Williams-Sonoma Hits 52 Week High on Strong Q4 - Analyst Blog

On Mar 13, 2014, shares of Williams-Sonoma, Inc. WSM reached a 52-week high of $65.87 on the back of solid fourth quarter 2013 results and a dividend hike. Shares eventually closed at $64.74, representing a year-to-date return of around 10.6%.

Share Price Drivers

Share price of Williams-Sonoma rose sharply following the release of its fourth quarter 2013 results on Mar 12, as the company outperformed the retail industry. The rise was also driven by a 6% hike in dividend, announced on the same day in a separate press release.

This well-known specialty retailer of home products reported adjusted earnings of $1.38 per share in the fourth quarter of 2013, beating the Zacks Consensus Estimate of $1.35 per share by 2.2% on the back of better-than-expected sales. Earnings increased 2.99% from the comparable prior-year quarter level of $1.34 on the back of solid top-line growth and decline in expenses. Excluding the additional week in the fourth quarter of 2012, earnings increased 8.7%.

Net revenue of $1.47 billion in the fourth quarter of 2013 beat the Zacks Consensus Estimate of $1.43 million by 2.8%. Net revenue grew 4.3% year over year, driven by solid increase in comparable brand revenues. Excluding the additional week in the fourth quarter of 2012, net revenue rose 10.0%.

Williams-Sonoma also provided an encouraging outlook for first quarter and full year 2014. For the first quarter of 2014, the company expects net revenue in the range of $920 million to $940 million. Comparable brand revenues are expected to increase in the range of 4% to 6%. Earnings per share are expected to be in the range of 41 cents to 44 cents in the quarter, higher than the prior year quarter level of 40 cents.

For 2014, Williams-Sonoma expects to report adjusted earnings per share in the range of $3.05 to $3.15, higher than adjusted earnings of $2.84 per share in 2013. The company expects to generate net revenue in the range of $4.63 billion to $4.71 billion. Comparable brand revenues are expected to grow in the range of 5% to 7%.

Williams-Sonoma carries a Zacks Rank #3 (Hold).

Two other companies that recently reported their fourth quarter results and surpassed both the top and bottom line estimates include Fortune Brands Home & Security, Inc. FBHS and Masco Corporation MAS. Another company, Home Depot Inc. HD managed to beat the Zacks Consensus Estimate for earnings in the fourth quarter of 2013.