Williams-Sonoma Earnings: An Early Look
Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Williams-Sonoma is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Premium home furnishings took a back seat to economic necessity during the recession, and even high-quality companies like Williams-Sonoma couldn't weather the housing storm unscathed. Now that home prices are coming back, can the company follow suit? Let's take an early look at what's been happening with Williams-Sonoma over the past quarter and what we're likely to see in its quarterly report on Tuesday.
Stats on Williams-Sonoma
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Williams-Sonoma deliver the goods this quarter?
Analysts have generally held their views on Williams-Sonoma fairly stable over the past few months, cutting just a penny per share off earnings estimates for the just-ended quarter and $0.02 per share from their fiscal-year 2014 calls. The shares have done reasonably well, climbing almost 5% since mid-December.
Williams-Sonoma has already given investors some information about the holiday quarter, having given early guidance back in January. The company said that holiday sales rose 4.8%, but fears that net income would come in below expectations sent shares falling after the announcement.
Still, backward-looking numbers tell only part of the story. Throughout the industry, Williams-Sonoma and its rivals are working hard to expand their reach, with Williams-Sonoma moving into the Australian market, where real estate has performed very well. Restoration Hardware has been expanding rapidly, trying to build back up to the levels it reached during the housing boom before tough times forced the company to accept a deal to go private in 2008. It has sacrificed margins in order to accelerate growth. Meanwhile, Bed Bath & Beyond continues to command high margins and holds the leadership role in all-purpose home furnishings for all demographics.
In its quarterly report, watch for Williams-Sonoma to discuss the broad implications of consumer trends among its higher-end customer base, including income tax increases. If the company's core customers start to retrench, then Williams-Sonoma might have trouble reigniting growth going forward.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
Click here to add Williams-Sonoma to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article Williams-Sonoma Earnings: An Early Look originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Bed Bath & Beyond and Williams-Sonoma. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.