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Williams-Sonoma stock rises, Leonard Green increases stake in company

Shares of Williams-Sonoma (WSM) jumped after news broke of private equity firm, Leonard Green & Partners, increasing its stake in the retail company. Yahoo Finance's Julie Hyman and Jared Blikre break down the recent news and how the stock is performing.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JARED BLIKRE: We are also watching shares of Williams-Sonoma. The stock jumping today after private equity Leonard Green increased its stake in the home goods retailer. You can see it's up over 11.5%. Leonard Greens fund now has a 5% ownership stake in WSM. And, you know, the homebuilders have had a mixed story this year. If we go to the Wi-Fi interactive, I'm going to chart this real quickly, everything on my screen here is up today, but the square that counts is Williams-Sonoma, that's down 11-- up 11%, far and away bigger than everything else.

And here is the year-to-date board. If we put this an equal weight basis, you can see Williams-Sonoma in the middle of the top row. And over the last month, it is really the only one in the green here, so kind of an idiosyncratic story with respect to Williams-Sonoma. But they really capitalized on this run here where after the mega caps were done, really showing their force and strength. And at the end of June, a lot of cyclicals stepped up. Williams-Sonoma looks like they're one of them.

JULIE HYMAN: They are one of them. Williams-Sonoma has been relatively unique within the category. And this strategy was shown in their last earnings report. They've held the line on price. that has been what is relatively unique about Williams-Sonoma. Now that has cost them in some ways in terms of volumes, right, in terms of what they're selling through. But analysts have been relatively positive on what it has done for margins. And so since their last earnings report in August, we've seen a number of price target increases and some positive commentary around the stock, and then followed by this news that they're getting this investment from Leonard Green.

Leonard Green, which is invested-- private equity firm that's invested in a number of consumer names, the Container Store, probably notably Shake Shack as well. So that's why it's giving it a little extra boost today.