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Williams-Sonoma, Inc. (WSM), Bed Bath & Beyond Inc. (BBBY): What a Return of the High-End Shopper Means for Home Goods

It’s worth noting that Pier 1 Imports, Inc. (NYSE:PIR) also has a revenue profile that includes not only decorative items, but also furniture. Furniture makes up around 40% of sales. That’s one of the unique advantages of Pier–shoppers drop by one of its stores to grab a lamp, but come out with a “high-priced” item, such as a patio set.

Bottom line
I believe that Bed Bath & Beyond Inc. (NASDAQ:BBBY) will continue to battle it out in the lower-end market, while Williams-Sonoma, Inc. (NYSE:WSM) begins to take a larger portion of the middle-market. I also see the likes of Wal-Mart and Target continuing to compete, and in most cases, steal market share from Bed Bath and Pier 1 Imports, Inc. (NYSE:PIR). However, Wal-Mart’s quality still can’t rival that of Williams’.

Williams-Sonoma, Inc. (NYSE:WSM) has lowered its days of inventory nicely, down from the fiscal 2009 high of 104 days to 89 days at the end of fiscal 2013. This 89 days is the lowest (a positive) compared to Bed Bath & Beyond Inc. (NASDAQ:BBBY)’s 127 days and Pier 1 Imports, Inc. (NYSE:PIR)’s 129 days.

Williams-Sonoma, Inc. (NYSE:WSM)’ valuation is also compelling. With a return on invested capital that’s now above 20% and a 2.2% dividend yield (which is a 45% payout of earning), the home-goods store is not only a great shopping experience but also a great investment.

The article What a Return of the High-End Shopper Means for Home Goods originally appeared on

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Bed Bath & Beyond and Williams-Sonoma. 

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