Williams-Sonoma Inc. (NYSE:WSM) is set to report FQ4 2014 earnings after the market closes on Wednesday, March 12th. Williams-Sonoma is a high-end kitchenware and homeware retailer which operates approximately 600 stores. Shares of Williams-Sonoma dipped nearly 10% in January but since then the stock price has rallied back to start-of-the-year-levels. Retail companies have faced a challenging holiday sales environment which many have blamed on snow storms and extremely cold temperatures. Sales expectations for WSM have correspondingly fallen throughout the quarter. Here's what investors expect Williams-Sonoma to report Wednesday.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for WSM to report $1.36 EPS and $1.423B revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is $1.35 EPS and $1.424B in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Williams-Sonoma to narrowly beat the Wall Street consensus on revenue but come up just short on earnings per share.
Over the previous five quarters the consensus from Estimize.com has been more accurate than Wall Street in forecasting both Williams-Sonoma's EPS and revenue in each quarter.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing an extremely small difference between the two groups' expectations.
The distribution of estimates published by analysts on the Estimize.com platform range from $1.31 to $1.38 EPS and from $1.395B to $1.445B in revenues. This quarter we're seeing a slightly wider than usual distribution of estimates on WSM.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market could mean greater volatility post earnings.
Over the past four months the Wall Street EPS consensus dipped but eventually returned to its starting position of $1.36 while the Estimize consensus slipped late in the quarter from $1.38 to $1.35. Meanwhile the Wall Street revenue forecast declined from $1.429B to $1.423B while the Estimize forecast sank right before the report from $1.436B to $1.424B. Timeliness is correlated with accuracy and downward analyst revisions at the end of the quarter are often a bearish indicator.
The analyst with the highest estimate confidence rating this quarter is turbinecity who projects $1.36 EPS and $1.428B in revenue. In the Winter 2014 season turbinecity is the highest rated analyst and is ranked 7th overall among over 3,950 contributing analysts. This season turbinecity has been more accurate than the Street in forecasting EPS and revenue 61% and 59% of the time, respectively, over 1200 estimates. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case turbinecity is making a bullish call, expecting Williams-Sonoma to beat the Estimize consensus on both profit and sales.
Retail sales have been weak across the board this season and contributing analysts on the Estimize.com platform have often taken the under for retail earnings compared to the Wall Street consensus. This quarter, however, the Estimize community has very similar expectations to the Street and is expecting a slight miss on profit but $1 million better than expected sales.