Williams-Sonoma Beats on Both Top and Bottom Lines

Williams-Sonoma (NYS: WSM) reported earnings on May 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 5 (Q1), Williams-Sonoma beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share increased significantly. GAAP earnings per share grew significantly.


Gross margins dropped, operating margins increased, net margins expanded.

Revenue details
Williams-Sonoma logged revenue of $887.8 million. The 22 analysts polled by S&P Capital IQ foresaw sales of $868.1 million on the same basis. GAAP reported sales were 8.6% higher than the prior-year quarter's $817.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.41. The 24 earnings estimates compiled by S&P Capital IQ forecast $0.36 per share. Non-GAAP EPS of $0.41 for Q1 were 21% higher than the prior-year quarter's $0.34 per share. GAAP EPS of $0.40 for Q1 were 33% higher than the prior-year quarter's $0.30 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 37.6%, 20 basis points worse than the prior-year quarter. Operating margin was 7.2%, 30 basis points better than the prior-year quarter. Net margin was 4.4%, 60 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $937.1 million. On the bottom line, the average EPS estimate is $0.47.

Next year's average estimate for revenue is $4.27 billion. The average EPS estimate is $2.79.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 263 members out of 357 rating the stock outperform, and 94 members rating it underperform. Among 98 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give Williams-Sonoma a green thumbs-up, and 11 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Williams-Sonoma is hold, with an average price target of $50.43.

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The article Williams-Sonoma Beats on Both Top and Bottom Lines originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Williams-Sonoma. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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