Williams-Sonoma (WSM) was in uncharted territory Wednesday, hitting an all-time high after the upper-end home goods and kitchenware seller delivered its latest earnings, announced a dividend raise and set plans for an expanded buyback.
The San Francisco-based merchant, which also operates the Pottery Barn and West Elm brands, saw its shares jump 11.6%, or $5.22, to $50.43 on volume that was, at midday, already five times the average for an ordinary full session. The last time it rose more in a single day, percentage-wise, was seven months ago. The highest close ever for the stock (split-adjusted) is $47.93, last Oct. 18, and the intraday peak was recorded about two weeks after that, at $48.07.
It has to be said. Like so many stocks, retailers and otherwise, Williams-Sonoma was slammed in the recession and market meltdown. In November 2008 it dropped under $5, some 80% below where it started that year. The turnaround, though, has paid off for anyone who could hang on. Since then, it's up roughly 10-fold.
The recovery in sales -- the high-end buyers didn't stay away that long -- have played no small part in the stock's climb. The latest advance came a day after the company said it had full-year revenue of $4.04 billion. This year, the top line is expected to reach $4.20 billion to $4.28 billion, according to Williams-Sonoma estimates.
As the chart below shows, Williams-Sonoma's sales slid hard during the economic downturn, but they've grown the last three years. They're up 30% since FY2010.
Source: Williams-Sonoma. Sales are represented in millions of $.
Along with the plus-$4 billion in revenue for the most recent fiscal year, Williams-Sonoma said it would boost its quarterly dividend 41% to 31 cents a share, while the board of directors also authorized a new $750 million three-year buyback. The board last approved a repurchase in January 2012, through which Williams-Sonoma spent $225 million buying up shares.
Even with the stock at $50, that new dividend level of $1.24 a year produces a yield of nearly 2.5%, exceeding the just-under 2% yield it was carrying one day prior. That's also the best it's been since 2008, although that year is skewed higher because of the steep drop in the stock then.
In recent trading, Williams-Sonoma's shares were the third-best performer on the New York Stock Exchange for the day. Leading the way was Model N (MODN), an initial public offering debuting on the market that was up 35%.
- Investment & Company Information