Please ensure Javascript is enabled for purposes of website accessibility

Williams-Sonoma Starts the Fiscal Year Strong, Raises Guidance

By Steve Symington - May 24, 2018 at 9:06PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The home-furnishings retailer delivered broad comparable-sales gains from each of its store concepts.

Williams-Sonoma (WSM -2.40%) announced better-than-expected fiscal first-quarter 2018 results on Wednesday after the market closed, highlighting accelerating e-commerce sales growth and solid growth across its core retail brands. Shares soared as much as 14% early Thursday before closing up nearly 6%. Let's browse the aisles to get a better idea of what the home-furnishings specialist accomplished over the past few months, as well as what investors should be watching in the quarters ahead.

Interior of a Pottery Barn store with wood floors and ceiling beams


Williams-Sonoma results: The raw numbers


Fiscal Q1 2018*

Fiscal Q1 2017

Year-Over-Year Change


$1.203 billion

$1.112 billion


GAAP net income

$45.2 million

$39.6 million


GAAP earnings per diluted share





What happened with Williams-Sonoma this quarter?

  • Adjusted for one-time items like acquisition expenses, Williams-Sonoma's non-GAAP earnings grew 31.4% year over year, to $0.67 per share.
  • These results compared favorably to Williams-Sonoma's latest guidance, which was provided last quarter and called for adjusted earnings per share of $0.55 to $0.60 on revenue of $1.135 billion to $1.170 billion.
  • Comparable-brand revenue increased 5.5%, above the high end of guidance for a range of 2% to 5%.
  • By retail concept, comparable-brand revenue grew 2.7% at Pottery Barn, 9% at West Elm, 5.6% at Williams Sonoma, and 5.3% at Pottery Barn Kids and Teen.
  • E-commerce net revenue grew 11.3%, to $646 million, or 53.7% of total sales, up from 52.2% last quarter.
  • Retail net revenue climbed 4.9%, to $557 million.
  • The company repurchased 732,000 shares of stock for $38 million during the quarter at an average cost of $51.53 per share. That left $481 million remaining under its current repurchase authorization.

What management had to say

Williams-Sonoma CEO Laura Alber stated:

Following a robust fourth quarter, we saw continued strength in the first quarter. We achieved strong results against our guidance range across all metrics, with our e-commerce revenues outpacing to almost 54% of our total revenues. Our customer growth continued to trend positively for both new and existing customers, demonstrating the success of our balanced customer acquisition strategy. These results speak to the power of our established multi-channel model, distinctive brand portfolio and world-class customer service heritage –- all of which are our company's competitive strengths. 

Looking forward

For the fiscal second quarter of 2018, Williams-Sonoma expects revenue in the range of $1.25 billion to $1.275 billion, assuming comparable-brand revenue growth of 3% to 5%. That should translate to adjusted earnings per share of $0.65 to $0.70.

As such, Williams-Sonoma boosted its full fiscal-year guidance to call for total revenue of $5.495 billion to $5.655 billion (an increase of $20 million from both ends of its previous range), and continues to expect comparable-brand revenue of 2% to 5%. On the bottom line, that should mean fiscal 2018 adjusted earnings per share in the range of $4.15 to $4.25, or a $0.03-per-share increase from both ends of its prior outlook.

In the end, there was nothing not to like in this quarterly beat-and-raise scenario from Williams-Sonoma. I think the market is right in bidding the stock up Thursdsay in response.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Williams-Sonoma, Inc. Stock Quote
Williams-Sonoma, Inc.
$123.07 (-2.40%) $-3.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.