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Williams-Sonoma (WSM) Hits 52-Week High on Continued Profits - Analyst Blog

Share price of Williams-Sonoma, Inc. ( WSM ) reached a fresh 52-week high of $74.47 on Aug 22, eventually closing at $74.30.

Share price of the company has been continuously on the rise on the back of solid revenues and profits that it has been posting since late 2011. The positive momentum can be attributed to company's product innovation efforts, strong international presence, personalized service and strong marketing and execution. Year to date in 2014, the company's shares have yielded a return of 28.2%.

Williams-Sonoma is about to release its second-quarter fiscal 2014 results on Aug 27, wherein this encouraging trend is expected to continue.

Growth Drivers

Williams-Sonoma expects earnings per share for the upcoming second quarter of 2014 in the range of 49 cents to 52 cents, compared to prior year quarter mark of 49 cents. The company expects net revenue in the range of $1.02 billion to $1.04 billion, which exceeds the year over year level of $982 million. Comparable brand revenue is expected to increase in the range of 4% to 6% during the quarter.

Moreover, Williams-Sonoma has been opening several new stores of late which should drive sales in the upcoming quarters. Earlier this month, the company opened a new West Elm retail store in Kansas City, MO and one in Oklahoma City, OK.

Williams-Sonoma maintains a strong portfolio with some of the most popular brands in home furnishing, namely Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm, PBteen Rejuvenation and Mark and Graham. The company's size gives it a scale advantage and provides the company with flexibility and leverage in marketing spend, which subsequently improves productivity and margins. Headquartered in San Francisco, CA, Williams-Sonoma's leading position as an e-commerce retailer is also commendable.

In addition, Williams-Sonoma enjoys a strong international presence. Other than United States, the company operates retail stores in the Canada, Puerto Rico, Australia, and the United Kingdom. The company is fast expanding its international footprint in order to gain market share and drive revenues.

Later this year, Williams-Sonoma intends to open eight new stores in Australia and new West Elm stores in UK. The company also intends to launch Pottery Barn and Pottery Barn Kids fully-integrated websites in UK. In Jul 2014, the company introduced its first Pottery Barn and Pottery Barn Kids stores in Southeast Asia. These stores are located at Central Square, Bonifacio High Street, Manila, Philippines.

Williams-Sonoma carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Investors interested in the retail sector can also consider stocks like Mattress Firm Holding Corp. ( MFRM ), Barnes & Noble, Inc. ( BKS ) and J. C. Penney Company Inc. ( JCP ). While Mattress Firm Holding sports a Zacks Rank #1 (Strong Buy), Barnes & Noble and J. C. Penney hold a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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