Shares of Williams-Sonoma Rise on Earnings; Dividend Increase (WSM)

Shares of Williams-Sonoma Rise on Earnings; Dividend Increase (WSM)


Home product retailer, Williams-Sonoma, Inc. (WSM) beat estimates for its fourth quarter earnings, and reported plan to raise its dividend on Wednesday.

The San Francisco, CA based company reported fourth quarter earnings of $133.7 million, or $1.34 per share, up 9% from $122.6 million, or $1.17 per share last year. On average, Wall Street analysts expected to see earnings of $1.29 per share.

Revenue for the quarter increased 11% to $1.41 billion, from $1.27 billion last year. The quarters revenue beat analysts estimate of $1.4 billion.

The company has suffered from the weak economy like many other retailers, but WSM’s owner sees an upside for growth.

Additionally, WSM reported that it now plans to raise its quarterly dividend by 41% from 22 cents to 31 cents per share. The dividend will be payable on May 24 to shareholders of record on April 26. The stock has an ex-dividend date of April 24.

WSM also reported a plan to repurchase $750 million in stock over the next three years.

Looking ahead, the company expects to see first quarter earnings in the range of 33 cents and 36 cents. First quarter revenue is estimated to be between $850 million and $870 million. Analysts are expecting to see earnings of 39 cents per share with revenue of $866.6 million.

For FY2013, the company expects earnings between $2.65 and $2.75, which would miss analysts estimate of $2.82 per share for the year. WSM is expecting revenue between $4.2 billion and $4.28 billion, while analysts estimate revenue of $4.23 billion.

Williams-Sonoma shares were up $2.29, or 5.07% during premarket trading Wednesday. The stock has increased 22% in the past year.

The Bottom Line
With the dividend increase, shares of Williams-Sonoma, Inc. (WSM) will have a 2.74% yield, based on Wednesday’s closing price of $45.21.

Williams-Sonoma, Inc. (WSM) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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