In this segment from the Motley Fool Money, Chris Hill is joined by Seth Jayson, Andy Cross, and Ron Gross as they cover the latest news from Williams-Sonoma (NYSE:WSM), which is enjoying solid results at its eponymous chain and its West Elm stores. And despite weakness with the Pottery Barn brand, there is reason to believe this stock could be a long-term market beater.

A full transcript follows the video.

This video was recorded on March 17, 2017.

Chris Hill: A mixed holiday quarter for Williams-Sonoma. Overall profits came in higher than expected, but Williams-Sonoma is the parent company of Pottery Barn. Andy, they are struggling over there at Pottery Barn.

Andy Cross: Yeah, they are. Relatively, they did, as you mentioned, better than some of us were expecting. But their brand growth really has been falling. Pottery Barn was down 4%, and Pottery Barn Kids and Teens are both down, 5% and 8% respectively. 

West Elm continues to be the bright spot at Williams-Sonoma. Here's what you have with this store. You have a loyal customer base that loves to shop at Williams-Sonoma. They tend to be older demographic, wealthier demographic. They are competing with the Amazons and Wayfairs of the world. Most of the products you buy at Williams-Sonoma you can only buy at Williams-Sonoma; same with West Elm. With West Elm, they're actually having more success going into the younger demographic markets like college-aged kids. And you have a business that's basically flat. GDP growth kind of levels. They're very diligent on the cost side. It generates healthy profits. It'll probably grow earnings in the mid-single digits this year. They generate a lot of cash, and they buy back stock and they invest it well. The stock sells at 14 times earnings.

So I think you have a market-beater from here on out. The stock is around $50. They bought back 13% of the shares over the last few years. You have a decent value play, and maybe you get some leverage as they continue to expand internationally. I think you have a good shot at some good, healthy market-beating returns, considering that the market is going to grow 7% a year. I think they can beat that.

Hill: They also do a good job across the omnichannel, when you think about it. A lot of bricks-and-mortar retailers struggle. They do a good job with their stores, with their e-commerce, with the catalogs.

Cross: Yeah, and they just brought in, just this week, announced a new leader for Pottery Barn. The longtime leader there, who I think has been there 20 years, is stepping down and someone else is coming in. So, breathing some new life into a brand that desperately needs it.

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