It may seem odd to talk about Christmas in late March, but Williams-Sonoma (NYSE:WSM) delivered a nice belated gift to shareholders with a strong quarterly report.
Sales at this higher-end retailer of home goods rose more than 12% in the fourth quarter, with nearly 6% same-store growth across the chain. Growth was strongest once again in the outlets, but the core Williams-Sonoma and Pottery Barn nameplates did very well.
If you exclude a charge related to the consolidation of the failed Hold Everything concept, net earnings were up more than 13%, and earnings per share were up nearly 15%. Gross margins were down slightly in the quarter (because of higher shrinkage and shipping costs), but lower employee benefits expense helped the sales, general, and administrative expenses line.
Cash continues to roll into this company, and it's going to start sharing more of it with its investors. Not only did the company announce a new 2 million-share repurchase authorization, but it also initiated a dividend.
That's all well and good, but it's pretty dry stuff, right? What interests me more about this name is that management keeps looking to add new concepts to what's an already strong franchise. There's the West Elm brand, which is being rolled out slowly, as well as a new Williams-Sonoma Home concept and some outdoor and additional bed/bath merchandise.
Of course, multiline concepts don't always set the world on fire -- see also Gap (NYSE:GPS) and Limited Brands (NYSE:LTD) -- and I suppose there's a theoretical possibility that companies like Target (NYSE:TGT), IKEA, or a revitalized Pier 1 (NYSE:PIR) could become more competitive in Williams-Sonoma's targeted market. But I'm not holding my breath.
In the meantime, I'm going to keep waiting in the hopes that Williams-Sonoma stumbles or otherwise ticks off the Street and sends the shares lower. After all, you don't often see Williams-Sonoma's kitchenware on sale, and that seems to be true for the stock as well.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
