Williams Sonoma Boosts Market Share
Efficient marketing, tactical promotions, and smart partnerships have motivated consumers to participate in the narrow-moat firm's umbrella of brands.
Bolting on its fourth consecutive quarter of positive brand comp gains despite operating in the fragmented and competitive home furnishing industry, narrow-moat
We don't believe Williams-Sonoma will take its foot off the innovation pedal, offering products that pivot with evolving consumer demands. However, this implies that spending in SG&A could remain inflated from recent levels (27.7% in 2017) as Williams-Sonoma invests to protect its brand. This also underlies our long-term outlook, which calls for top line growth that averages around 3.5% and operating margin that remains constrained to around 10% over the next decade, supporting high-single-digit earnings per share growth throughout our forecast. We don't plan any material change to our $68 fair value estimate and view shares as fairly valued, trading around 16 times our 2018 earnings per share estimate.
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