Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $17.19B
• Dividend Yield: 1.63%
• Average Volume (3M): 3.77M
• Price to Earnings (P/E): 15.8
• Beta (1Y): 1.43
• Revenue Growth: -0.50%
• EPS Growth: 24.11%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Specialty Retail
• EPS (TTM): 9.01
• Shares Outstanding: 123,509,500
• 10 Day Avg. Volume: 3,193,416
• 30 Day Avg. Volume: 3,767,200
• PEG Ratio: 0.66
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.68
• Price to Cash Flow (P/CF): 19.90
• P/FCF Ratio: 29.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $181.38
• Price Target Upside: 31.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 18

Williams-Sonoma's stock score is driven primarily by its strong financial performance and positive earnings call, highlighting its profitability and strategic growth initiatives. The technical analysis indicates weak momentum with the stock trading below key moving averages. Valuation appears fair, with a reasonable P/E ratio and a modest dividend yield. Despite some challenges such as a negative full-year comp and tariff impacts, the company is well-positioned for growth through its innovation and strategic focus.

Positive Factors

Earnings

Williams-Sonoma reported 4Q24 EPS of $3.28, which exceeded consensus estimates of $2.94.

Financial Performance

The company’s sales reached $2,462 million, surpassing consensus expectations of $2,355 million.

Operational Efficiency

Operating margins exceeded expectations, driven by merchandise margins, supply chain efficiencies, and occupancy leverage.

Negative Factors

Demand Trends

Guidance for '25e strikes a cautious tone, suggesting limited visibility into demand trends and some operating margin deleverage.

Guidance

FY25 revenue growth guidance is in the range of -1.5% to +1.5%, with the midpoint below consensus expectations.

Market Conditions

The stock is currently down approximately 11% in the pre-market, likely due to the lower than consensus operating margin guidance for FY25.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-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 Money

Williams-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 presents a solid financial outlook with strong profitability, a balanced capital structure, and healthy cash flow generation. The company's solid profitability is evidenced by an impressive net profit margin and effective cost management. However, challenges in sustaining revenue growth are noted, with a slight decline reported. Continued attention to debt management and revenue growth strategies will be crucial to maintain its positive trajectory.

Income Statement

Williams-Sonoma exhibits solid profitability with a consistent gross profit margin averaging around 46% over recent years. Net profit margin has improved, reaching 14.6% in the latest year, indicative of strong cost management. However, revenue has seen fluctuations, with a decline of 0.5% from the previous year, suggesting potential challenges in sustaining growth. EBIT and EBITDA margins remain robust at 18.5% and 21.5% respectively, demonstrating efficient operations.

Balance Sheet

The company's balance sheet is strong with a debt-to-equity ratio of 0.63, indicating moderate leverage. Return on equity stands at an impressive 52.5%, showcasing effective utilization of shareholder capital. The equity ratio is healthy at 40.4%, reflecting a balanced capital structure. However, slight increases in total debt over time could pose a risk if not managed carefully.

Cash Flow

Williams-Sonoma maintains a robust cash flow position with steady operating cash flow exceeding net income, evidenced by a high operating cash flow to net income ratio of 1.21. Free cash flow has grown consistently, although a 23.7% decline from the previous year suggests variability. The free cash flow to net income ratio is strong at 1.01, indicating good cash generation relative to income.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
7.71B	7.75B	8.67B	8.25B	6.78B
	Gross Profit
3.58B	3.30B	3.68B	3.63B	2.64B
	EBIT
1.43B	1.24B	1.50B	1.45B	910.70M
	EBITDA
1.66B	1.49B	1.50B	1.65B	1.13B
	Net Income Common Stockholders
1.13B	949.76M	1.13B	1.13B	680.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.21B	1.26B	367.34M	850.34M	1.20B
	Total Assets
5.30B	5.27B	4.66B	4.63B	4.66B
	Total Debt
1.35B	1.39B	1.44B	1.28B	1.53B
	Net Debt
134.34M	128.61M	1.08B	433.91M	333.82M
	Total Liabilities
3.16B	3.15B	2.96B	2.96B	3.01B
	Stockholders Equity
2.14B	2.13B	1.70B	1.66B	1.65B
Cash Flow		Free Cash Flow
1.14B	1.49B	698.71M	1.14B	1.11B
	Operating Cash Flow
1.36B	1.68B	1.05B	1.37B	1.27B
	Investing Cash Flow
-221.21M	-188.26M	-353.95M	-226.25M	-168.88M
	Financing Cash Flow
-1.18B	-598.31M	-1.18B	-1.49B	-343.02M

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 137.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Negative. The current price of 137.87 is below the 20-day moving average (MA) of 150.95, below the 50-day MA of 173.84, and below the 200-day MA of 162.17, indicating a bearish trend. The MACD of -9.62 indicates Negative momentum. The RSI at 36.57 is Neutral, neither overbought nor oversold. The STOCH value of 19.58 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DKS	79 Outperform	$14.82B	13.20	40.08%	2.43%	3.53%	13.86%
WSM	69 Neutral	$17.19B	15.84	53.91%	1.63%	-0.50%	24.11%
DPZ	68 Neutral	$16.01B	27.96	-14.74%	1.34%	5.07%	13.74%
DG	65 Neutral	$20.47B	18.20	15.89%	2.54%	4.96%	-32.41%
DLTR	61 Neutral	$17.02B	―	18.88%	―	-9.88%	-205.57%
BBY	60 Neutral	$13.10B	14.48	31.63%	6.08%	-4.43%	-24.58%
Sector *	60 Neutral	$6.54B	11.34	3.27%	4.27%	2.37%	-20.86%