Williams-Sonoma (NYSE: WSM) released fiscal first-quarter 2019 results on Thursday after the market closed, trouncing expectations and building on the momentum we saw last quarter, when the home-furnishings retailer outlined efforts to position itself to capitalize on a number of compelling strategic, longer-term growth initiatives. The company also noted its strength has extended so far into the current fiscal second quarter, and raised its full-year earnings outlook to boot.
With the stock up 12% in after-hours trading as of this writing, let's dig in for a better idea of how Williams-Sonoma started the new year.
Continue Reading Below
Williams-Sonoma results: The raw numbersMetric
Fiscal Q1 2019*
Fiscal Q1 2018
GAAP net income
GAAP earnings per diluted share
What happened with Williams-Sonoma this quarter?Adjusted for one-time items, Williams-Sonoma’s (non-GAAP) earnings climbed 21% year over year to $0.81 per share. As of last quarter, the company no longer provides specific quarterly guidance (opting instead to update its full-year outlook as needed). So for perspective, and though we don’t usually pay close attention to Wall Street’s demands, most analysts were modeling lower adjusted earnings of $0.69 per share on revenue of $1.23 billion.Comparable-brand revenue growth accelerated to 3.5% (from 2.4% last quarter), including 1.5% growth from Pottery Barn, 11.8% growth from West Elm, a 1.6% decline from Williams Sonoma, and 1.2% growth from Pottery Barn Kids & Teen.What management had to say
CEO Laura Alber stated:
Alber added that with their "strong start to the year and the strength we are seeing early in the second quarter," Williams-Sonoma now expects adjusted EPS in the range of $4.55 to $4.75 for the full fiscal-year 2019, marking an increase of a nickel per share from both ends of its previous outlook. The company simultaneously reiterated its guidance for fiscal 2019 revenue of $5.67 billion to $5.84 billion, which still assumes comparable-brand revenue growth of 2% to 5%.
Over the longer term, Williams-Sonoma also says it's targeting growth in both total net revenue and adjusted operating income in the mid- to high-single-digit percent range, as well as "above industry average" returns on invested capital.
In the end, it's hard to argue with this beat-and-raise performance from Williams-Sonoma. And the market is bidding up shares accordingly.
10 stocks we like better than Williams-SonomaWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Williams-Sonoma wasn't one of them! That's right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of March 1, 2019