Shares of Williams-Sonoma spike after raised outlook
By Robert Davis
22:56, 26 August 2021
Investors of Williams-Sonoma were rewarded on Thursday after the company crushed Wall Street’s earnings estimates the previous day and raised its outlook and dividends for the rest of the year.
Shares jumped nearly $15 per-share after the company’s Board of Directors announced they will increase the quarterly dividend by over 20% up to $0.71 per share. This dividend becomes payable on 26 November.
At the same time, the company authorized a $1.25bn share buyback program, superseding the current $560m buyback option the company currently has in effect.
Williams-Sonoma finished Thursday’s trading session up 10% at $186.68.
Earnings details
Williams-Sonoma said in its earnings statement that it made $246mil in profit in fiscal Q2 2021. This translates to an EPS of $3.21 per share for the quarter.
The company also saw its revenues grow 30.7% when compared to this time last year. Sales increased to $1.95bn compared to $1.45bn a year ago.
While Williams-Sonoma said all its channels saw an increase in revenue, its e-commerce channel accounted for 65% of total company revenues in the quarter, according to the earnings.
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Future goals
Williams-Sonoma is an omni-channel retailer for home products. It is currently the world’s largest “digital-first, design-led and sustainable home retailer,” according to its annual statement. The company also operates under similar brands such as West Elm, Pottery Barn, and Pottery Barn Kids.
While some investors may be concerned by the share’s recent price increase, Williams-Sonoma’s chief Executive Laura Amber says she doesn’t see any evidence that growth trends are waning.
“We see favorability in the macro environment as more people prioritize their homes and home décor,” she said in a press release.
At the same time, maintaining liquidity seems to be part of the company’s overall growth strategy. Williams-Sonoma reported holding more than $650mil in cash and an additional $475mil in operational cash flow.