Williams-Sonoma Q2 Results Beat Street View, Approves $1.25 Bln Stock Buyback; Shares Up 12%

Shares of Williams-Sonoma Inc. (WSM) gained over 12% in extended session Wednesday after the luxury home furnishing retailer’s second-quarter profit trounced Wall Street expectations, driven by strong revenue growth across all brands. The company also announced a new $1.25 billion stock buyback plan.

Second-quarter net earnings were $246.1 million or $3.21 per share, up from $134.6 million or $1.70 per share last year.

Adjusted earnings for the quarter were $3.24 per share, up from $1.80 per share last year. On average, 21 analysts polled by Thomson Reuters expected earnings of $2.60 per share. Analysts’ estimates typically exclude one-time items.

Revenues for the quarter rose 30.7 percent to $1.95 billion from $1.49 billion last year. Analysts had a consensus revenue estimate of $1.81 billion.

The company reported comparable brand revenue growth of 29.8%, including West Elm at 51.1%, Pottery Barn at 29.6%, Pottery Barn Kids and Teen at 18.0%, and Williams Sonoma at 6.4%.

Commenting on the results, CEO Laura Alber said, “We are proud to report another quarter of outperformance with a 30% comp, strong growth across all brands and channels, and 360 basis points of operating margin expansion. These second quarter results demonstrate the success of our growth strategies and the earnings power of our company. We have an advantage in the industry due to our exclusive in-house design capability, our channel strategy which is digital-first but not digital only, and our values – with sustainability and equity underlying all that we do.”

Looking forward to full year 2021, the company now sees high-teens to low-twenties net revenue growth and adjusted operating margin between 16% to 17%. Previously, the company expected low double-digit to mid-teen net revenue growth and year-over-year adjusted operating margin expansion.

Separately, Williams-Sonoma authorized a 20.3% increase in the company’s quarterly cash dividend to $0.71 per share, which is payable on November 26, 2021 to stockholders as of October 22, 2021. The Board also approved a new $1.25 billion stock repurchase authorization.

WSM closed Wednesday’s trading at $170.74, up $1.18 or 0.70%, on the NYSE. The stock further gained $21.26 or 12.45%, in the after-hours trade.

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