direct-to-customer net revenue
was $419 million, up 11.9%, due to solid sales across all the
brands, particularly in Pottery Barn, West Elm, Williams-Sonoma
and Pottery Barn Kids. Retail net revenue grew 5.8% to $469
million in the quarter on the back of strong international
franchise operations, which include Pottery Barn and West Elm.
Selling, general and administrative (SG&A) expenses increased
5.5% from the prior-year quarter to $267 million. However, as a
percentage of revenues, SG&A improved 80 basis points to
30.1% in the quarter on the back of low advertising expenses. The
company's adjusted operating margin of 7.5% was up 60 basis
points year over year on the back of significant increase in the
direct-to-customer channel operating margin due to increased
advertising leverage and enhanced selling margin.
During first quarter 2013, the company repurchased common stock
worth $41 million. As of May 5, 2013, the company had $709
million of stock remaining under its $750 million stock
repurchase program announced in Mar 2013.
For the second quarter of 2013, Williams-Sonoma expects to report
adjusted earnings per share in the range of 43 cents to 46 cents.
The company expects to generate net revenue in the range of $920
million to $940 million in the second quarter of 2013. Comparable
brand revenues are expected to grow in the range of 4% to 6%.
For fiscal 2013, the company expects adjusted earnings in the
range of $2.67 to $2.77 and net revenue in the range of $4.22
billion to $4.30 billion.
Williams-Sonoma carries a Zacks Rank #3 (Hold).
Some other retail wholesale stocks that are worth a look
Fortune Brands Home & Security, Inc.
Haverty Furniture Companies Inc.
) carrying a Zacks Rank #1 (Strong Buy) and
The Home Depot, Inc.
) holding a Zacks Rank #2 (Buy).
FORTUNE BRD H&S (FBHS): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
HAVERTY FURNIT (HVT): Free Stock Analysis
WILLIAMS-SONOMA (WSM): Free Stock Analysis
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