Williams-Sonoma, Inc. (WSM)’s Stock Plummets After Weak Guidance For The Coming Quarter

Williams-Sonoma, Inc. (NYSE:WSM), the California-headquarter specialty home furnishings retailer, had yesterday released its earnings report for the second quarter, ended on August 3. Sales revenue amounted to $1.04 billion, which was 5.8% higher compared to the same period of last year and only slightly smaller than market estimate of $1.05 billion. Meeting revenue targets notwithstanding a lower than expected guidance for the third quarter caused the company’s shares to take a plunge, which fell by more than 11.2%. For the third quarter, the company expects revenue between $1.1 billion to $1.13 billion and diluted EPS from $0.58 to $0.63. David Magee, Analyst at SunTrust Robinson Humphrey talked about this and the issues faced by retailers this summer on CNBC’s Squawk Box.

Williams-Sonoma, Inc. (NYSE:WSM)

Magee felt that Williams-Sonoma, Inc. (NYSE:WSM) stock had been doing too good this quarter. It was up by almost 10 % in the recent weeks and that was one of the major reasons why the company was able to meet the market estimate.

“[...] The stock had done so good recently, it got ahead of itself, stock is up almost 10% in recent weeks and so they hit the number, they would have beaten the number had it not been for a higher tax rate [...],” he said explaining about the unexpected tax rate which was responsible for the revenue falling slightly short of the market consensus.

As a retailer, Williams-Sonoma, Inc. (NYSE:WSM) had the option to adjust its pricing and catalog depending on the situation. The second quarter’s gross margin line reflected the retailer’s reduction in pricing as it was a tough summer for retailers all over. Though this was not a permanent situation, it must be approached with caution as it had a tendency to affect the value of the stock.

“We’ve seen this in the past and that is not a permanent condition but it does cause volatility in the stock,” observed Magee.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!