Williamm Sonoma, Inc. - Momentum

Williamm Sonoma, Inc. (WSM) continues to trade strong in the face of a choppy market, recently hitting a new multi-year high ahead of its mid-May Q1 report. With four consecutive earnings surprises and a bullish growth projection, this Zacks #1 rank stock will help furnish your portfolio with momentum.

Company Description

Williams Sonoma, Inc. operates as a specialty retailer of home products mostly domestically but with a presence in Canada and Puerta Rico as well. The company was founded in 1956 and has a market cap of $4.45 billion.

WSM’s relative strength in a volatile market comes on the heels of the company’s Q4 results from mid March that showcased its strong rebound out of the recession driven weak consumer environment.

First-Quarter Results

Revenue for the period was up 10% from last year to $1.195 billion. Earnings also came in strong at $1.08, 10% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 43% over the last 4 quarters.

The strong quarter was driven by continued growth in the company’s alternative sales channels, with direct to customer sales up 17% from last year to $466 million while Internet sales increased 27% to $393 million.

William Sonama was also busy returning value to its shareholders during, repurchasing 1.29 million shares during the quarter for $44 million.

Financial Profile

But in spite of the bumpy ride over the last few years, WSM maintains an awesome balance sheet, with cash and short-term investments up $127 million from last year to $641 million against a negligible debt load of just $9 million.

Estimates

Estimates did take a decent step forward on the good quarter, with the current year adding 10 cents to $2.20 while the next-year estimate gained 12 cents to $2.49, a solid 13% growth projection.

Valuation

On the valuation front, WSM’s forward P/E of 19X is a premium to the industry average of 17X.

12-Month Chart

On the chart, WSM remains in elevated territory after hitting a new multi-year high in early April. Take a look at the chart below.