Williams-Sonoma Earnings: Profit and Revenue Climb Higher

Williams-Sonoma Inc. (NYSE:WSM) reported net income above Wall Street’s expectations for the third quarter. Williams-Sonoma is a retailer of products for the home. The retail segment of its business sells products through five retail store concepts: Williams-Sonoma, Pottery Barn, Pottery Barn Kids, West Elm and Williams-Sonoma Home.

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Williams-Sonoma Inc. Earnings Cheat Sheet

Results: Net income for Williams-Sonoma Inc. rose to $48.9 million (49 cents per share) vs. $43.4 million (41 cents per share) in the same quarter a year earlier. This marks a rise of 12.6% from the year-earlier quarter.

Revenue: Rose 8.9% to $944.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Williams-Sonoma Inc. beat the mean analyst estimate of 45 cents per share. It beat the average revenue estimate of $811.7 million.

Quoting Management: Laura Alber, President and Chief Executive Officer, said, “On behalf of all of us at Williams-Sonoma, Inc., I would first like to express my concern for the welfare of those individuals and families impacted by Hurricane Sandy. While the recent storms have caused some disruptions to our business, our response has been focused on assisting our associates and customers in need.” Alber commented, “During the third quarter, we delivered stronger-than-expected revenues, operating margin and diluted earnings per share. EPS grew 20% on revenue growth of 9%, as comparable brand revenue growth accelerated to 8.5%, from 7.4% last quarter. Importantly, we drove these results while simultaneously investing in our strategic growth initiatives.” Alber continued, “We are proud of our recently announced growth initiatives, including the launch of West Elm Market, a West Elm brand extension, and the launch of Mark and Graham, our new on-line brand, which features personalized gifts and accessories. This week, we announced new Williams-Sonoma branded product lines that represent the next generation in cooking technology. Drawing on over five decades of culinary experience, these introductions in cookware, cooks’ tools, and new tech-driven Williams-Sonoma smart tools represent advancements that will be appreciated by the home cook and professional chef. These Williams-Sonoma branded products are just the beginning of what we will bring to the market over the next several years.” Alber concluded, “We are raising our fiscal year outlook by $0.01 to a non-GAAP EPS range of $2.45 to $2.52 due to our strong results throughout the year. Our guidance includes the impact of the acceleration of our global expansion into Australia in early fiscal 2013, as well as the unexpected impact from the storms.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the second quarter, by 2 cents in the first quarter, and by 4 cents in the fourth quarter of the last fiscal year.

Revenue has risen for the last four quarters. Revenue increased 7.3% to $874.3 million in the second quarter. The figure rose 6.1% in the first quarter from the year earlier and climbed 6.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

Net income has increased 9.4% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 18.9% from the year-earlier quarter.

Looking Forward: The average estimate for the fourth quarter remains unchanged at $1.33 a share. For the fiscal year, the average estimate has moved up from $2.49 a share to $2.54 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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