Williams-Sonoma Q2 Earnings: Showing How Retail Can Succeed


Mid cap home products retailerWilliams-Sonoma, Inc (NYSE: WSM) reported Q2 2017 earnings after the Wednesday market close with results exceeding Wall Street expectations. Net revenues grew 3.7% to $1.202 billion versus $1.159 billion with comparable brand revenue growth of 2.8% on top of 0.6% in Q2 2016:

2 nd Quarter Comparable Brand Revenue Growth by Concept*
Q2 17 Q2 16
Pottery Barn 1.2 % (4.8 %)
Williams Sonoma 1.9 % 0.0 %
West Elm 10.1 % 15.8 %
Pottery Barn Kids (3.9 %) 0.1 %
PBteen 0.2 % (5.2 %)
Total 2.8 % 0.6 %

eCommerce net revenues in Q2 17 increased 5.2% to $631 million as eCommerce net revenues generated 52.5% of total company net revenues in Q2 2017 and 51.7% of total company net revenues in Q2 2016. Retail net revenues increased 2.1% to $571 million from $559 million in Q2 2016. Net earnings were $52.917 million versus$51.785 million.

The CEO commented:

Our second quarter results with accelerated revenue and comp growth of 3.7% and 2.8%, respectively, demonstrate that the investments and actions we have undertaken to deliver value, quality and excellent customer service are driving improved top-line performance. These results reflect the strength of our brands and our competitive advantages, as well as our relentless focus on our initiatives to drive innovation and operational excellence. And, we are aggressively building upon these initiatives to further differentiate ourselves and to drive profitable growth.


A technical chart for Williams-Sonoma shows shares finally falling through a key resistance line about two months ago:

A long term performance chart shows Williams-Sonoma at breakeven with Restoration Hardware Holdings Inc (NYSE: RH) in possitive territory while Bed Bath & Beyond Inc (NASDAQ: BBBY) and Pier 1 Imports Inc (NYSE: PIR) have been underperforming since at least 2015:


Finally, here is a quick recap of Williams-Sonomas recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page:

Earnings History10/30/20161/30/20174/29/20177/30/2017
EPS Est. 0.77 1.51 0.49 0.59
EPS Actual 0.79 1.55 0.51 0.61
Difference 0.02 0.04 0.02 0.02
Surprise % 2.60% 2.60% 4.10% 3.40%
EPS TrendCurrent Qtr. (Oct 2017)Next Qtr. (Jan 2018)Current Year (2018)Next Year (2019)
Current Estimate 0.82 1.65 3.56 3.81
7 Days Ago 0.82 1.65 3.56 3.81
30 Days Ago 0.82 1.65 3.56 3.81
60 Days Ago 0.82 1.65 3.56 3.82
90 Days Ago 0.82 1.65 3.56 3.82

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