NEW YORK (TheStreet) - Williams-Sonoma (WSM - Get Report) shares surged higher in after-hours trading after the upscale housewares and home furnishing company beat Wall Street earnings estimates and raised its full-year guidance.
The San Francisco-based company reported net income of $56.7 million, or 58 cents a share. Revenue rose 11.3% to $1.05 billion. Analysts, according to Thomson Reuters, expected the company to post earnings of 55 cents a share on revenue of $1.04 billion.
Williams-Sonoma, which also owns West Elm and the ever popular Pottery Barn brands, reported strong same-store sales growth of 8.2%, fueled by its growth brand, West Elm and supported by consumers' strong appetite for home furnishings.
However, the company's flagship stores though saw just 1.4% comp growth in the quarter. Operating margin in the quarter rose to 8.8% compared to 8.4% in the year earlier quarter, however gross margin slipped to 38.6% compared to 39% in the same period.Shares were rising 5% to $58.30.
Williams-Sonoma raised full-year guidance. It now expects full-year revenue between $4.29 billion and $4.35 billion slightly above the $4.26 billion to $4.34 billion, it said during last quarter's earnings report. Revenue is based on comp growth between 5% and 7%, the company said. Williams-Sonoma raised its forecast for adjusted earnings per share to a range of $2.76 and $2.83 a share, up from $2.69 to $2.79 a share. Fourth quarter diluted earnings is expected to be between $1.30 and $1.37 a share, with comp sales growth between 3% and 6%. "Our strong third quarter and our performance year-to-date illustrate the power of our business model and the relevancy of our brands," Laura Alber, Williams-Sonoma's president and CEO said in the earnings release. "We delivered an 11% increase in revenue and EPS growth in excess of 18%. Importantly, we delivered this revenue growth and accompanying operating margin expansion while simultaneously investing in our multi-faceted growth initiatives." "We believe we are well-positioned heading into the holiday season and will continue to execute our key strategies to deliver an exceptional experience for our customers," Alber said. "We are focused on generating top-line results in conjunction with operational and capital discipline to deliver long-term shareholder value." Written by Laurie Kulikowski in New York.
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