2024 Share Buyback Leaders News ad

Numerous announcements regarding share repurchases or authorizations were made throughout 2024. For the most part, they have become commonplace. A buyback authorization is not an obligation or requirement to repurchase shares, but rather an authorization to repurchase shares. The Company has the option to purchase shares at any time subject to the terms of the repurchase plan.

This distinction is critical because investors tend to believe that authorizing share repurchases means the company is immediately and furiously buying up its shares on the open market. This belief is further reinforced by the price gap that usually follows such announcements. Companies that have historically implemented their buyback programs and also conducted large buybacks accompanied by positive news tend to generate the most enthusiasm in the market. Here are three stocks that have authorized $1 billion in share repurchase programs in 2024.

Williams-Sonoma: $1B buyout is just icing on cake as profitability improves

Share buybacks could add to the upside potential amid strong earnings news. Specialized store of luxury home, kitchen and furniture furniture Williams-Sonoma Inc. New York Stock Exchange: WSM reported stellar earnings for its fiscal third quarter of 2025. The consumer products leader operates Pottery Barn, West Elm, Williams-Sonoma, Rejuvenation, Mark and Graham and Green Row stores. It also owns premium brands including Waterford, Ridel, Le Creuset, Hestan and All-Clad. The company targets affluent consumers with higher disposable incomes, ranging from culinary enthusiasts and home enthusiasts to millennials and Gen Xers who are willing to pay for superior craftsmanship and quality in their kitchen tools, homewares and specialty foods. This demographic has also been a strong driver for relative humidity New York Stock Exchange: RH explosive earnings.

Performance Improvement Continues to Accelerate During the Holiday Shopping Season

Williams-Sonoma reported third-quarter earnings per share of $1.96, beating the consensus estimate by 19 cents. Revenue still fell 2.9% year over year to $1.8 billion, but was well ahead of the consensus estimate of $1.78 billion. Comparable brand revenue fell 2.9% year over year. Despite the negative result, this was an improvement from the 3.3% year-on-year decline in the second quarter. Sales at Pottery Barn fell 7.5% YoY, and sales at its flagship Williams-Sonoma brand fell 0.1%, still an improvement. Pottery Barn Kids had a 3.8% positive rating.

However, its gross margin rose 230 bps. to 46.7% thanks to higher commodity margins by 130 bps. and supply chain efficiency by 100 bps. These improvements are expected to translate into a strong holiday shopping season, as evidenced by the extended fiscal 2025 guidance from $7.52 billion to $7.63 billion, up from $7.44 billion to $7.63 billion. Margins are expected to improve from negative 4.5% to negative 3%, from the previous forecast of negative 5.5% to negative 3%. The company also announced new authorization for a $1 billion share repurchase program. The forecast upgrade, buyback news and an 11.14% short interest sparked the perfect storm of a short squeeze, sending the stock up 27.5% the next day.

Williams-Sonoma CEO Laura Alber enthused, “Our strategy of focusing on returning to growth, enhancing our world-class customer experience and growing our bottom line is working. And as we approach the final quarter of the year, we are optimistic and confident in our business. The fourth quarter is the time of year when we shine, which is why we are raising our full-year guidance.”

BJ’s Wholesale Club: $1 billion share repurchase offsets forecast cut

Share repurchases can often offset negative news and highlight positive news. Warehouse-club retailer Wholesale company BJ’s Club Holdings Inc. New York Stock Exchange: B.J. The company’s shares rose 14% after reporting third-quarter 2024 earnings and announcing a $1 billion share repurchase program expiring in January 2029. The company reported third-quarter earnings per share of $1.18, beating the consensus estimate by 25 cents. It was the biggest gain in earnings per share in nine quarters.

Revenue grew 3.5% YoY to $5.10 billion, slightly below the consensus estimate of $5.12 billion. This was a significant improvement from the previous sequential revenue growth of 2.4% and 0.6% in the previous two quarters. Total club game sales increased 1.5% in the third quarter. Excluding gas sales, prices increased by 3.8% in the quarter.

Port strikes weigh on fourth-quarter sales as forecast cut

The company says the jump in corporate sales was temporarily impacted by a port strike and two hurricanes costing just under one percentage point. Participants stocked up on items in anticipation of strikes at East Coast ports. Digital companies grew 30% year over year. The third quarter was also his 11th.^th fourth quarter of traffic growth. Groceries and miscellaneous items saw a 4% increase, with notable gains in dairy, meat and vegetables. Selection in the home and apparel segments is improving each quarter, and participants noted the growing selection of books and toys.

BJ’s expects fourth-quarter earnings per share of 78 cents to 88 cents, versus the consensus estimate of 97 cents. Club sales are expected to rise 2.5% to 3% year over year in the fourth quarter, bringing full-year 2024 growth to 2.3% to 2.4%. This is probably the result of all the pre-purchases from its members in anticipation of the port strikes.

8% membership growth is the real driver

Membership growth was strong, up 8% year-over-year to a record 7.5 million members. It has doubled memberships on its premium levels. BJ’s will increase membership dues for the first time in seven years. Effective January 1, 2024, Club membership will increase from $5 to $60 per year, and Club+ membership fees will increase from $10 to $120 per year. The $1 billion share buyback is relatively large compared to its market capitalization of just $12.83 billion. The shares rose more than 12% after the announcement.

Corteva: $3 billion buyout to revive shares

Sometimes, share buybacks are just what a stock needs to revive investor sentiment. In 2019, Agricultural Sciences Company Corteva Inc. New York Stock Exchange: CTVA was a subsidiary of DowDuPont’s agricultural division. DowDuPont split into three independent public companies, including Corteva, a technology materials company. DuPont de Nemours Inc. New York Stock Exchange: DD, and manufacturer of specialty chemicals and materials Dow Inc. New York Stock Exchange: DOU.

Market headwinds led to dismal third-quarter results

Corteva specializes in crop protection products and seeds. Its third-quarter earnings were terrible as it reported a loss of 49 cents per share, missing the consensus estimate by 19 cents. Revenue fell 5% year-on-year to $2.46 billion, well below the consensus estimate of $2.7 billion. Latin America was a major headwind, particularly in Brazil, as weather-related sales fell and corn acreage fell. Market dynamics resulted in prices falling by 5% in Latin America, as well as negative currency effects due to the strengthening of the US dollar.

Lowering the bar in 2024 and 2025

Corteva issued lowered full-year 2024 earnings per share guidance to $2.50 to $2.60, down from its previous forecast of $2.60 to $2.80 versus the consensus estimate of $2.67. The company also cut full-year 2025 revenue from $17.3 billion to $17.7 billion, versus consensus estimates of $17.95 billion. This sent shares down 10% in the following days, from $61.74 to a low of $55.18 .

$3 billion share buyback wakes up investors

Authorizing large share buybacks could highlight the new strategy while strengthening sentiment and the stock’s underlying price. On November 19, 2024, Corteva outlined a new strategy to enhance shareholder value and accompanied it with a massive $3 billion share repurchase, causing shares to rise from $57 to $61.

Corteva unveiled a new financial program through 2027, including $1 billion in net sales from growth platforms, $1 billion in cost reductions and productivity improvements, and $4.5 billion in shareholder returns. Its growth platforms included seed and trait licensing, biologics , new methods of crop protection, gene editing, biofuels and hybrid wheat. Corteva will reinvest 8% of revenues into research and development, equivalent to $4 million per day.

The $3 billion share repurchase program is effective immediately and has no expiration date. The company still has $775 million remaining under its $2 billion share repurchase program announced in September 2022.

Before you consider Williams-Sonoma, you might want to hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and Williams-Sonoma wasn’t on the list.

While Williams-Sonoma currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Outperform Buys.

View five stocks here