Williams-Sonoma, Inc. (WSM) topped estimates once again, sending shares to multi-year highs. Top-line growth helped the company report its sixth consecutive surprise.
Company Description

Williams-Sonoma is a higher-end retailer that operates under brands that include Williams-Sonoma, Pottery Barn and others. Items are purchased through over 600 stores, catalogs and the company's websites.
8% Increase in Revenue
On Mar 22 Williams-Sonoma reported fourth-quarter results that showed revenues of just $1.09 billion, up 8.1% since the same quarter last year. Same-store sales were also up, about 7.6%.
Earnings per share came in at 86 cents, which was 13 cents better than expected. This was Williams-Sonoma's sixth consecutive surprise, and you have to go back to early 2005 for the most recent miss.
Estimates Pop
Given the earnings results and guidance, analysts were quick to raise forecasts. The Zacks Consensus Estimates for fiscal 2011 is now $1.31, up from 98 cents on 40 upward revisions.
Estimates for the Zacks #1 Rank stock are averaging $1.52 for next year, up from $1.19 on 19 revisions. With these projections, earnings growth rates are expected to be 37% and 16% respectively.
Industry Comparison
Williams-Sonoma operates with a net profit margin of 2.5%, ahead of its industry average of 0.4%. The company's ROE is 8.9%, easily topping the -2.7% averaged by its peers.
All of this comes with a debt-to-equity ratio of just 0.05 times. The industry averages a ratio of over 6.21 times.
The Chart
Shares of WMS popped on the news and are not trading at multi-year highs. Valuations are a bit higher than desirable, with a forward P/E of 20 times, but estimates are rising.
Williams-Sonoma, Inc. - ticker WSM > <P ALIGN=

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service