Williams-Sonoma (WSM) Stock Hits 52-Week High Ahead of Second-Quarter Earnings Report

NEW YORK (TheStreet) -- Williams-Sonoma  (WSM) reports second-quarter earnings after the closing bell Wednesday, and here's what analysts are expecting from the housewares company.

The consensus estimate calls for the company to report earnings of 53 cents a share on revenue of $1.05 billion. In the first quarter, Williams-Sonoma reported EPS of 48 cents a share to beat analysts' expectations of 44 cents a share.

The stock hit a new 52-week high of $75.69 ahead of the earnings report Wednesday.

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Separately, TheStreet Ratings team rates WILLIAMS-SONOMA INC as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WILLIAMS-SONOMA INC (WSM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 9.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • WILLIAMS-SONOMA INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WILLIAMS-SONOMA INC increased its bottom line by earning $2.85 versus $2.56 in the prior year. This year, the market expects an improvement in earnings ($3.20 versus $2.85).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 17.0% when compared to the same quarter one year prior, going from $39.47 million to $46.16 million.
  • 41.78% is the gross profit margin for WILLIAMS-SONOMA INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.73% trails the industry average.
  • Compared to where it was 12 months ago, this stock has enjoyed a nice rise of 25.80% which was in line with the performance of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: WSM Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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