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Williams-Sonoma (WSM) Q4 Earnings: What's in the Cards?

Williams-Sonoma, Inc.WSM is set to report fourth-quarter fiscal 2015 results on Mar 16, after market close. Last quarter, the company posted a positive surprise of 8.45%. Let's see how things are shaping up for this announcement.

Factors to Consider

This leading specialty retailer of home furnishing products reported better-than-expected earnings and revenues in the first three quarters of 2015. Top-line growth reflects the competitive advantage from the company's multi-brand/multi-channel business model. Moreover, its e-commerce business is gaining traction. The successful launch of new products and stores is also contributing to its revenues. These tailwinds are expected to continue and drive earnings and revenues in the to-be reported quarter. Williams-Sonoma launched several products in the fourth quarter.

Williams-Sonoma expects fourth-quarter 2015 earnings per share in the range of $1.53 to $1.62, higher than $1.52 earned in the fourth quarter of 2014.

The company expects net revenue for the quarter in the range of $1.575 billion to $1.630 billion. Comparable brand revenues are expected to increase in the range of 2% to 5%.

However, earnings and revenues are likely to be hurt by the West Coast port disruptions. The company incurred higher costs to mitigate port disruptions while fulfilling customer demand, which hurt margins since fourth-quarter 2014. These headwinds may continue to hurt margins in the fourth quarter.

Earnings Whisper?

Our proven model does not conclusively show that Williams-Sonoma is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: Its Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.59.

Zacks Rank: Williams-Sonoma holds a Zacks Rank #4 (Sell). We caution against stocks with Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies in consumer discretionary sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:

American Public Education, Inc. APEI with Earnings ESP of +11.11% and a Zacks Rank #1 (Strong Buy)

Central Garden & Pet Company CENT with an Earnings ESP of +1.69% and a Zacks Rank #1

Hasbro Inc. HAS with an Earnings ESP of +8.7% and a Zacks Rank #3 (Hold)

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AMER PUB EDUCAT (APEI): Free Stock Analysis Report

CENTRAL GARDEN (CENT): Free Stock Analysis Report

WILLIAMS-SONOMA (WSM): Free Stock Analysis Report

HASBRO INC (HAS): Free Stock Analysis Report

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Zacks Investment Research

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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