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Williams Sonoma (NYSE:WSM) is one of the United States’ largest e-commerce retailers, serving customers worldwide. Its upscale brick and mortar stores located in the U.S., Canada, Puerto Rico, Australia and the UK are supplemented by franchised branding in several Middle Eastern countries and the Philippines. The company issued its third quarter results shortly after the New York Stock Exchange closed today. Its share price opened the day at $69.60, falling as low as $68.70 before closing at $69.42, down 0.26% on the day. However, the third quarter results gained the attention of after-hours traders and is now up 6.74% to $74.10, nearing its 52-week high of $75.69.
What started in 1956 as “a small business with a big idea,” has become the model for multi-channel retailing, with a market cap of $6.48 billion and $4.53 billion in annual revenue. The unique oddity of Williams Sonoma itself is that it is a profoundly American company built distinctly upon European culinary and cultural experiences.
WSM stock had traded fairly consistently in the $40.00 range price to the economic crisis of 2008-2009 when it dropped below $10.00. The share price had recovered to above the $40.00 mark by mid-2012, powering beyond $50.00 in the spring of 2013, and breaking the $60.00 barrier early this year. And, with growth that has exceeded that of the S&P 500 by more than 2%, it has not looked back
The revenue growth of the Williams Sonoma and Pottery Barn Kids in the third quarter was more than enough to compensate for a decline in year-on-year quarterly growth from the company’s other three channels (Pottery Barn, West Elm and PBteen). Overall revenue grew by 8.7%. Slightly more than half of the company’s $1.14 billion in sales came from e-commerce.
Earnings per share rose 17.2% from $0.58 to $0.68 compared to the third quarter of 2013. Gross margins were down modestly from 38.6% to 37.7%.
According to the Nasdaq, “Over the prior three fiscal years (12 quarters), when shares of WSM rose in the extended-hours session in reaction to its earnings announcement, history shows that 83.3% of the time (5 events) the stock posted additional gains in the following regular session by an average of 3.0%,” indicating that tomorrow should be another good day for the stock.
President and CEO Laura Alber observed that “These achievements reflect our product leadership, lifestyle merchandising, iconic brands and strong execution. We believe that this third quarter further demonstrates that our multi-channel model represents a distinct competitive advantage.” She reiterated that the company’s focus is on customer service and investing in sustainable, long-term growth.
