Williams-Sonoma, Inc. (NYSE: WSM) stock surged over 24.8% on 19th March, 2020 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 19. The drivers of the outperformance is due to an expanded, more relevant product assortment, new customer acquisition and further innovations in the customer experience across e-commerce stores and the supply chain. Williams-Sonoma has reported the net profit of $166 million in the quarter, compared to $155.3 million, in the year-ago quarter. The cross-brand initiatives business-to-business, The Key and in-home Design Crew also continued to scale and became more impactful accelerators of the growth. The company has ended the quarter with a cash balance of $432 million compared to $339 million last year.
Moreover, In Pottery Barn in to the fourth quarter, we delivered comp growth of 6.7% with strength across multiple product categories. E-commerce led the performance with improving KPIs, that includes the increases in traffic, conversion and product engagement resulting in double-digit revenue growth. Pottery Barn’s children’s business also posted its strongest performance in recent years with a 7.9% comp in the fourth quarter. The company saw excellent results across the expanded offering of GREENGUARD Gold-certified furniture and organic cotton bedding, further solidifying the leadership in sustainable home products for kids.
WSM in the fourth quarter of FY 19 has reported the adjusted earnings per share of $2.13, beating the analysts’ estimates for the adjusted earnings per share of $2.05, according to analysts polled by Refinitiv. The company had reported the adjusted revenue of $1.84 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $1.82 billion. Gross margin for the fourth quarter has fallen to 37.6% compared to 38.7% last year. The gross margin deleverage of 110 basis points was mainly due to lower year-over-year occupancy leverage of approximately 60 basis points resulting from one less week of sales this year. Occupancy costs were essentially flat to last year at $181 million and 9.8% of revenues.
WSM has declared a quarterly cash dividend of $0.48 per common share. The dividend is payable on May 29, 2020 to stockholders of record as of the close of business on April 24, 2020
The company declined to give guidance on fiscal 2020 because of uncertainty stemming from the coronavirus. Meanwhile, the company has temporary closed all U.S. and Canada stores, effective 6pm local time, March 17, with a plan to reopen on April 2, 2020.