Williams-Sonoma (WSM) Q2 2026 Earnings Call August 27, 2025 10:00 AM ET Company ParticipantsJeremy Brooks - SVP, Chief Accounting Officer & Head - IRLaura Alber - President, CEO & DirectorJeff Howie - EVP & CFOOliver Wintermantel - Managing DirectorSteven Zaccone - Director & Equity Research - Hardlines RetailSimeon Gutman - Managing DirectorConference Call ParticipantsNone - AnalystPeter Benedict - Senior Research AnalystMichael Lasser - Equity Research Analyst - Hardlines, Broadlines & Food RetailCristina ...

Group 1 - Kroger is set to announce its fiscal first-quarter earnings on June 20, 2025, with analysts expecting earnings of $1.46 per share and revenue of $45.3 billion, indicating a 12% year-over-year increase in earnings while sales growth remains flat [2] - In FY 2024, Kroger's same-store sales increased by 1.5%, and gross margin improved by 50 basis points to 22.3%, although adjusted EPS fell by 6% [3] - The company has a market capitalization of $44 billion, generated $147 billion in revenue over the last twelve months, and reported $3.8 billion in operating profits and $2.7 billion in net income [4] Group 2 - Historical trends indicate that Kroger's stock has risen 55% of the time after earnings announcements, with a median increase of 5.4% in one day [2][6] - The percentage of positive one-day returns post-earnings increases to 64% when analyzing data from the past three years, with a median of 5.4% for positive returns and -3.0% for negative returns [6][8] - The company plans to mitigate risks from trade tensions and tariffs by diversifying suppliers and optimizing its supply chain, although the recent departure of CEO Rodney McMullen may complicate these efforts [4]

Financial Performance - The company's revenue was HK$2825.994 million, a decrease compared to HK$2920.775 million in the previous year[33] - Net profit reached HK$181.875 million, down from HK$220.318 million in the previous year[33] - Gross margin increased to 46.4% from 45.7%[33] - Operating margin decreased to 8.0% from 9.5%[33] - Net margin decreased to 6.4% from 7.5%[33] - Total dividend was 22.0 HK cents, compared to 26.7 HK cents in the previous year[33] - Cash and cash equivalents amounted to HK$402.310 million, a slight decrease from HK$416.923 million[35] Business Strategy & Expansion - Hong Kong sales accounted for 88.0% of group revenues, a decrease from 89.3%[39] - Singapore sales accounted for 10.2% of group revenues, an increase from 9.1%[40] - The company plans to expand its store network, with a net increase of 7 stores in FY24 and 10 stores in FY25 across Hong Kong, Macau, and Singapore[63]

Financial Performance - The company's revenue for the first half of FY2025 was HK$1.27 billion, a decrease compared to HK$1.32 billion in the same period of FY2024[34] - Gross profit decreased from HK$618.82 million in 1H FY2024 to HK$596.68 million in 1H FY2025[34] - Profit attributable to owners of the company decreased from HK$50.76 million in 1H FY2024 to HK$32.96 million in 1H FY2025[34] - The interim dividend decreased from HK 5.6 cents/share to HK 4 cents/share[26, 34] - The company's cash and bank balance was HK$308 million[26] - The gross margin increased slightly from 46.8% to 47.0%[26, 34] - Operation profit margin decreased from 5.1% to 3.7%[34] - Net profit margin decreased from 3.7% to 2.4%[34] Store Network - The company has a physical store retail network of 314 stores in Hong Kong and 62 overseas stores[28] - The number of stores in Singapore increased by 1, from 47 to 48[29, 30] - As of October 2024, the company operated 314 stores in Hong Kong, 48 in Singapore, and 9 in Macau[28, 29, 30, 44, 46, 67] Market Performance - Revenue from Hong Kong was HK$1.10 billion[44] and accounted for 86.6% of the total revenue[42] - Singapore contributed 11.6% to the group's revenue, with revenue of HK$147.99 million[42, 46] - Macau's revenue contribution was 1.8% of the total revenue[42] Strategies and Outlook - The company will focus on Hong Kong, Singapore, and Macau markets[50] - The company plans to expand its store network with a net increase of 1 store in Hong Kong in 2H FY2025 and 3 in FY2026[67] - The company plans to expand its store network with a net increase of 1 store in Singapore in FY2026[67] - The company plans to expand its store network with a net increase of 1 store in Macau in FY2026[67]

Core Insights - Kirkland's, Inc. announced a significant transformation, including a corporate reorganization and changes to its Board of Directors, aiming to enhance performance and profitability as a multi-brand retail operator [1][19][20]. Financial Performance - For the first quarter of 2025, net sales were $81.5 million, down from $91.8 million in the same period last year, primarily due to declines in e-commerce and comparable store sales [4][8]. - Comparable sales decreased by 8.9%, with a 3.1% drop in comparable store sales and a 26.7% decline in e-commerce sales [4][8]. - Gross profit was $20.3 million, representing 24.9% of net sales, compared to $27.1 million or 29.5% of net sales in the prior year [5][8]. - Operating expenses were $30.8 million, or 37.8% of net sales, a slight decrease from $34.6 million or 37.7% of net sales in the previous year [6][8]. - The operating loss for the quarter was $10.5 million, compared to a loss of $7.5 million in the prior year [7][8]. - Net loss was $11.8 million, or a loss of $0.54 per diluted share, compared to a loss of $8.8 million or $0.68 per diluted share in the prior year [8][11]. Operational Changes - The company is focusing on moving excess and slower-turning inventory and eliminating underperforming assets while expanding the utilization of licenses from Bed Bath & Beyond, Overstock, and buybuy Baby [3][19]. - Kirkland's plans to rebrand itself as "The Brand House Collective, Inc." pending shareholder approval, reflecting its transformation into a multi-brand merchandising and retail operator [19][20]. Debt and Financial Position - As of May 3, 2025, the company had a cash balance of $3.5 million and $38.9 million in outstanding debt [13][17]. - The company closed a $5.2 million expansion of its existing credit agreement with Beyond, which also included amendments to existing transactions [15][16]. - The company experienced disruptions at its Jackson, Tennessee distribution center due to a tornado, impacting its e-commerce operations [18]. Inventory and Store Count - Inventory as of May 3, 2025, was $76.4 million, a 0.8% increase compared to the prior year [12]. - The company closed three stores during the quarter, ending with a total of 314 stores [8].

Core Viewpoint - National Presto Industries, Inc. has experienced a significant decline in stock performance despite reporting strong earnings growth, particularly in its Defense segment, while facing challenges in consumer-facing segments due to tariffs and elevated material costs [1][5][6]. Financial Performance - The company reported first-quarter 2025 earnings per share of $1.07, up from 92 cents a year ago [2]. - Net sales reached $103.6 million, a 35.2% increase from $76.7 million in the prior-year period [2]. - Net earnings rose to $7.6 million, reflecting a 15.9% increase from $6.6 million in the first quarter of 2024 [2]. Segment Performance - The Defense segment saw sales surge by $25.9 million, or 47.1%, driven by increased backlog shipments [3]. - Operating earnings in the Defense segment climbed by $4.9 million or 58.6% [3]. - The Housewares/Small Appliance and Safety segments showed only nominal gains, with the Small Appliance business posting an operating loss due to unfavorable product mix and elevated material costs [4]. Management Insights - President Maryjo Cohen highlighted Defense growth as the main driver of overall performance, attributing it to increased shipments from backlog [5]. - Challenges in the Housewares segment were noted, particularly due to the impact of "Trump tariffs" set at 145% on certain imported goods, which significantly affected earnings [5]. - The company has paused new product announcements and purchasing activity in response to these challenges [5]. Cost Environment - Elevated material costs and punitive tariff rates have pressured margins, especially in the Housewares/Small Appliance segment [6]. - Tariff-related expenses were expensed immediately, further impacting profitability [6]. - The Safety segment continued to be a drag on overall profitability despite improved sales [6]. Portfolio Income - The company's portfolio earnings were described as "nominal" due to capital allocation needs in the Defense business [7]. - Increased inventory investments to support expanded Defense contracts limited funds available for interest or dividend-yielding instruments [7].

Financial Data and Key Metrics Changes - The company reported a net sales increase of 3% to $667 million for the fourth quarter, driven by new stores and comparable sales growth, with an 8.5% increase when excluding the impact of last year's extra week of sales [13] - Adjusted net income was $73 million, with adjusted earnings per share at $1.19, and adjusted EBITDA was $109 million with an EBITDA margin of 16.4% for the quarter [16] - Gross margin increased by 20 basis points to 40.7%, primarily due to lower supply chain costs, although slightly offset by a lower merchandise margin [15] Business Line Data and Key Metrics Changes - Comparable store sales grew by 2.8%, driven by equal increases in both transactions and basket size, with strong performance in housewares, food and candy, electronics, and room air categories [13][14] - Membership in "Ali's Army" increased over 8% to over 15.1 million members, with sales to members representing over 80% of total sales [14] Market Data and Key Metrics Changes - The company ended the quarter with 559 stores across 31 states, marking a 9% year-over-year increase, having opened 13 new stores in the quarter and 50 for the fiscal year [14] - The company is positioned to benefit from the closure of competitors, particularly Big Lots, with an addressable market share opportunity estimated at $2.7 billion [38] Company Strategy and Development Direction - The company announced an agreement to acquire 40 additional store leases from former Big Lots locations, which are expected to generate outsized profitability due to below-market rents and long-term leases [9] - The company aims to open approximately 75 new stores in the upcoming fiscal year, with a focus on accelerating growth while maintaining a strong balance sheet [20][19] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers remain under pressure, which bodes well for the company's value-oriented offerings, and they expect to thrive in this environment [6][27] - The long-term growth algorithm is projected at 10% unit growth, with comparable store sales growth of 1% to 2%, and gross margin expected to remain around 40% [19] Other Important Information - The company has initiated a new $300 million share buyback program, demonstrating a commitment to returning capital to investors while pursuing growth opportunities [18] - The company is experiencing a stable business model in the closeout market, with consistent availability of merchandise due to various market drivers [10] Q&A Session Summary Question: Assessment of the consumer state and outlook for 2025 - Management indicated that consumers are under pressure but the company thrives in such environments, with strong performance in consumables driving traffic [26][27] Question: Gross margin expectations for 2025 - Management expects gross margin to remain around 40%, with stable supply chain costs and a good buying environment anticipated [29][30] Question: Impact of Big Lots closures on sales - Management noted that the impact was less than expected, with some positive momentum observed post-liquidation [35][37] Question: Progress on private label credit card - The credit card rollout is expected to be completed by the end of Q1, with initial indications showing higher basket sizes for credit card customers [45] Question: Dead rent dynamics and flow-through expectations - Management explained that the acquired stores will incur dead rent, impacting flow-through, but long-term profitability is expected to be strong [50][51] Question: Category performance and sales productivity - Management noted strong performance in consumables, while discretionary categories faced challenges due to weather [114]