Free Research Report as Williams-Sonoma’s Revenues Grew 4.3%; EPS Advanced 8%

Stock Monitor: RH Post Earnings Reporting

LONDON, UK / ACCESSWIRE / December 29, 2017 / Active-Investors.com has just released a free earnings report on Williams-Sonoma, Inc. (NYSE: WSM). If you want access to this report all you need to do is sign up now by clicking the following linkwww.active-investors.com/registration-sg/?symbol=WSM. Williams-Sonoma reported its third quarter fiscal 2017 operating results on November 16, 2017. Register today and get access to over 1,000 Free Research Reports by joining our site below:www.active-investors.com/registration-sg.

Active-Investors.com is currently working on the research report for RH (NYSE: RH), which also belongs to the Services sector as the Company Williams-Sonoma. Do not miss out and become a member today for free to access this upcoming report at: www.active-investors.com/registration-sg/?symbol=RH.

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Williams-Sonoma most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below: www.active-investors.com/registration-sg/?symbol=WSM.

Earnings Highlights and Summary

For the third fiscal quarter ended October 29, 2017, Williams-Sonoma’s net revenues grew 4.3% to $1.30 billion versus $1.25 billion in Q3 2016 with comparable brand revenue growth of 3.3% compared to a decline of 0.4% in the year ago corresponding period. The Company’s reported quarter net revenues reflected an estimated $7.0 million impact of lost sales associated with the hurricanes in Texas, Florida, and Puerto Rico.

During Q3 2017, Williams-Sonoma’s gross margin was 35.9% versus 36.8% in Q3 2016. The Company’s occupancy costs of $171 million versus $168 million in the year ago same period leveraged 30-basis points during the third quarter. The 90-basis points of gross margin deleverage was primarily driven by lower selling margins.

For Q3 2017, Williams-Sonoma’s operating margin was 8.5% versus 8.8% in Q3 2016. Excluding severance-related reorganization charges, non-GAAP operating margin was 8.9% in the year ago corresponding period.

Williams-Sonoma’s net income was $71.31 million, or $0.84 per diluted share, in Q3 2017 compared to earnings of $69.38 million, or $0.78 per diluted share. The Company’s reported quarter EPS reflected an unfavorable impact of approximately $0.02 from the impact of lost sales associated with the hurricanes.

Williams-Sonoma’s Segment Results

The ecommerce segment’s net revenues increased 6.4% to $690 million in Q3 2017 versus $649 million in Q3 2016. The segment’s net revenues generated 53.1% of total Company net revenues in the reported quarter and 52.1% of total Company net revenues in the year ago comparable period. During Q3 2017, operating margin in the ecommerce channel was 20.7% versus 23.1% in Q3 2016. The deleverage in operating margin was primarily driven by lower selling margins from the Company’s strategic decision to provide value to its customers through competitive pricing and reduced shipping fees as well as higher shipping costs to ensure a superior customer delivery experience. Williams-Sonoma also incurred higher digital advertising costs to support its investment in new customer acquisition.

The Retail segment’s net revenues grew 2.1% to $609 million in Q3 2017 from $597 million in Q3 2016. Operating margin in the retail channel was 7% in the reported quarter versus 7.9% in the year earlier same quarter. This decrease in operating margin was primarily driven by higher employment expenses and to support the Company’s new stores across the West Elm, Pottery Barn and Rejuvenation brands. The retail operating margin also reflected an approximately 20-basis point impact in lost sales from the hurricane.

Cash Matters

Williams-Sonoma ended Q3 2017 with a cash balance of $91 million versus $75 million last year, and the Company had $170 million outstanding under its revolving credit facility at the end of the reported quarter.

Williams-Sonoma’s Merchandise inventories at the end of Q3 2017 increased 10.6% to $1.18 billion from $1.06 billion at the end of Q3 2016. A large portion of this inventory growth, however, was associated with inventory that is in-transit and not yet received at the Company’s distribution centers.

Stock Repurchase Program

During Q3 2017, Williams-Sonoma repurchased approximately 1.3 million shares of common stock at an average cost of $46.84 per share and a total cost of approximately $61 million. As of October 29, 2017, there was approximately $256 million remaining under the Company’s current stock repurchase program.

Outlook

For the fourth quarter of 2017, Williams-Sonoma is forecasting net revenues in the range of $1.61 billion to $1.68 billion with comparable brand revenue growth now in the range of 2% to 6%. The Company expects its upcoming quarter operating margin to be below last year, and is estimating diluted earnings per share to be in the band of $1.49 to $1.64.

For the full year 2017, Williams-Sonoma raised its revenue guidance. The Company is projecting revenues to be in the band of $5.23 billion to $5.29 billion with comp brand revenue growth in the range of 2% to 4%. Williams-Sonoma is anticipating operating margin to be 9% to 9.2%, and its tax rate to improve to a range of 35% to 36%.

Stock Performance Snapshot

December 28, 2017 – At Thursday’s closing bell, Williams-Sonoma’s stock fell 1.28%, ending the trading session at $52.58.

Volume traded for the day: 746.24 thousand shares.

Stock performance in the last month – up 11.82%; previous three-month period – up 3.77%; past twelve-month period – up 9.06%; and year-to-date – up 8.66%

After yesterday’s close, Williams-Sonoma’s market cap was at $4.40 billion.

Price to Earnings (P/E) ratio was at 14.90.

The stock has a dividend yield of 2.97%.

The stock is part of the Services sector, categorized under the Home Furnishing Stores industry. This sector was up 0.1% at the end of the session.

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