• Investing Insights & Exclusive Offers → Get Our FREE “Market Brief”
    Sign-up for our free weekly newsletter. Get unparalleled investing insights and exclusive Summer Sale discounts on Hedgeye research.

    Disclaimer: By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy

Takeaway: We’re a dime ahead of the consensus for 2Q EPS. Will revisit short side when we de-risk positive earnings revisions.

While we are bearish over a TAIL duration on WSM, the reality is that the consensus estimate looks low by a dime. We’re modeling 5% top line growth, about in line with the 2-year stack from 1Q, along with 50bp GM erosion (inventory is heavy), and 1% SG&A growth (company is burning the furniture this year on the SG&A line) and we’re coming out at $0.93 compared to the Street at $0.83. With 17% of the float short I’m not going to stay here and sit through a squeeze on a relatively hated retailer just because it’s a net loser six months out. Moving from Best Idea Short list to our Short Bench. We’ll revisit when the timing is right and we de-risk positive earnings revisions.