Williams-Sonoma, Inc. (NYSE: WSM) shares skyrocketed 27.02% in pre-market trading on Wednesday, November 20, 2024, after the home furnishings retailer reported better-than-expected third-quarter results and raised its full-year guidance.
For the fiscal third quarter ended October 27, 2024, Williams-Sonoma reported:
Revenue of $1.8 billion, down 2.9% year-over-year but beating analysts' estimates of $1.78 billion.
Comparable brand revenue declined 2.9%, an improvement from the 14.6% drop in the same quarter last year.
Adjusted earnings per share (EPS) of $1.96, surpassing the consensus estimate of $1.77.
The solid results were driven by continued improvement in sales trends, market share gains, and strong profitability. Despite a challenging environment, the company demonstrated the strength of its margin profile, with an operating margin of 17.8%, up 80 basis points from the prior year.
"Our operating results reflect the operational improvements that we have been focused on all year, and demonstrate the strength of our margin profile in a difficult environment," said Laura Alber, President and Chief Executive Officer.
Boosted by the better-than-expected performance, Williams-Sonoma raised its full-year 2024 guidance. The company now expects:
Annual net revenue decline in the range of 1.5% to 3.0%, compared to the previous forecast of a 1.5% to 4.0% decline.
Operating margin between 18.4% and 18.8%, up from the previous range of 18.0% to 18.4%.
Additionally, the company announced a new $1 billion stock repurchase authorization, further reflecting its confidence in future prospects.
Analysts and investors praised Williams-Sonoma's ability to navigate the challenging economic environment effectively, driven by its successful holiday product launches, inventory management, and cost control measures. The company's raised guidance and share buyback program signaled optimism around continued consumer demand and potential tailwinds from further interest rate cuts by the Federal Reserve.
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