On May 21, 2015, we issued an updated research report on Williams-Sonoma Inc. WSM.

On May 20, this home furnishing company reported better-than-expected first quarter 2015 earnings. Despite the expected slowdown from West Coast port disruptions, Williams-Sonoma’s first-quarter 2015 adjusted earnings of 48 cents per share beat the Zacks Consensus Estimate by 9.1% and were flat year over year. Net revenue of $1.03 billion beat the consensus estimate by 2.0% and increased 5.8% year over year.

Both earnings and revenues surpassed management’s guidance. The better-than-expected results were driven by solid growth across West Elm brand and new businesses and solid execution across all the brands.  

However, headwinds related to disruptions in the West Coast ports continued to linger.  Since the fourth quarter of 2014, Williams-Sonoma’s earnings and revenues have been hurt by delayed shipments which have hampered the availability of inventory for sales. As a result, despite high demand, there was inadequate supply of goods at the stores and unfulfilled orders. Meanwhile, the company incurred higher cost to mitigate port disruptions while fulfilling customer demand. The West Coast port slowdown hurt first quarter revenues by about $25 million to $30 million and earnings per share by about 8 cents to 10 cents.

Though the company improved on its supply chain operations and its inventory levels during the first quarter of 2015, there was no meaningful improvement in inventory levels till April. The company expects this effect to linger in the second quarter of 2015.  

Williams-Sonoma carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the home furnishing industry include Mohawk Industries Inc. MHK, Restoration Hardware Holdings, Inc. RH and Tempur Sealy International Inc. TPX. All the three companies hold a Zacks Rank #2 (Buy).  

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
TEMPUR SEALY (TPX): Free Stock Analysis Report
 
RESTORATION HDW (RH): Free Stock Analysis Report
 
MOHAWK INDS INC (MHK): Free Stock Analysis Report
 
WILLIAMS-SONOMA (WSM): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research