E-commerce Business to Aid Williams-Sonoma (WSM) Q2 Earnings


Williams-Sonoma, Inc. (WSM Quick QuoteWSM ) is scheduled to report second-quarter fiscal 2021 results on Aug 25, after the closing bell.

In the last reported quarter, the company’s earnings and revenues surpassed the Zacks Consensus Estimate by 58.4% and 16%, respectively. On a year-over-year basis, earnings and revenues of this multi-channel specialty retailer of premium quality home products improved 295.9% and 41.6%, respectively.

Markedly, Williams-Sonoma reported better-than-expected earnings in the last four quarters, with the average being 56.3%.

WilliamsSonoma, Inc. Price and EPS Surprise WilliamsSonoma, Inc. Price and EPS Surprise

WilliamsSonoma, Inc. price-eps-surprise | WilliamsSonoma, Inc. Quote

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has risen 1.2% to $2.55 over the past 60 days. The estimated figure indicates an increase of 41.7% from $1.80 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.80 billion, suggesting 20.9% growth from the year-ago figure of $1.49 billion.

Factors to Note

Although the global impact of the coronavirus pandemic, stiff competition, and rising raw material and labor costs are expected to have been pressing concerns, a strong housing backdrop is anticipated to have benefited Williams-Sonoma’s fiscal second-quarter performance. A resilient housing market scenario, and solid repair & remodeling activities are expected to have also benefited the company’s performance in the quarter.

Importantly, online sales trends accelerated, which more than offset the lost sales from closed stores. This is expected to have meaningfully contributed to its top line in the to-be-reported quarter.

Its multi-channel multi-brand platform, strong e-commerce growth, solid execution of strategic initiatives, digital leadership, product innovation, retail transformation and operational excellence across businesses are also expected to have provided some support to the top line. Also, cross-brand initiatives are likely to have positively contributed to consolidated comps to some extent.

The Zacks Consensus Estimate for Pottery Barn Kids and Teen’s comps growth is pegged at 17.3%. The metric came in at 4.8% a year ago and 27.6% in the last reported quarter.

The Zacks Consensus Estimate for Pottery Barn’s comps growth is pegged at 27%. The same improved 8.1% a year ago. In the fiscal first quarter, comps grew 41.3% year over year.

The Zacks Consensus Estimate for West Elm’s comps growth is pegged at 23.3%. The metric was 7% a year ago and 51% in the last reported quarter.
The Zacks Consensus Estimate for the namesake brand’s comps growth is pegged at 10%. The metric came in at 29.4% a year ago and 35.3% in the last reported quarter.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Williams-Sonoma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Williams-Sonoma — which shares space with RH (RH Quick QuoteRH ) , At Home Group Inc. (HOME Quick QuoteHOME ) and Ethan Allen Interiors Inc. (ETD Quick QuoteETD ) in the Zacks Retail – Home Furnishings industry — currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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