Williams-Sonoma Inc. WSM reported solid results for fourth-quarter fiscal 2024 (ended Feb. 2, 2025), with earnings and net revenues topping the Zacks Consensus Estimate. On a year-over-year basis, both metrics grew.
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Williams-Sonoma demonstrated strong execution in the final quarter of fiscal 2024, with improved revenue growth, record operating margins, and robust earnings performance. The company’s disciplined cost management and strategic investments in digital and retail channels position it well for future growth despite potential macroeconomic uncertainties.
The company also announced a 16% increase in its quarterly dividend to 66 cents per share.
WSM shares gained 0.3% in the after-hour trading session yesterday.
WSM’s Earnings, Revenues & Comps Discussion
The company reported earnings of $3.28 per share, which surpassed the Zacks Consensus Estimate of $2.91 by 12.7%. In the prior-year quarter, it reported earnings per share (EPS) of $2.72. This reflects the company’s strong cost discipline and operational efficiencies. The additional week in the fourth quarter of fiscal 2024 contributed an estimated 60 basis points (bps) to the operating margin.
Net revenues of $2.46 billion also topped the consensus mark of $2.34 billion by 5.4% and grew 8% year over year. The 14-week reporting period (compared to 13 weeks in the year-ago quarter) provided an estimated 510 bps boost to revenue growth.
In the quarter, comps were up 3.1% against a negative 6.8% in the year-ago period. Our model predicted comps decline of 1.2% in the quarter.
Comps at Williams-Sonoma increased 5.7% compared with 1.6% growth reported in the year-ago quarter. Comps at West Elm gained 4.2% against a 15.3% decline reported in the year-ago quarter. Pottery Barn Kids and Teens comps grew 3.5% against a 2.5% decline in the year-ago quarter. On the other hand, Pottery Barn comps inched down 0.5% compared with a 9.6% decline reported in the year-ago quarter.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Williams-Sonoma, Inc. price-consensus-eps-surprise-chart | Williams-Sonoma, Inc. Quote
Operating Highlights of Williams-Sonoma
The gross margin was 47.3% (above our projection of 47.2%), which expanded 130 bps from the year-ago period. The increase was due to higher merchandise margins, occupancy leverage and supply-chain efficiencies.
Selling, general and administrative expenses were 25.8% of net revenues (below our projection of 27.4%), reflecting an improvement of 10 bps year over year due to lower general expenses. This was partially offset by higher performance-based incentive compensation and advertising costs.
The operating margin expanded 140 bps from the year-ago figure to 21.5% for the quarter. Our model predicted an operating margin of 19.8% in the quarter.
Williams-Sonoma’s Fiscal 2024 Summary
In fiscal 2024, WSM reported a 1.6% decline in comparable brand revenue, much better than the 9.9% decline in fiscal 2023. However, the company achieved a record annual operating margin of 17.9% (excluding a one-time freight adjustment in the first quarter). Full-year EPS rose 14.4% to $8.50. Net revenues declined marginally by 0.5% to $7.71 billion.
The company’s return on invested capital reached an impressive 54.0%, highlighting its strong profitability and efficient use of capital.
Williams-Sonoma’s Financials
At fiscal 2024-end, Williams-Sonoma reported cash and cash equivalents of $1.21 billion, down from $1.26 billion in the fiscal 2023-end.
Net cash from operating activities totaled $1.36 billion in fiscal 2024, down from $1.68 billion a year ago. This allowed the company to return nearly $1.1 billion to shareholders through $807 million in stock repurchases and $280 million in dividends.
WSM’s Fiscal 2025 Guidance
Looking ahead, fiscal 2025 will be a 52-week year, compared to 53 weeks in fiscal 2024. WSM projects annual net revenues in the range of -1.5% to +1.5%, with comparable brand revenue growth expected to be flat to +3.0%. Operating margin guidance stands between 17.4% and 17.8%.
Over the long term, the company anticipates mid-to-high single-digit revenue growth and operating margins in the mid-to-high teens.
Williams-Sonoma currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Home Depot Inc. HD has reported fourth-quarter fiscal 2024 results, wherein earnings and sales surpassed the Zacks Consensus Estimate and improved year over year. Home Depot's adjusted earnings of $3.13 per share increased 9.4% from $2.82 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.04 per share.
Home Depot anticipates fiscal 2025 sales to increase 2.8% year over year. The company expects comparable sales to increase 1% for the 52 weeks.
Wayfair W closed 2024 with a slight increase in revenue, reporting a total net revenue of $3.1 billion in the fourth quarter of 2024, beating the consensus mark by 1.7%. This marked a modest 0.2% year-over-year increase, indicating a stabilization in sales following previous declines. The company’s loss came in at 25 cents per share, missing the consensus mark of a profit of 2 cents.
Despite revenue gains, Wayfair remained in the red, posting a net loss of $128 million. However, this was an improvement from the $174 million loss recorded in the year-ago quarter. Wayfair’s fourth-quarter 2024 results indicate resilience in a challenging retail environment, with improving financial health and strategic investments aimed at sustained profitability. However, challenges remain in international markets and customer retention, requiring focused efforts to drive future growth.
Ethan Allen Interiors Inc.’s ETD reported the second quarter of fiscal 2025 consolidated net sales of $157.3 million, which represents a 6% decline from the $167.3 million reported a year ago. The company reported an EPS of 59 cents compared with 68 cents in the prior year. The decline in profitability was attributed to softer sales, increased operational expenses, and restructuring charges.
Ethan Allen’s gross margin remained stable at 60.3%, a slight improvement over the 60.2% a year ago. However, the operating margin dipped to 11.5% from the previous year's 13.0%, mainly due to higher advertising expenses, which increased to 2.5% of net sales from 2.0%.
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