Williams-Sonoma Earnings Preview

Investors are on the edge of their collective seats, hoping that Williams-Sonoma (NYS: WSM) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, March 8. 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.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Williams-Sonoma with 12 of 22 analysts rating it hold. Analysts don't like Williams-Sonoma as much as competitor Pier 1 Imports overall. Eight out of 10 analysts rate Pier 1 Imports a buy compared to nine of 22 for Williams-Sonoma. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $1.25 billion in revenue this quarter. That would represent a rise of 4.2% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.13 per share. Estimates range from $1.10 to $1.15.

What our community says:
CAPS All-Stars are solidly behind the stock, with 79.4% awarding it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars, as 68.5% give it an "outperform" rating. Williams-Sonoma's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Williams-Sonoma's profit has risen year-over-year by an average of 34.2% over the past five quarters. Revenue has now gone up for three straight quarters.

Now, a look at how efficient management has been at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. The company's gross margins have been increasing year-over-year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. See how Williams-Sonoma has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

38.3%

37.9%

38.4%

42.3%

Operating Margin

7.9%

7.9%

6.7%

15.4%

Net Margin

5.0%

4.8%

4.1%

9.5%

One final thing: If you want to keep tabs on Williams-Sonoma movements, and for more analysis on the company, make sure you add it to your Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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