Williams-Sonoma shares are over 15% up in extended trading: here’s why

Williams-Sonoma Inc (NYSE: WSM) reported its financial results for the second quarter on Wednesday that beat Wall Street estimates. Shares of the company climbed by over 15% in extended trading on raised guidance for the full year.

Financial performance

Williams-Sonoma said its net income in the second quarter printed at $246 million versus the year-ago figure of a sharply lower $134.6 million. On a per-share basis, the retailer earned $3.21 or $3.24 adjusted.

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The California-based company generated $1.95 billion in revenue – a 31% annualised growth from last year’s $1.49 billion. According to FactSet, experts had forecast Williams-Sonoma to post $2.59 of adjusted EPS on $1.8 billion in revenue.

Dividend and share repurchase

On the back of hawkish Q2 performance, Williams-Sonoma’s board authorised another $1.25 billion of stock buyback and raised the quarterly dividend by 20%.

Other notable figures include a year over year increase of 29.6%, 51.1%, and 18% in comparable sales at Pottery Barn, West Elm, and Pottery Barn Kids & Teen, respectively. The namesake brand noted a 6.4% annualised growth in comparable sales.  

The earnings report comes a day after Best Buy posted market-beating results.

Guidance for the full year

For the full financial year, Williams-Sonoma now forecasts its revenue to grow by close to 20% or more. The home furnishings and kitchen-ware company expects its operating margin to stand at about 17% this year on an adjusted basis.

Williams-Sonoma had previously expected to hit the milestone of $10 billion in net revenue over the next five years. In its earnings press release on Wednesday, it expressed confidence that it’ll achieve the target a year earlier.

CEO Laura Alber’s remarks

Commenting on the financial update, CEO Laura Alber said:

“The momentum we are seeing in our business and our winning positioning set us up to continue to take share in a fractured market. We do not see any evidence that growth trends are waning. The macro-environment is also favourable as more people prioritise their homes and home décor. We believe we are at the intersection of a transformative change that will accelerate the growth of our industry and our market share within the industry. In addition, our growth strategies are gaining traction faster than we predicted, and our key differentiators are further distancing us from our competition.”

In separate news, beauty salon company Ulta Beauty also reported its quarterly financial results on Wednesday.