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Williams-Sonoma Shares Rise on Raised Payout, Resumed Buyback

Home-goods retailer Williams-Sonoma's shares rose after the company hiked its dividend and resumed its share buyback.

Shares of Williams-Sonoma  (WSM) - Get Williams-Sonoma, Inc. Report were higher Tuesday after the home-goods retailer said it would hike its quarterly dividend by 10% and resume its share buyback program.

The stock of the San Francisco company at last check was up 5.2% to $104.89. In 2020 through Monday's close, the stock had risen 36%. 

The stock is trading around its 52-week high. It has quadrupled off its 52-week low above $26, set in mid-March.

The company, which also operates Pottery Barn, on Monday said it resumed its buyback and paid down all its short-term debt related to a $500 million revolving-credit line.

The new quarterly dividend, 53 cents a share up from 48 cents, is payable Nov. 27 to holders of record Oct. 23.

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“Our decisions to increase our quarterly dividend, resume our share buyback program and pay down our revolver reflect the strength of our business and financial position, and our commitment to maximizing returns for our shareholders,” said President and Chief Executive Laura Alber in a statement.

In late August the company reported that for the fiscal second quarter ended Aug. 2, net income more than doubled to $1.70 a share from 79 cents in the year-earlier quarter.

Net revenue grew 8.8% to $1.49 billion, driven by a sharp rise in e-commerce. Online sales grew 46% in the quarter and accounted for 76% of revenue. 

Williams-Sonoma will ultimately have fewer stores but better ones, Alber told Jim Cramer on "Mad Money." She said the company had a lot of leverage with its lease negotiations.

“Our strong performance during this pandemic reinforces the relevance of our curated, sustainable products and the power of our digital-first platform," Alber said in the dividend-and-buyback statement.

"We are seeing an inflection point in our business and are more confident than ever in our strategies to deliver strong, long-term growth with increasing profitability."