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Williams-Sonoma (WSM) to Report Q1 Earnings: What to Expect?

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Williams-Sonoma, Inc. WSM is scheduled to report first-quarter fiscal 2022 results on May 25, after the closing bell.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 13.4% but revenues missed the same by 2.8%. On a year-over-year basis, earnings and revenues of this multi-channel specialty retailer of premium quality home products improved 37.2% and 9.1%, respectively.

Markedly, Williams-Sonoma reported better-than-expected earnings in the last four quarters, with the average being 26.4%.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has increased to $2.99 from $2.97 over the past seven days. The estimated figure indicates an increase of 2.1% from $2.93 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $1.83 billion, suggesting 4.6% growth from the year-ago figure of $1.75 billion.

WilliamsSonoma, Inc. Price and EPS Surprise

WilliamsSonoma, Inc. Price and EPS Surprise
WilliamsSonoma, Inc. Price and EPS Surprise

WilliamsSonoma, Inc. price-eps-surprise | WilliamsSonoma, Inc. Quote

Factors to Note

Higher spending on home improvement products, and solid repair & remodeling activities, brand strength, accelerating growth initiatives and higher e-commerce growth are anticipated to have benefited Williams-Sonoma’s fiscal first-quarter performance.

The accelerating online sales trend is expected to have meaningfully contributed to its top line in the to-be-reported quarter.

The multi-channel multi-brand platform, strong e-commerce growth, solid execution of strategic initiatives, digital leadership, product innovation, retail transformation and operational excellence across businesses are also expected to have provided some support to the top line. Also, cross-brand initiatives are expected to have positively contributed to consolidated comps to some extent.

However, supply-chain disruptions and rising raw material and labor costs are likely to have weighed on its quarterly performance.

The Zacks Consensus Estimate for Pottery Barn Kids and Teen’s comps growth is pegged at down 5.3%. The same had improved 27.6% a year ago. In fourth-quarter fiscal 2021, comps declined 6.1% year over year.

The Zacks Consensus Estimate for Pottery Barn’s comps growth is pegged at 4%. The same improved 41.3% a year ago. In fourth-quarter fiscal 2021, comps grew 16.2% year over year.

The Zacks Consensus Estimate for West Elm’s comps growth is pegged at 5.33%. The metric was 29.23% a year ago and 18.3% in the last reported quarter.

The Zacks Consensus Estimate for the namesake brand’s comps growth is pegged at 0.67%. The metric came in at 35.3% a year ago and 4.5% in the last reported quarter.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Williams-Sonoma this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -3.25%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Williams-Sonoma currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some stocks from the broader Retail-Wholesale sector that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat for the to-be-reported quarter:

Designer Brands Inc. DBI has an Earnings ESP of +4.35% and a Zacks Rank #2.

Shares of Designer Brands have declined 27.9% in the past year. DBI’s earnings topped the consensus mark in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 112.8%, on average.

Casey's General Stores, Inc. CASY has an Earnings ESP of +7.07% and a Zacks Rank #3.

Shares of Casey's have declined 8% in the past year. CASY’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, with the average surprise being 21.6%.

AutoZone, Inc. AZO has an Earnings ESP of +2.40% and a Zacks Rank #3.

Shares of AutoZone have gained 34.4% in the past year. AZO’s earnings beat the consensus mark in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 25.9%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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