The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how home furniture retailer stocks fared in Q3, starting with Williams-Sonoma (NYSE:WSM).
Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.
The 4 home furniture retailer stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 8.9% below.
Luckily, home furniture retailer stocks have performed well with share prices up 16.8% on average since the latest earnings results.
Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.
Williams-Sonoma reported revenues of $1.80 billion, down 2.9% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a strong quarter for the company with a decent beat of analysts’ gross margin and EPS estimates.
“We are pleased with the results of our third quarter, beating both top and bottom-line expectations. The quarter was driven by continued improvement in our sales trend, market-share gains, and strong profit. In Q3, our comp came in at -2.9%, with an operating margin of 17.8%, delivering a 7.1% increase in earnings per share to $1.96. Our operating results reflect the operational improvements that we have been focused on all year, and demonstrate the strength of our margin profile in a difficult environment,” said Laura Alber, President and Chief Executive Officer.
Williams-Sonoma pulled off the biggest analyst estimates beat of the whole group. The stock is up 42.6% since reporting and currently trades at $195.72.
Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it’s free.
Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ:SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.
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