Williams-Sonoma kitchen display with cookware and mixer. Key Points Williams-Sonoma stands out in retail for sustaining high operating margins and returning significant capital through dividends and buybacks. Q4 2025 results showed resilient profitability despite a small revenue decline, and fiscal 2026 guidance points to continued strength. With institutional ownership near 100%, the post-earnings dip may find support, but tariffs and margin pressure remain key risks. Interested in Williams-Sonoma, I ...

Williams-Sonoma, Inc. (NYSE:WSM) is one of Jim Cramer’s latest stock calls as he shared how to navigate Wednesday’s tough tape. Cramer highlighted the company’s earnings and the following market reaction, as he said: We did have one report that was solid. It was from Williams-Sonoma, the retailer. It put up terrific numbers, but after a quick down move in pre-market trading, it flew up furiously before pulling back hard in the afternoon. I wouldn’t buy it when it was up 11, but it closed up less than two ...

Howie said gross margin was 46.9%, down 40 basis points year over year, primarily due to a 170-basis-point decline in merchandise margins as higher tariffs flowed through cost of goods sold, along with occupancy deleverage tied largely to the prior-year 53rd week. He noted shrink contributed a 160-basis-point benefit from favorable physical inventory results, and supply chain efficiencies added 50 basis points. SG&A was 26.6% of revenue, up 80 basis points, which Howie attributed mainly to lapping an indire ...

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Williams-Sonoma due to lower revenues, with actual results being crucial for stock price movement [1][3]. Earnings Expectations - Williams-Sonoma is expected to report quarterly earnings of $2.89 per share, reflecting an 11.9% decrease year-over-year [3]. - Revenue projections stand at $2.4 billion, indicating a 2.5% decline from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analyst expectations [4]. - A positive Earnings ESP of +0.35% indicates that analysts have recently become more optimistic about the company's earnings prospects [12]. Historical Performance - In the last reported quarter, Williams-Sonoma exceeded expectations by delivering earnings of $1.96 per share against an estimate of $1.87, resulting in a surprise of +4.81% [13]. - The company has beaten consensus EPS estimates in all of the last four quarters [14]. Predictive Indicators - A positive Earnings ESP combined with a Zacks Rank of 2 suggests a high likelihood of beating the consensus EPS estimate [12][10]. - Stocks with a positive Earnings ESP and a solid Zacks Rank have historically produced positive surprises nearly 70% of the time [10]. Conclusion - While Williams-Sonoma is positioned as a strong candidate for an earnings beat, other factors may also influence stock performance post-earnings release [15][17].

Strategic Positioning - The company is focusing on 'agentic shopping' and digital discovery, utilizing AI-driven tools like the 'Ranger' assistant to enhance conversion rates on owned channels [1] - A successful supply chain transformation has shifted major production exposure from China to factories in Thailand and Vietnam, improving long-term resilience [1] Market Performance - US wholesale performance indicates ongoing retailer caution and tight inventory planning, with sell-through consistently outpacing sell-in throughout the fiscal year [2] - The brand's resilience is attributed to a multiyear shift towards a diversified product portfolio, including cookware, barware, and technical hike packs [3] Financial Overview - Capital allocation priorities include $100 million in planned share repurchases, representing about 50% of the projected $200 million to $225 million in free cash flow [4] - Operating margins are projected to remain flat at approximately 14.4% for the full year, with a decline in the first half offset by an expansion in the second half [5] - Fiscal 2026 guidance anticipates 6% to 8% net sales growth, supported by a strong innovation pipeline and high-teens to 20% growth in international markets [5] Challenges and Changes - Tariffs are expected to present an $80 million headwind to the cost of goods in 2026 compared to 2024, impacting gross margins by 430 basis points over two years [5] - A leadership transition is underway with Scott Bomar appointed as CFO, succeeding Michael McMullen, who will remain in an advisory role [5] - Supply constraints in high-demand categories are expected to ease as new production capacity comes online in the first half of 2026 [5]

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Core Viewpoint - Consumers are facing economic challenges, impacting retail sales, but TJX Companies and Walmart have performed well, raising the question of which stock is a better long-term investment [1] TJX Companies - TJX operates brands like TJ Maxx, Marshalls, and HomeGoods, offering products at prices 20% to 60% lower than full-price retailers [3] - The company sources excess inventory from manufacturers at favorable prices, allowing it to offer lower prices to customers, especially during economic downturns [4] - TJX's fiscal third-quarter same-store sales grew by 5%, with positive performance across all divisions for the period ending November 1 [5] Walmart - Walmart has been successful since its inception, focusing on cost control to provide everyday low prices, making it difficult for customers to find lower prices elsewhere [6] - The company operates three segments: Walmart U.S., Walmart International, and Sam's Club, with Walmart U.S. generating the majority of revenue [7] - In the fiscal third quarter, Walmart U.S. same-store sales increased by 4.5%, driven by higher traffic contributing 1.8 percentage points [7] Investment Performance - Walmart shares returned 183% over the last five years, outperforming the S&P 500's 96.2% return [8] - Walmart's current P/E ratio is 44, significantly higher than its 10-year median of 29 and the S&P 500's 30 [9] - TJX has delivered a 145.7% return over the past 10 years, nearly 50 percentage points above the S&P 500, with a P/E ratio of 34, slightly above its 10-year median of 24 [10]

Company Performance - Williams-Sonoma's stock closed at $205.72, down 1.21%, which is less than the S&P 500's daily loss of 0.01% [1] - Over the past month, shares have appreciated by 14.8%, outperforming the Retail-Wholesale sector's gain of 4.91% and the S&P 500's gain of 0.78% [1] Upcoming Earnings - The upcoming earnings release is projected to report earnings of $2.88 per share, representing a year-over-year decline of 12.2% [2] - Revenue is estimated to be $2.42 billion, indicating a 1.67% decrease compared to the same quarter of the previous year [2] Annual Estimates - For the annual period, earnings are anticipated to be $8.69 per share, with a revenue of $7.87 billion, reflecting shifts of -1.14% and +2.06% respectively from the last year [3] Analyst Estimates - Recent modifications to analyst estimates are important as they indicate changing business trends, with positive revisions suggesting confidence in performance and profit potential [4] - The Zacks Rank system, which evaluates these estimate changes, currently ranks Williams-Sonoma at 2 (Buy) [6] Valuation Metrics - Williams-Sonoma has a Forward P/E ratio of 23.96, which aligns with the industry average [7] - The company has a PEG ratio of 3.26, compared to the Retail - Home Furnishings industry's average PEG ratio of 2.12 [7] Industry Context - The Retail - Home Furnishings industry is part of the Retail-Wholesale sector and holds a Zacks Industry Rank of 182, placing it in the bottom 26% of over 250 industries [8]

Company Overview - Williams-Sonoma, Inc. has a market cap of $25.1 billion and operates as an omni-channel specialty retailer offering a variety of high-quality home products, including cookware, furniture, décor, lighting, and personalized gifts [1] - The company manages several well-known brands such as Williams Sonoma, Pottery Barn, West Elm, and Rejuvenation through e-commerce platforms, catalogs, and retail stores [1] Earnings Expectations - Analysts anticipate that Williams-Sonoma will report an EPS of $2.88 for Q4 2025, reflecting a 12.2% decrease from $3.28 in the same quarter last year [2] - For fiscal 2025, the expected EPS is $8.69, a 1.1% decline from $8.79 in fiscal 2024, but a projected increase of 4.5% year-over-year to $9.08 in fiscal 2026 [3] Stock Performance - Over the past 52 weeks, shares of Williams-Sonoma have declined nearly 1%, underperforming the S&P 500 Index, which gained 13.6%, and the State Street Consumer Discretionary Select Sector SPDR ETF, which rose by 6.6% [4] - Despite reporting better-than-expected Q3 2025 EPS of $1.96 and revenue of $1.88 billion, shares fell by 3.4% on November 19 due to significant tariff headwinds, including 20% tariffs on imports from China and Vietnam, and 50% on imports from India, along with inventory growth of 9.6% to $1.5 billion [5] Analyst Ratings - The consensus view among analysts on WSM stock is moderately optimistic, with an overall "Moderate Buy" rating; of the 20 analysts covering the stock, six recommend "Strong Buy," one suggests "Moderate Buy," and 13 indicate "Hold" [6] - The stock is currently trading above the average analyst price target of $205.83 [6]

Group 1 - Williams-Sonoma, Inc. is highlighted for its variable tariff impact, with expectations of a modest year-over-year increase in operating margins despite tariffs [1] - The company reported a solid earnings beat, leading to an initial stock jump of over 4%, although it later finished in the red due to concerns over significant tariff impacts [2] - Williams-Sonoma owns brands such as Pottery Barn and West Elm, indicating a diversified portfolio within the home goods sector [2]