Williams-Sonoma New York Stock Exchange: WSM offers everything an investor could want and more, making the stock worthy of buy-and-hold status. The company’s quality is based on its brand and operations, led by CEO Laura Alber. The results of her tenure include growth, operational improvement, increased market share, increased brand loyalty and robust cash flow, allowing for sustained reinvestment in the business while maintaining a strong balance sheet and healthy return on capital.
In terms of return on capital, the payout from Williams-Sonoma is about as good as it gets, including an attractive dividend and reducing share buybacks.
Among the highlights of the third-quarter earnings report was a $5 billion increase in existing authorization, which represents about 30% of the pre-issue market capitalization and played a major role in the market reaction. The market is up more than 20% to a near-record level and is likely to trend upward next year. Other highlights include noteworthy mentions of revenue and earnings trends, as well as elevated recommendations that are likely to be cautious given the trends.
Williams-Sonoma Stock Forecast Today
$138.84
Growth potential 1.14%Hold
Based on ratings from 18 analysts
| High forecast | $165.00 |
|---|---|
| Average forecast | $138.84 |
| Low forecast | $77.00 |
Williams-Sonoma stock forecast details
Williams-Sonoma hit a quarter and extended the margin.
Williams-Sonoma had a strong quarter, reflecting the strength of its consumer base and the impact of Ms. Alber’s work over the past few years. The company’s revenue is declining due to lower revenue due to headwinds and the post-COVID downturn. However, the $1.8 billion figure fell just 2.7% and beat the consensus estimate reported by MarketBeat. By segment, most segments saw their revenue decline, with Pottery Barn leading the pack with revenue of 7.5%. West Elm fell 3.5%, while its flagship brand Williams-Sonoma fell just 0.1%. Pottery Barn Kids, a source of continued strength, grew 3.8%.
Williams-Sonoma dividend payment
- Dividend yield
- 1.66%
- Annual dividends
- $2.28
- Record dividend increase
- 19 years old
- Annual dividend growth for 3 years
- 20.88%
- Dividend payout ratio
- 27.39%
- Next dividend payment
- November 22
WSM Dividend History
Margin news is even better. The company increased its gross margin through price realization, lower cost of goods and improved operating performance. Commodity margins increased 130bps and supply chain improved 100bps, resulting in a 230bps increase in gross margin. Increased selling and administrative expenses offset the gains to some extent, but not entirely. Operating margin increased 80 basis points to 17.8%, above the top of its long-term target range. The important detail is that adjusted earnings per share of $1.96 beat the consensus estimate by $0.19, or nearly 1,100 basis points, and rose 7.1% compared to the revenue decline.
These recommendations are the icing on the investment cake. The company raised its revenue and margin guidance for the year due to revenue and margin trends. The company expects revenue to decline just 3% to 1.5%, lifting the lower end of the range by 100 bps, and margins to range from 17.8% to 18.2%, up 40 basis points from its previous forecast.
Williams-Sonoma has cash flow and balance sheet to envy
Williams-Sonoma has cash flow and a balance sheet that would be the envy of any company. Cash flow for the quarter and year-to-date allowed the company to increase its cash position year-over-year, returning more than $600 million to investors. Return of capital included $73 million in dividends and $533 million in buybacks, down 2% for the quarter.
The pace of buybacks is expected to continue throughout the year, with nothing on the balance sheet in 2025 indicating otherwise. The details show that cash, inventories, current and total assets are growing, liabilities and debt are relatively flat, leverage is low and total liabilities are about 1.6 times equity and shareholders’ equity. Share capital increased by 5%.
WSM stock’s price action is solid in premarket trading following the earnings release. The market is up more than 20%, showing solid support at the lower end of the trading range and the potential to set new highs.
Critical resistance is around $175 and is likely to be broken soon. A move above $175 would signal a continuation of the trend that began in 2023 and would likely lift the market towards the $200 level, technical forecasts indicate.
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