Williams-Sonoma Pops on Earnings Beat, Analysts Praise 'Strong' Execution

© Reuters. Williams-Sonoma (WSM) Pops on Earnings Beat, Analysts Praise 'Strong' Execution

By Senad Karaahmetovic

Shares of Williams-Sonoma (NYSE:WSM) are trading 2.8% higher in premarket Thursday after the consumer retail company that sells kitchenware and home furnishings reported results.

Adjusted EPS came in at $3.87 per share to beat the $3.53 estimate while revenue was reported at $2.14 billion, better than the $2.03 billion consensus. The adjusted operating margin was reported at 17.1%, again better than the 16.4% consensus. Comparable sales were +11.3%, crushing the estimate of +5.85%.

"We are reiterating our fiscal year 2022 and long-term financial outlook of mid-to-high single digit annual net revenue growth, increasing revenues to $10 billion by fiscal year 2024, and operating margins relatively in-line with our fiscal year 2021 operating margin,” the company said on the outlook front.

Laura Alber, President and Chief Executive Officer of the company, noted that the results were driven by “strong order fulfillment, positive demand comps, and our successful continued elimination of site-wide promotions.”

For a KeyBanc analyst, WSM’s Q2 report is a “notable standout in a sector that has been one of the weakest within our coverage.”

“We raise estimates given the positive momentum heading into 2H. While the industry continues to face risks (from a reversal of pandemic spending behavior and increased promotional activity), we believe WSM is positioned for share gains in 2H,” the analyst said in a note.

A Telsey Advisory Group analyst raised the price target to $195 from $165 after “strong” results.

“While the consumer environment remains choppy, Williams-Sonoma continues to generate demand growth and gain share in the category,” she wrote in a client note.