Williams-Sonoma Surging to 2009 Highs (WSM)

Posted in General 
August 26th, 2009

Williams-Sonoma Inc. (NYSE: WSM) is up sharply after beating earnings and managing to raise guidance.  The retailer of home and kitchen items reported earnings of $0.05 EPS, which is $0.14 better than the Thomson Reuters estimate of -$0.09 EPS.  It isn’t all pretty here, as revenues fell 18% from this time last year to $672.1 million vs. $658.3  million estimates. Earnings were driven by stronger than anticipated merchandise margins and ongoing cost containment initiatives, same as we are seeing elsewhere… For Q3 it sees EPS of $0.01 to $0.05 vs. -$0.06 EPS estimates and sees FY10 EPS of $0.19 to $0.31 vs. $0.04 EPS estimates.  There are reasons for the beat that are not great underlying growth metrics, but this is far better than what the company has been doing for quite some time.  This stock is up 10% at $17.01 on only about 18,000 shares as of 8:15 AM EST.  The volume here will increase and that 1.9 million shares a day on average should be taken out rather quickly after the market opens.  The 52-week high on WSM is $20.50, although today’s gap-up will mark the highest levels in the stock since last September.

JON C. OGG

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