Williams-Sonoma Results Top Estimates; Boosts Outlook

(RTTNews) - Home furnishing retailer Williams-Sonoma Inc. (WSM) said Wednesday after the markets closed that its first quarter profit rose 17% from last year, helped by higher revenue and improved margins.

The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue. At the same time, the company gave a downbeat forecast for the second quarter, but raised its full year outlook.

Laura Alber, Williams-Sonoma President and Chief Executive Officer, said, "Innovative, high-quality product, personalized service, relevant marketing and strong execution across all brands drove these better than expected results. With 50% of our revenue in the direct channel this quarter, we believe our multi-brand, multi-channel platform is driving consistent market share gains and providing us with a sustainable competitive advantage."

Williams-Sonoma shares are currently gaining 5.90% in after hours trading after closing the day's regular trading session at $63.73, up 33 cents. The shares trade in a 52-week range of $51.70 to $68.05.

For the first quarter ended May 4, 2014, the San Francisco, California-based company reported net income of $46.2 million or $0.48 per share, compared to $39.5 million or $0.40 per share for the year-ago quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.44 per share for the first quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter improved to 37.8% from 37.6% a year earlier, while operating margin increased to 7.6% from 7.2% last year.

Revenues for the first quarter rose 10% to $974.33 million from $887.81 million in the same quarter last year. Twenty-one analysts had a consensus revenue estimate of $941.99 million for the first quarter.

Direct-to-customer net revenues increased 17.2% to $491 million. Retail net revenues for the quarter increased 3.1% to $483 million, mainly driven by Pottery Barn and West Elm.

Comparable brand revenue increased 10% in the first quarter.

During the first quarter, Williams-Sonoma repurchased 840,761 shares of its common stock for about $53 million. As of May 4, $458 million remained under the three-year $750 million stock repurchase program announced in March last year.

Looking forward to the second quarter, the company forecasts revenue of of $1.02 billion to $1.04 billion and earnings of $0.49 to $0.52 per share. Analysts currently expect the company to earn $0.55 per share on revenues of $1.05 billion for the second quarter.

For the fiscal year 2014, the company now expects revenue of $4.645 billion to $4.725 billion and earnings of $3.07 to $3.17 per share. Previously, the company expected revenue of $4.63 billion to $4.71 billion and earnings of $3.05 to $3.15 per share. Analysts currently expect the company to earn $3.17 per share on revenues of $4.69 billion for the fiscal year 2014.