Williams-Sonoma Enjoys Hot "Weddings Season" Earnings, Sears Sees the Light, and Housing Data Rebounds

The three things you need to know on May 23.

May 22, 2014 at 11:00PM

Take your time to review some recent innovations in burger patties before you try to impress friends at the grill this Memorial Day weekend. Plus, you can look smart by explaining why the Dow Jones Industrial Average (DJINDICES:^DJI) gained 10 points Thursday.

1. Williams-Sonoma earnings look as good as their appliances
It must be wedding season, because the quarterly earnings from Williams-Sonoma (NYSE:WSM) looked pretty to Wall Street. The craft home appliances designer reported a 9.7% rise in revenue from last year to $974.3 million for the first three months of 2014, with profits of $46.2 million that beat analysts' expectations like they were egg whites.

What's impressive is that cool cool outdoor-bar/smoothie-making/charcoal-fired-grills (those aren't actually a real thing, but they should be) and other appliances aren't the only thing attracting customers to the flagship Williams-Sonoma stores. The company's other brands are dominating, too -- Pottery barn sales gained 9.7% and West Elm sales jumped 18.8% last quarter.

The takeaway is that while the winter had been harsh for most big-box retailers (we're looking at you, Wal-Mart, Staples, and Target), the painful weather didn't really hurt luxury retailers. Bag designer Kate Spade enjoyed its best first-quarter sales growth in a few years, while Tiffany saw a 13% sales jump. The enthusiasm around fancy goods sent Williams-Sonoma stock up 8.16% Thursday.

2. Sears Holdings stock sees light at the end of the tunnel
Can this old department-store owner catch a break already? Sears Holdings (NASDAQ:SHLD) announced first-quarter earnings ... sorry, losses ... of $402 million, even worse than last year's $279 million loss. The company highlighted one big positive, though -- Sears stores open at least a year actually grew sales by 0.2% from the year before. Investors were so surprised by the minuscule growth they celebrated with a 4% rise for the stock Thursday.

Sears and Kmart are the assets of the company (we know what you're thinking -- those places still exist?). Once the largest department-store companies in the world, Sears will close 80 more stores this year as most consumers continue to opt for online shopping on their couches (and the rest are at Wal-Mart). To combat this trend, the store has a Costco-style club membership now called "Shop Your Way." These shoppers who push VIP shopping carts (with only one crooked wheel) now account for 74% of sales.
The focus of the past few years has been closing unprofitable stores, selling their snazzy Lands' End brand, selling the decent shopping strip real estate it has, and creating the rewards program. None of these quick fixes will stop the bleeding, which explains why the stock has fallen from over $100 in 2010 to $38.10 on Thursday.

3. Existing-home sales get first win of 2014
The number of the day is 1.3%. That's the increase in home sales in April, to a seasonably adjusted rate of 4.65 million houses changing hands. Although that's slightly below Wall Street's expectations and nearly 7% lower than last April (back when Justin Bieber didn't have a criminal record), investors were pumped for the stat's first rise of this year.

The takeaway is that spring is big for boring baseball "highlights" on ESPN and U.S. home sales -- that's because Mom and Dad like to have moved into a new town and school district before the end of the summer. After all the momentum gained by the housing market in 2013, investors like to see the housing market regroup after the slow, cold-affected winter.

As originally published on MarketSnacks.com

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Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Costco Wholesale and Williams-Sonoma and owns shares of Costco Wholesale and Staples. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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