Williams-Sonoma stock price will be in the spotlight this week as the blue-chip American retailer publishes its financial results, which will shed light on the impact of tariffs on its business. WSM was trading at $174.30, its highest point since March 12 and 35% above its lowest point this month.
Williams-Sonoma earnings ahead
Williams-Sonoma is a top retailer operating several popular brands like Pottery Barn, West Elm, Rejuvenation, Mark and Graham, and GreenRow.
The company was a pioneer in incorporating e-commerce into its operations, which explains why it makes most of its money through its e-commerce channels. The most recent numbers showed that 66% of its revenue came from this channel.
Williams-Sonoma also benefits by having products for customers across several segments. For example, Pottery Barn Kids and Teens cater to the young people, while Rejuvenarion caters to the fairly wealthy.
The next key catalyst for the WSM stock price will be its earnings, which will come out on Thursday. Analysts expect these numbers to reveal that its business slowed in Q1, with its revenue coming in at $1.67 billion.
The earnings-per-share is expected to make some improvements, rising from $1.74 to $17.5. The official numbers will likely be higher than expected since the company has a long track record of doing better than estimated.
Read more: Williams-Sonoma stock analysis: sky is the limit for WSM?
In most cases, stock prices make major moves based on the forward guidance. In Williams-Sonoma’s case, the guidance will be important because it sources many of its products from Asian countries. As such, the management will likely provide more color about its business and the impact of tariffs on its business.
The forward guidance for the second quarter will be $1.81 billion, up by 1.1% from the same quarter last year. It will also guide to annual results coming in at $7.67 billion, while its earnings per share with move from $8.79 to $8.6.
The most recent financial results showed that its business made over $7.7 billion in annual sales. Most of this revenue came from its Pottery Ban, which made over $3.04 billion in revenue. It was followed by WestElm, Williams-Sonoma, and Pottery Barn & Kids.
Williams-Sonoma is also a good rewarder of shareholders as it has boosted its payouts for over two decades. As a result, its total return in the last five years, beating many other companies.
The company has other benefits. It has grown its dividends for over 16 years, and has no debt.
Williams-Sonoma share price analysis
WSM price chart | Source: TradingView
The daily chart shows that the WSM stock price has jumped in the past few weeks, mirroring the performance of the broader financial market. It has jumped above the 50-day and 100-day moving averages.
Williams-Sonoma stock has also moved above the key support level at $160.78, the highest point in July last year.
However, WSM stock has also formed a rising wedge pattern, a popular bearish reversal signal. It has also formed an island reversal pattern, which happens when a stock forms a gap and then consolidates.
Therefore, the Williams-Sonoma stock may reverse after publishing its stock this week. If this happens, it may drop and retest the support at $160 and then resume the uptrend.
Read more: Williams-Sonoma stock: is this future dividend aristocrat a buy?
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