Williams-Sonoma Partners Reliance To Open 1st Store In India

Williams-Sonoma, Inc. (NYSE:WSM) recently partners with Reliance Brands Limited, a subsidiary of Reliance Industries Limited, to expand its global presence in order to uncover India’s home furnishing market.

Williams-Sonoma will introduce its Pottery Barn, Pottery Barn Kids and West Elm brands in India through a franchise agreement. The brands’ first stores will be launched in Mumbai, India in early 2020 along with the roll out of e-commerce websites.

This specialty retailer of high-quality home products currently operates its retail and franchised stores across the world. The company operates company-owned stores in the United States, Canada, Australia and the United Kingdom, along with franchise stores in countries throughout the Middle East, South Korea, the Philippines, and Mexico.

Strategic Initiatives to Drive Growth

Williams-Sonoma focuses on the remodeling of existing retail business through selectively investing in new stores, remodeling and relocating of existing stores, along with strategically offloading the fleet of underperforming stores. In addition, the company has been actively pursuing opportunities to expand the global business.

Williams-Sonoma is expected to generate more revenues from the e-commerce channel, as it focuses on re-platforming mobile sites to progressive web app technology, streamlining checkout process, and implementing the next-generation of machine learning, on-site search as well as personalization experience.

All these innovative efforts have helped the company to drive e-commerce growth to an all-time high of 55% of the total revenues in the fiscal third quarter. In the first nine months of fiscal 2018, its comps grew 640 basis points from a year ago.

However, Williams-Sonoma recently reported soft comps growth of 3.1% in the third quarter of fiscal 2018 compared with 4.6% increase in the second quarter and 3.3% growth in the year-ago quarter. Notably, revenues and comps were at the lower end of management’s guided range. The downside was largely due to port delays in China that led to a delay in fulfilling orders.

Meanwhile, shares of Williams-Sonoma, which has outperformed its industry year to date, took a beating post fiscal third-quarter results, declining 11.2%. Despite reporting better-than-expected earnings in the quarter, lower-than-anticipated revenues along with weak comps have presumably disappointed investors.

Nonetheless, the company’s relentless efforts to improve its performance through global expansion, continued enhancement of e-commerce channel, optimization of supply chain and the transformation of retail fleet by investing in new and remodeled stores are expected to drive growth.

Zacks Rank & Key Picks

Williams-Sonoma currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Retail-Wholesale sector are RH (NYSE:RH) , Darden Restaurants, Inc. (NYSE:DRI) and Boot Barn Holdings, Inc. (NYSE:BOOT) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

RH, Darden and Boot Barn’s earnings for the current year are expected to increase 150.2%, 16.8%, and 77.1%, respectively.

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