Retail and consumer discretionary has been a horrific sector the last few months. One name we have traded several times and currently hold a house position consisting of trading profits is Williams-Sonoma (NYSE: WSM ). We think this correction down toSelloff got you down? We are thriving during it at BAD BEAT InvestingWe have the right high-conviction picks that have done well in this selloff. We also have pinpointed areas to buy during the correction. Enjoy more rapid-returns with our strategy to advance y ...

Financial Data and Key Metrics Changes - In Q4 2024, the company reported a positive comp of 3.1%, exceeding expectations, with an operating margin of 21.5% and earnings per share of $3.28, marking a 20.6% increase year-over-year [6][7][58] - For the full year 2024, net revenues reached $7.7 billion, with a full-year comp of negative 1.6% and a record annual operating margin of 17.9% [9][58][62] - The company ended the year with a cash balance of $1.2 billion and no debt, with merchandise inventory at $1.3 billion, up 6.9% year-over-year [63][64] Business Line Data and Key Metrics Changes - Pottery Barn experienced a negative 0.5% comp in Q4 but had a positive 37.6% comp over five years, with a focus on reducing promotional activity and improving margins [24][25] - The Williams-Sonoma brand reported a positive comp of 5.7% in Q4, driven by strong retail execution and product innovation [31][32] - The B2B segment achieved over $1 billion in revenues with a 10% comp, marking a record-breaking performance [35] Market Data and Key Metrics Changes - Retail stores delivered a positive 7% comp in Q4, while e-commerce saw a positive 1.3% comp, with e-commerce constituting nearly 66% of total revenues for the year [52][59] - The company noted strength in key growth markets, including Canada, Mexico, and India, with continued growth in sales and market share [42][43] Company Strategy and Development Direction - The company aims to deliver core brand growth through innovation and partnerships, focusing on a robust non-furniture assortment to mitigate housing market challenges [11][12] - Investments in AI and enhanced design services are part of the strategy to improve customer experience and operational efficiency [17][19] - The company plans to expand its emerging brands and optimize its retail strategy while maintaining a strong focus on customer service and earnings growth [15][20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundation laid for growth and profitability despite macroeconomic uncertainties, emphasizing the importance of their strategic initiatives [10][21] - The guidance for 2025 includes expectations for flat to positive 3% comps and operating margins between 17.4% and 17.8%, factoring in current tariffs [23][70][71] Other Important Information - The company generated free cash flow of $1.1 billion in 2024 and returned nearly $1.1 billion to shareholders through share repurchases and dividends [64] - A 16% increase in the quarterly dividend payout to $0.66 per share was announced, marking the 16th consecutive year of increased dividends [73] Q&A Session Summary Question: How does SG&A leverage differ between flat comp and plus 3% comp? - Management indicated that while they do not provide specific guidance on SG&A, they expect some leverage from expense savings to offset gross margin headwinds from tariffs [78][79] Question: How do you see e-commerce versus stores performing in 2025? - Management expressed optimism for both channels, with e-commerce expected to remain around 66% of total revenues [85][86] Question: What is the structural opportunity for higher product margins? - Management highlighted their competitive advantage in design and sourcing, which allows them to navigate tariff impacts effectively while maintaining margins [96][98] Question: What is the impact of tariffs on gross margin? - The guidance includes the full impact of tariffs, with management outlining a plan to offset these through vendor concessions and supply chain efficiencies [110][118] Question: What are the early trends in Q1 2025? - Management noted that while trends are difficult to read due to the late Easter, they remain optimistic based on strong responses to their strategies [128][130]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

For the quarter ended January 2025, Williams-Sonoma (WSM) reported revenue of $2.46 billion, up 8% over the same period last year. EPS came in at $3.28, compared to $2.72 in the year-ago quarter. The reported revenue represents a surprise of +5.35% over the Zacks Consensus Estimate of $2.34 billion. With the consensus EPS estimate being $2.91, the EPS surprise was +12.71%. Comparable store sales - Total - YoY change: 3.1% compared to the -2.2% average estimate based on seven analysts. Number of stores - Pot ...

分组1 - Williams-Sonoma reported quarterly earnings of $3.28 per share, exceeding the Zacks Consensus Estimate of $2.91 per share, and up from $2.72 per share a year ago, representing an earnings surprise of 12.71% [1] - The company achieved revenues of $2.46 billion for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 5.35%, and an increase from $2.28 billion year-over-year [2] - Over the last four quarters, Williams-Sonoma has consistently surpassed consensus EPS estimates four times and revenue estimates three times [2] 分组2 - The stock has underperformed the market, losing about 7% since the beginning of the year compared to the S&P 500's decline of 4.5% [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $1.76 on revenues of $1.66 billion, and for the current fiscal year, it is $8.53 on revenues of $7.63 billion [7] 分组3 - The Retail - Home Furnishings industry, to which Williams-Sonoma belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, which may impact stock performance [8] - Another company in the same industry, Lovesac, is expected to report quarterly earnings of $1.80 per share, reflecting a year-over-year decline of 3.7%, with revenues projected at $228.65 million, down 8.7% from the previous year [9]

Financial Performance - Q4 comparable brand revenue increased by 3.1%[5] - Record Q4 operating margin reached 21.5%, with diluted EPS of $3.28, up 20.6% year-over-year[5][2] - Full-year fiscal 2024 operating margin was a record 17.9%, with annual diluted EPS of $8.50[2] - Operating income for fiscal 2024 was $1.43 billion, with an operating margin of 18.6%[9] - Net earnings for the fiscal year ended February 2, 2025, were $1,125,251, a 18.5% increase from $949,762 in the prior year[24] - Basic earnings per share (EPS) rose to $8.91 for the fiscal year ended February 2, 2025, compared to $7.35 in the previous year[24] - Operating income for the fiscal year ended February 2, 2025, was $1,430,184 thousand, reflecting an increase from $1,244,193 thousand the previous year, marking a growth of about 15%[31] - Non-GAAP diluted EPS for the fiscal year ended February 2, 2025, was $8.79, compared to $7.43 for the previous year, representing an increase of approximately 18.1%[31] Revenue and Growth - Fiscal 2025 outlook projects annual net revenues to range from -1.5% to +1.5%, with comparable sales expected to be flat to +3.0%[9] - Net revenues for the fourteen weeks ended February 2, 2025, were $2,462,218, a 8.0% increase from $2,278,937 for the thirteen weeks ended January 28, 2024[21] - Total net revenues for the fiscal year ended February 2, 2025, were $7,711,541, a slight decrease of 0.5% from $7,750,652 in the prior year[24] - Pottery Barn's comparable brand revenue declined by 6.2% for the fiscal year 2024, while Williams Sonoma saw a growth of 2.4%[24] Margins and Profitability - Gross margin for Q4 was 47.3%, up 130 basis points year-over-year, driven by occupancy leverage, higher merchandise margins, and supply chain efficiencies[5] - Gross profit margin improved to 47.3% for the fourteen weeks ended February 2, 2025, compared to 46.0% for the same period last year[21] - The company reported a gross profit of $1,165,625 thousand for the fourteen weeks ended February 2, 2025, with a gross margin of 47.3%, compared to 46.0% for the thirteen weeks ended January 28, 2024[31] Expenses and Costs - SG&A expenses for Q4 totaled $635 million, an increase of 7.6% year-over-year, with an SG&A rate of 25.8%[5] - Selling, general and administrative expenses for the fourteen weeks ended February 2, 2025, were $635,484 thousand, accounting for 25.8% of revenues, compared to 25.9% in the previous period[31] - The company incurred exit costs of $17.9 million during Q1 2023, primarily related to the closure of a West Coast manufacturing facility[31] Cash and Liquidity - The company maintained a strong liquidity position with $1.2 billion in cash and $1.4 billion in operating cash flow[9] - Cash and cash equivalents decreased to $1,212,977 as of February 2, 2025, from $1,262,007 a year earlier[27] - Cash in excess of $200 million was reported at $1,012,977 thousand as of February 2, 2025, compared to $1,062,007 thousand the previous year[34] Shareholder Returns - Quarterly dividend increased by 16% to $0.66 per share[7] - The company repurchased $807,477 in common stock during the fiscal year, significantly higher than $313,001 in the previous year[30] Future Outlook - Long-term expectations include mid-to-high single-digit annual net revenue growth and operating margins in the mid-to-high teens[9] - The effective tax rate for the fiscal year ended February 2, 2025, was 24.3%, consistent with the previous year's rate of 25.4%[32] - The return on invested capital (ROIC) for the fiscal year ended February 2, 2025, was 54.0%, up from 45.0% in the prior year, indicating improved capital efficiency[34] - Total assets as of February 2, 2025, were $5,301,607 thousand, a slight increase from $5,273,548 thousand as of January 28, 2024[34]

Core Viewpoint - Williams-Sonoma, Inc. is expected to report strong financial results for the fourth quarter, with earnings and revenue projected to increase compared to the previous year [1] Financial Performance - The company is projected to report quarterly earnings of $2.93 per share, an increase from $2.72 per share in the same period last year [1] - Quarterly revenue is expected to reach $2.35 billion, up from $2.28 billion a year earlier [1] - In the third quarter, Williams-Sonoma reported better-than-expected results and approved a $1 billion stock repurchase authorization [2] Stock Performance - Following the third-quarter results, Williams-Sonoma shares rose by 4.5%, closing at $175.00 [2] Analyst Ratings - Goldman Sachs analyst Kate McShane maintained a Neutral rating and increased the price target from $170 to $224 [3] - Morgan Stanley analyst Simeon Gutman maintained an Equal-Weight rating and raised the price target from $170 to $195 [3] - Wells Fargo analyst Zachary Fadem maintained an Equal-Weight rating and increased the price target from $165 to $185 [3] - Wedbush analyst Seth Basham maintained a Neutral rating and raised the price target from $135 to $175 [3] - TD Cowen analyst Max Rakhlenko maintained a Buy rating and boosted the price target from $165 to $195 [3]

Core Viewpoint - Williams-Sonoma, Inc. is expected to report strong fourth-quarter fiscal 2024 results, driven by operational efficiencies and resilient consumer demand, despite macroeconomic challenges [9][20]. Financial Performance - In the third quarter of fiscal 2024, Williams-Sonoma reported earnings per share (EPS) of $1.96, exceeding estimates by 11.4%, and revenue of $1.80 billion, reflecting a 2.9% year-over-year decline but outperforming industry trends [2][3]. - The company achieved an operating margin of 17.8%, an improvement of 80 basis points from the previous year [2]. - The Zacks Consensus Estimate for the fourth-quarter EPS has increased, indicating a projected 7% growth from the year-ago figure, with revenues expected to reach $2.34 billion, a 2.5% year-over-year increase [5][20]. Market Position and Competitive Landscape - Williams-Sonoma has consistently surpassed earnings expectations, with an average surprise of 17.8% over the last four quarters [3][4]. - The company is well-positioned for the holiday shopping season, benefiting from improved demand in home furnishings and decor, which constitutes about 50% of its sales mix [10]. - Key competitors, including Wayfair and Ethan Allen, have also reported sequential improvements, indicating increased competition in the market [10]. Strategic Initiatives - The company's solid operating model, including full-price selling and supply chain efficiencies, is expected to mitigate headwinds in the fiscal fourth quarter [11]. - The B2B segment continues to be a significant growth driver, particularly in hospitality and corporate gifting markets, alongside global expansion efforts [12][21]. - Williams-Sonoma's focus on digital strategy and e-commerce is expected to enhance its market position, with approximately 66% of sales currently derived from online platforms [20]. Margin and Sales Trends - The company is projected to experience a 120 basis points expansion in gross margin to 47.2% year-over-year, driven by supply chain efficiencies [13]. - Comparable sales are expected to contract by 1.2% in the fiscal fourth quarter, an improvement from previous declines, indicating some stabilization in consumer demand [12]. Stock Performance and Valuation - Year-to-date, Williams-Sonoma stock has declined by 9.6%, slightly better than the Zacks Retail - Home Furnishings industry's decline of 10.4% [16]. - The company is trading at a discount to the industry average, with a trailing 12-month Return on Equity (ROE) of 51.6%, reflecting efficient use of shareholder funds [18].

Group 1 - Williams-Sonoma, Inc. is set to release its fourth-quarter financial results on March 19, with expected earnings of $2.93 per share, an increase from $2.72 per share in the previous year [1] - The company projects quarterly revenue of $2.35 billion, compared to $2.28 billion a year earlier [1] - The current annual dividend yield for Williams-Sonoma is 1.36%, translating to a quarterly dividend of 57 cents per share, or $2.28 annually [2] Group 2 - To achieve a monthly income of $500 from dividends, an investment of approximately $440,860 or around 2,632 shares is required [2] - For a more modest monthly income of $100, an investment of $88,105 or around 526 shares is necessary [2] - The dividend yield can fluctuate based on changes in the stock price and dividend payments [3][5] Group 3 - As of the last trading session, shares of Williams-Sonoma increased by 1.5%, closing at $167.50 [5]

Core Insights - The Motley Fool aims to enhance the financial literacy and well-being of individuals by providing investment solutions and market analysis [1] Company Overview - Founded in 1993, The Motley Fool is a financial services company focused on making the world smarter, happier, and richer [1] - The company reaches millions of people monthly through various platforms including premium investing solutions, free guidance, and market analysis on Fool.com [1] - The Motley Fool also produces top-rated podcasts and operates a non-profit organization, The Motley Fool Foundation [1]