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Williams-Sonoma shares rise as stay-home developments end in better-than-expected gross sales

Pedestrians walk outside a Williams-Sonoma Inc. store in San Francisco, California.

David Paul Morris | Bloomberg | Getty Images

Williams-Sonoma posted a fourth quarter profit on Wednesday that exceeded analysts' expectations as consumers continued to buy furniture and cookware as they spent more time at home during the coronavirus pandemic.

The company's stock rose more than 11% in expanded trading as the company expects growth to continue over the coming year.

The company reported for the fourth quarter ended Jan. 31, relative to Wall Street analyst expectations based on a survey by Refinitiv:

Earnings per share: $ 3.95 adjusted versus $ 3.39 expected Revenue: $ 2.29 billion versus $ 2.18 billion expected

"In the fourth quarter, despite shipping restrictions and low retail traffic, we achieved another quarter with sales and profitability growth of 26% and EPS growth of over 85%," said Laura Alber, President and CEO of Williams-Sonoma, in a press release .

Net income rose from $ 166 million, or $ 2.10 per share last year, to $ 309 million, or $ 3.92 per share.

Excluding items, Williams-Sonoma earned $ 3.95 per share, beating analysts polled by Refinitiv, which was expected to $ 3.39 per share.

Revenue increased 24% from $ 1.84 billion a year ago to $ 2.29 billion, beating expectations of $ 2.18 billion.

The growth was fueled by a 47.9% increase in e-commerce sales, with approximately 70% of total sales coming from the e-commerce business.

Revenue for the entire company in the same store rose 25.7% in the most recent quarter, with all brands posting double-digit gains.

The brand of the same name, Williams-Sonoma, reported a 26.2% increase in sales in the same store. Both Pottery Barn and Pottery Barn Kids and Teen saw sales grow 25.7% in the same store. West Elm was close behind with a 25.2% increase in sales in the same business.

In fiscal 2021, the retailer expects retail traffic to recover and inventory levels to improve.

The company expects its performance to be in line with its long-term financial goals, which require mid to high single digit revenue growth.

Even as vaccination rates rise across the country and routines slowly return to normal, the retailer remains optimistic about the long-term growth of its brands.

Alber expects the retailer to benefit from favorable macro trends that will support its business over the long term. Factors she cited included high consumer confidence, a strong real estate market, a shift to e-commerce, and the expectation that people will continue to work from home for more time in the future.

During the call for results, the company also talked about a wide range of goods.

"As more people get vaccinated as travel opens up and schools open, we have a sizable equipment and luggage business. We expect people to open their homes more so our restaurants and entertainment companies are prepared for that," said Felix Carbullido, the company's executive vice president and chief marketing officer.

The company added that the work-from-home lifestyle, which is expected to continue after the pandemic, will support the growth of its furniture brands as more people want to buy desks and other consumables.

Williams-Sonoma said it would increase its dividend 11.3% to 59 cents per share. Meanwhile, the board of directors approved plans to repurchase shares valued at $ 1 billion. The new buyback plan replaces its previous approval and comes into effect on March 17th.

Read the full results publication here.

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