Williams-Sonoma, Inc. WSM,
through its notable brands Pottery Barn, Pottery Barn Kids and
PBteen, unveiled new collection, with the well-known resort wear
brand, Lilly Pulitzer. The company will incorporate Lilly
Pulitzer’s signature patterns and prints in their quality home
This collection, which has more than 100 variants, includes bedding
assortment, duvets, comforters and quilts in 14 different Lilly
Pulitzer prints, sheeting and accent pillows along with bath
furnishings. Moreover, the recent assortment will allow customers
to decorate their homes with Lilly’s Palm Beach style.
Initiatives to Drive Growth
Williams-Sonoma is one of the largest e-commerce retailers in the
United States. Its innovative efforts helped it drive e-commerce
growth to an all-time high of 55% of the total revenues in the
third quarter of fiscal 2018.
The company keeps on collaborating with celebrated brands and
designers to offer exclusive home furnishings products to meet
consumers’ changing preference. It believes that
collaborations with designers and brands attract new customers,
invent trends in home furnishing and widen social media
In the first nine months of fiscal 2018, the company’s total
revenues increased 6.2% to $3,835 million. Also, comps grew 4.4% in
the same period. The upside was driven by a 9.4% improvement in
e-commerce business as well as growth across all brands.
Notably, comps grew 2% and 3.4% in Pottery Barn, and Pottery Barn
Kids and Teen, respectively, from negative 0.2% and negative 3%
recorded in the year-ago period. For fiscal 2018, the company
expects total revenues of $5,565-$5,665 million, reflecting 4.2-7%
growth from fiscal 2017. Also, comps are anticipated to grow 3-5%
(versus 3.2% reported a year ago).
However, shares of Williams-Sonoma have underperformed its industry
in the past year. The company has been facing higher costs related
to continued investments in e-commerce. Increased spending on
digital advertising and higher employment-related costs have been
pressurizing margins. In the first nine months of fiscal
2018, its non-GAAP operating margin contracted 30 bps to
Nonetheless, the company took initiatives to achieve retail
transformation and excellence by offloading the fleet of
underperforming stores, and selectively investing in new stores,
remodels and relocations while elevating the store
Zacks Rank & Stocks to Consider
Williams-Sonoma currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the Retail-Wholesale sector are RH RH,
Haverty Furniture Companies, Inc. HVT, and Darden Restaurants, Inc.
DRI. While RH currently sports a Zacks Rank #1 (Strong Buy),
Haverty and Darden carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks
RH’s earnings for fiscal 2019 are expected to increase
Haverty surpassed earnings estimates in each of the trailing four
quarters, the average positive surprise being 19.3%.
Darden’s earnings for the current year are expected to increase
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