Williams-Sonoma (WSM) - Get Williams-Sonoma, Inc. Report shares surged to an all-time high Thursday after the home furnishings brands group smashed Wall Street's earnings forecasts and lifted its full-year sales outlook.
The Pottery Barn and West Elm furniture store brand owners boosted their full-year revenue outlook, with a forecast of "high teens to low twenties" percentage growth, with improving profit margins, after a stronger-than-expected second quarter bottom line of $3.24 per share -- an 80-% increase from last year -- on sales of $1.95 billion.
Comparable store sales at Pottery Barn rose 29.6%, the company said, while West Elm comps were up a staggering 51.1%. Wedding registration sales surged 98% from last year's pandemic trough and Williams-Sonoma's business-to-business unit is on pace to achieve $700 million in revenues this year.
Williams-Sonoma also boosted its dividend by 20%, to 71 cents per share, and authorized a $1.25 billion buyback program.
"These second-quarter results demonstrate the success of our growth strategies and the earnings power of our company," CEO Laura Alber told investors on a conference call late Wednesday. "We have an advantage in our industry due to our exclusive in-house design capability, our channel strategy, which is digital-first but not digital-only, and our values with sustainability and equity underlying all that we do."
"We do not see any evidence that growth trends are waning. And in fact, we see favorability in the macro environment as more people prioritize their homes and home decor," she added. "We believe we are at the intersection of a transformative change that will accelerate the growth of our industry and our market share within the industry."
Williams-Sonoma shares were marked 12.3% higher in early Thursday trading to change hands at $192.50 each, a move that would extend their year-to-date gain to around 90%. The stock hit an all-time high of $204.02 at the start of the session.
"Second quarter earnings were better than expected across the board, continuing the favorable trend in home-related spending across most of our coverage. Encouragingly, drivers such as B2B, incremental advertising, and wedding registry seem positioned to fuel incremental growth beyond nesting trends," said KeyBanc Capital markets analyst Bradley Thomas, who carries a 'sector weight' rating on the stock.
"Given strong trends and the favorable macro environment, management raised 2021 guidance and pulled forward its LT target of $10 billion in revenue to 2024," he added. "We are incrementally positive on WSM’s outlook and look to get more positive at a more attractive valuation."