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Williams-Sonoma Reports Mixed Results and Lowers Outlook

2 Mins read

Shares of Williams-Sonoma Inc. (WSM) experienced a 1.2% decline in premarket trading on Thursday. The home goods and furniture retailer delivered better-than-expected profits but fell short on revenue. In addition, the company slashed its full-year outlook, attributing this to “ongoing consumer hesitancy” when it comes to purchasing high-ticket furniture items.

Financial Performance

Williams-Sonoma’s net income for the quarter ending October 29th dropped to $237.3 million, or $3.66 per share, compared to $251.7 million, or $3.72 per share, during the same period last year. Although earnings per share surpassed the FactSet consensus of $3.33, revenue declined by 15.5% to $1.85 billion. This fell below the FactSet consensus of $1.94 billion. Furthermore, same-store sales slumped by 14.6%, missing expectations of an 11.5% decline.

Improvements in Gross Margin

Despite the overall decrease in revenue, Williams-Sonoma reports an improvement in gross margin. Gross margin increased from 41.5% to 44.4%. This positive outcome can be attributed to a decrease in shipping and freight costs, as well as a 17.2% decline in the value of inventories, which now stands at $1.4 billion.

Revised Outlook

Looking ahead to fiscal 2023, the company has lowered its revenue growth guidance range to negative 10% to negative 12%, compared to the previous range of negative 5% to negative 10%. On a positive note, Williams-Sonoma has raised its operating margin outlook to between 16% and 16.5%, up from the previous range of 15% to 16%.

Stock Performance

Prior to the release of these mixed results, Williams-Sonoma’s stock had experienced a 9.4% increase over a four-day winning streak. Over the past three months, the stock has climbed by 21.6%, surpassing the S&P 500’s 2.2% gain.

Williams-Sonoma Reports Mixed Results and Lowers Outlook

Shares of Williams-Sonoma Inc. (WSM) experienced a 1.2% decline in premarket trading on Thursday. The home goods and furniture retailer delivered better-than-expected profits but fell short on revenue. In addition, the company slashed its full-year outlook, attributing this to “ongoing consumer hesitancy” when it comes to purchasing high-ticket furniture items.

Financial Performance

Williams-Sonoma’s net income for the quarter ending October 29th dropped to $237.3 million, or $3.66 per share, compared to $251.7 million, or $3.72 per share, during the same period last year. Although earnings per share surpassed the FactSet consensus of $3.33, revenue declined by 15.5% to $1.85 billion. This fell below the FactSet consensus of $1.94 billion. Furthermore, same-store sales slumped by 14.6%, missing expectations of an 11.5% decline.

Improvements in Gross Margin

Despite the overall decrease in revenue, Williams-Sonoma reports an improvement in gross margin. Gross margin increased from 41.5% to 44.4%. This positive outcome can be attributed to a decrease in shipping and freight costs, as well as a 17.2% decline in the value of inventories, which now stands at $1.4 billion.

Revised Outlook

Looking ahead to fiscal 2023, the company has lowered its revenue growth guidance range to negative 10% to negative 12%, compared to the previous range of negative 5% to negative 10%. On a positive note, Williams-Sonoma has raised its operating margin outlook to between 16% and 16.5%, up from the previous range of 15% to 16%.

Stock Performance

Prior to the release of these mixed results, Williams-Sonoma’s stock had experienced a 9.4% increase over a four-day winning streak. Over the past three months, the stock has climbed by 21.6%, surpassing the S&P 500’s 2.2% gain.

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