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Williams-Sonoma (WSM)
NYSE:WSM
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Williams-Sonoma
(NYSE:WSM)
68Neutral
Positive Factors
Earnings
WSM reported 4Q24 EPS of $3.28, above consensus estimates of $2.94.
Margin Management
Operating margins came in above expectations, driven by merchandise margins, supply chain efficiencies, and occupancy leverage.
Sales Performance
The company’s sales of $2,462 million exceeded consensus expectations of $2,355 million.
Negative Factors
Market Valuation
WSM is trading above its historical average at 19.4x NTM PE, vs. its 3-year/5-year average of 13.1x/14.2x.
Operating Margin Guidance
The stock is currently down approximately 11% in the pre-market, likely due to the lower than consensus operating margin guidance for FY25.
Revenue Growth Guidance
FY25 revenue growth guidance is in the range of -1.5% to +1.5%, with the midpoint below consensus expectations.
Williams-Sonoma (WSM) vs. S&P 500 (SPY)
Market Cap
$20.15B
Dividend Yield1.39%
Average Volume (3M)2.86M
Price to Earnings (P/E)18.6
Beta (1Y)1.48
Revenue Growth-0.50%
EPS Growth24.11%
CountryUS
Employees10,700
SectorConsumer Cyclical
Sector Strength48
IndustrySpecialty Retail
Share Statistics
EPS (TTM)9.01
Shares Outstanding123,099,945
10 Day Avg. Volume5,809,145
30 Day Avg. Volume2,856,507
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)N/A
Price to Sales (P/S)2.68
Price to Cash Flow (P/CF)19.90
P/FCF Ratio29.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$183.47Price Target Upside7.73% Upside
Rating ConsensusHold
Number of Analyst Covering17
Williams-Sonoma Business Overview & Revenue Model
Company DescriptionWilliams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; and women's and men's accessories, travel, entertaining and bar, home décor, and seasonal items under the Mark and Graham brand, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. It operates 544 stores comprising 502 stores in 41states, Washington, D.C., and Puerto Rico; 20 stores in Canada; 19 stores in Australia; 3 stores in the United Kingdom; and 139 franchised stores, as well as e-commerce websites in various countries in the Middle East, the Philippines, Mexico, South Korea, and India. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.
How the Company Makes MoneyWilliams-Sonoma generates revenue primarily through the sale of home-related products across its various retail brands. The company operates both brick-and-mortar stores and a significant e-commerce presence, allowing it to reach customers through multiple channels. Key revenue streams include direct-to-consumer sales via their online platforms, in-store purchases, and catalog sales. The company also leverages its brand strength and customer loyalty programs to drive repeat sales and expand its customer base. Additionally, Williams-Sonoma benefits from strategic partnerships with designers and exclusive product lines, enhancing its market differentiation and appeal. Seasonal and promotional campaigns further contribute to its earnings by boosting sales during peak shopping periods.
Williams-Sonoma Financial Statement Overview
Summary
Williams-Sonoma shows strong profitability and operational efficiency with high margins and return metrics. However, challenges exist in revenue growth and maintaining cash flow levels, necessitating a focus on sales growth and cash flow management.Income Statement
Williams-Sonoma exhibits a strong financial performance with a solid Gross Profit Margin of 46.73% and a robust Net Profit Margin of 14.54% in the TTM period. The EBIT Margin of 18.51% and EBITDA Margin of 20.90% further underscore operational efficiency. However, the company experienced a decline in revenue from the previous year, indicating potential headwinds in sales growth.80
Positive
Balance Sheet
The company's balance sheet is relatively stable with a moderate Debt-to-Equity Ratio of 0.69, reflecting manageable leverage. The Return on Equity stands at an impressive 57.42%, indicating effective utilization of equity. The Equity Ratio of 38.37% suggests a solid equity base, though there is room for improvement in reducing liabilities.75
Positive
Cash Flow
Williams-Sonoma demonstrates strong cash flow management with a healthy Operating Cash Flow to Net Income Ratio of 1.28. The Free Cash Flow to Net Income Ratio is also strong at 1.09. However, Free Cash Flow has decreased compared to the previous year, indicating potential challenges in maintaining cash generation levels.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.53B | 7.75B | 8.67B | 8.25B | 6.78B | 5.90B | Gross Profit |
| 3.52B | 3.30B | 3.68B | 3.63B | 2.64B | 2.14B | EBIT |
| 1.39B | 1.24B | 1.50B | 1.45B | 910.70M | 465.87M | EBITDA |
| 1.57B | 1.49B | 1.50B | 1.65B | 1.13B | 653.63M | Net Income Common Stockholders |
| 1.09B | 949.76M | 1.13B | 1.13B | 680.71M | 356.06M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 826.78M | 1.26B | 367.34M | 850.34M | 1.20B | 432.16M | Total Assets |
| 4.97B | 5.27B | 4.66B | 4.63B | 4.66B | 4.05B | Total Debt |
| 1.32B | 1.39B | 1.44B | 1.28B | 1.53B | 1.62B | Net Debt |
| 488.69M | 128.61M | 1.08B | 433.91M | 333.82M | 1.19B | Total Liabilities |
| 3.06B | 3.15B | 2.96B | 2.96B | 3.01B | 2.82B | Stockholders Equity |
| 1.91B | 2.13B | 1.70B | 1.66B | 1.65B | 1.24B |
| Cash Flow | Free Cash Flow | ||||
| 1.19B | 1.49B | 698.71M | 1.14B | 1.11B | 421.02M | Operating Cash Flow |
| 1.40B | 1.68B | 1.05B | 1.37B | 1.27B | 607.29M | Investing Cash Flow |
| -207.82M | -188.26M | -353.95M | -226.25M | -168.88M | -185.55M | Financing Cash Flow |
| -1.07B | -598.31M | -1.18B | -1.49B | -343.02M | -327.23M |
Williams-Sonoma Technical Analysis
Neutral
170.30
Price Trends
196.11
Negative
181.48
Negative
162.67
Positive
Market Momentum
-8.84
Positive
39.63
Neutral
45.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Neutral. The current price of 170.3 is below the 20-day moving average (MA) of 179.57, below the 50-day MA of 196.11, and above the 200-day MA of 162.67, indicating a neutral trend. The MACD of -8.84 indicates Positive momentum. The RSI at 39.63 is Neutral, neither overbought nor oversold. The STOCH value of 45.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WSM.
Williams-Sonoma Risk Analysis
Williams-Sonoma disclosed 41 risk factors in its most recent earnings report. Williams-Sonoma reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Williams-Sonoma Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $12.01B | 25.91 | 87.10% | 0.93% | 0.11% | 3.48% | |
68 Neutral | $20.15B | 18.62 | 53.91% | 1.39% | -0.50% | 24.11% | |
62 Neutral | $266.83M | 52.75 | 3.77% | ― | 0.15% | -65.52% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
47 Neutral | $4.51B | 74.00 | -38.18% | ― | 1.41% | -62.21% |
* Consumer Cyclical Sector Average
Performance Comparison
WSM
Williams-Sonoma
170.30
18.35
12.08%
SGI
Somnigroup International
57.60
2.08
3.75%
RH
RH
257.84
-28.44
-9.93%
LOVE
The Lovesac Company
18.06
-3.58
-16.54%
Williams-Sonoma Earnings Call Summary
Earnings Call Date: Mar 19, 2025 | % Change Since: -1.15% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant achievements in Q4 and strategic plans for 2025, despite the challenges of a negative full-year comp and potential tariff impacts.Highlights
Positive Q4 Comparable Sales
Williams-Sonoma reported a positive 3.1% comp in Q4, outperforming the industry decline of 2%, driven by strong seasonal assortments, effective collaborations, and improvements in furniture sales.
Record Operating Margin
In 2024, Williams-Sonoma delivered a record annual operating margin of 17.9% with full-year earnings per share of $8.50.
B2B Segment Growth
The B2B segment achieved more than $1 billion in revenues with a 10% comp, marking its largest quarter in history with a 12% comp in Q4.
Emerging Brands Performance
Rejuvenation brand reported double-digit growth, with positive comps in 17 out of 20 quarters over the last 5 years, nearly doubling since 2020.
Strong Cash Position
Williams-Sonoma ended the year with a cash balance of $1.2 billion, no debt, and a return on invested capital of 54%.
Lowlights
Full-Year Negative Comp
For the full year 2024, Williams-Sonoma reported a negative 1.6% comp, although comp trends gained momentum across the year.
Potential Tariff Impact
Guidance for 2025 includes the impact of tariffs, such as the 20% China tariff and 25% tariffs on Mexico, Canada, and metals, which could pressure margins.
Company Guidance
During the earnings call, Williams-Sonoma, Inc. provided guidance for fiscal year 2025, projecting net revenue comps to range from flat to a positive 3%, and total net revenues to vary between a decrease of 1.5% to an increase of 1.5%, accounting for the impact of the prior year's additional week. The operating margin is expected to be between 17.4% and 17.8%, inclusive of current tariffs, such as the 20% from China and 25% from Mexico, Canada, and metals. The company highlighted its strategic focus on growth through innovation, non-furniture assortments, collaborations, B2B expansion, and AI integration. They plan to continue optimizing their supply chain and leveraging their digital-first strategy, supported by a strong balance sheet, to drive shareholder value in a challenging macroeconomic environment.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.