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WSM Stock Up on Q2 Earnings & Revenue Beat, FY25 View Up
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Key Takeaways
WSM's Q2 EPS of $2 beat estimates by 11.7%, with revenues up 2.8% year over year to $1.84 billion.
Comps rose 3.7%, led by gains at Williams-Sonoma, West Elm and Pottery Barn Kids and Teens brands.
Operating margin expanded 240 bps to 17.9%, prompting raised FY25 revenue and comps guidance.
Williams-Sonoma Inc. (WSM - Free Report) reported results for the second-quarter fiscal 2025 (ended Aug. 3), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
Following the earnings release, shares of this multi-channel specialty retailer of premium quality home products moved up 4.1% in today’s pre-market trading session.
The quarter’s performance was driven by positive comps in both furniture and non-furniture, and strong performance in its retail and ecommerce channels. Robust trends led to the company raising its fiscal 2025 guidance.
With a strong omnichannel platform and infrastructure, going forward, the company expects to beat its expectations and multiply growth across its brands, despite macro challenges.
WSM’s Earnings, Revenues & Comps Discussion
The company reported earnings of $2 per share, which beat the Zacks Consensus Estimate of $1.79 by 11.7%. In the prior-year quarter, it reported earnings per share (EPS) of $1.74.
Net revenues of $1.84 billion also topped the consensus mark of $1.82 billion by 1.1% and grew 2.8% year over year.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
In the quarter, comps were up 3.7% against a negative 3.3% in the year-ago period.
Comps at Williams-Sonoma increased 5.1% against a 0.8% decline reported in the year-ago quarter. Comps at West Elm gained 3.3% against a 4.8% decline reported in the year-ago quarter. Pottery Barn Kids and Teens comps grew 5.3% compared with 1.5% reported in the year-ago quarter. On the other hand, Pottery Barn comps inched up 1.1% against a 7.1% decline reported in the year-ago quarter.
Operating Highlights of Williams-Sonoma
The gross margin was 47.1% (up from our projection of 44.3%), which expanded 220 basis points (bps) year over year. The increase was due to higher merchandise margins and supply-chain efficiencies.
Selling, general and administrative expenses were 29.2% of net revenues (above our projection of 29%), reflecting a decline of 20 bps year over year due to lower advertising and general expenses, partially offset by higher performance-based incentive compensation.
The operating margin expanded 240 bps from the year-ago figure to 17.9% for the quarter. Our model predicted an operating margin of 15.3% in the quarter.
Williams-Sonoma’s Financials
As of Aug. 3, 2025, Williams-Sonoma reported cash and cash equivalents of $985.8 billion, up from $1.21 billion at the fiscal 2024-end.
Net cash from operating activities totaled $401.7 million in the first six months of fiscal 2025 compared with $473.3 million a year ago. This allowed the company to return nearly $280 million to its shareholders through $199 million in stock repurchases and $81 million in dividends.
WSM Raises Fiscal 2025 Guidance
Looking ahead, fiscal 2025 will be a 52-week year compared with 53 weeks in fiscal 2024. WSM now projects annual net revenues in the range of +0.5% to +3.5% (from -1.5% to +1.5%), with comparable brand revenue growth now expected to be between +2.0% and +5.0% (from flat to +3.0%).
The company expects incremental tariff costs to impact net revenues, including the additional tariffs on China of 30%, India of 50%, Vietnam of 20%, an average tariff on the rest of the world of 18%, as well as the steel and aluminum tariff of 50% and the copper tariff of 50%.
Operating margin guidance still stands between 17.4% and 17.8%.
Over the long term, the company anticipates mid-to-high single-digit net revenue growth and operating margins in the mid-to-high teens.
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same.
The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter, with a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. Management of Lowe’s also updated its full-year outlook following the completion of the Artisan Design Group (“ADG”) acquisition. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5-$84.5 billion.
The Home Depot Inc. (HD - Free Report) has reported second-quarter fiscal 2025 results, wherein both the sales and earnings missed the Zacks Consensus Estimate. However, both metrics improved year over year. Also, comparable sales increased year over year.
Home Depot is confident about its initiatives to strengthen the business. Management highlighted continued momentum in smaller home-improvement projects and reiterated its focus on building the best interconnected experience for customers and growing share, while reaffirming fiscal 2025 guidance. It anticipates sales to increase 2.8% year over year, with adjusted EPS expected to fall 2%.
Brinker International, Inc. (EAT - Free Report) reported fourth-quarter fiscal 2025 results, with both earnings and revenues surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues beat the consensus estimate for the sixth consecutive quarter.
Chili's performance catalyzed the company's quarterly results. The growth was driven by the strong marketing ideas, simpler menu items and increased traffic. A key factor in Chili’s revival was focusing on the core elements that originally made the brand great and finding ways to make those strengths relevant for today’s customers. In fiscal 2026, Brinker anticipates total revenues to be in the range of $5.60-$5.70 billion, with adjusted EPS in the range of $9.90-$10.50.
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WSM Stock Up on Q2 Earnings & Revenue Beat, FY25 View Up
Key Takeaways
Williams-Sonoma Inc. (WSM - Free Report) reported results for the second-quarter fiscal 2025 (ended Aug. 3), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
Following the earnings release, shares of this multi-channel specialty retailer of premium quality home products moved up 4.1% in today’s pre-market trading session.
The quarter’s performance was driven by positive comps in both furniture and non-furniture, and strong performance in its retail and ecommerce channels. Robust trends led to the company raising its fiscal 2025 guidance.
With a strong omnichannel platform and infrastructure, going forward, the company expects to beat its expectations and multiply growth across its brands, despite macro challenges.
WSM’s Earnings, Revenues & Comps Discussion
The company reported earnings of $2 per share, which beat the Zacks Consensus Estimate of $1.79 by 11.7%. In the prior-year quarter, it reported earnings per share (EPS) of $1.74.
Net revenues of $1.84 billion also topped the consensus mark of $1.82 billion by 1.1% and grew 2.8% year over year.
Williams-Sonoma, Inc. Price, Consensus and EPS Surprise
Williams-Sonoma, Inc. price-consensus-eps-surprise-chart | Williams-Sonoma, Inc. Quote
In the quarter, comps were up 3.7% against a negative 3.3% in the year-ago period.
Comps at Williams-Sonoma increased 5.1% against a 0.8% decline reported in the year-ago quarter. Comps at West Elm gained 3.3% against a 4.8% decline reported in the year-ago quarter. Pottery Barn Kids and Teens comps grew 5.3% compared with 1.5% reported in the year-ago quarter. On the other hand, Pottery Barn comps inched up 1.1% against a 7.1% decline reported in the year-ago quarter.
Operating Highlights of Williams-Sonoma
The gross margin was 47.1% (up from our projection of 44.3%), which expanded 220 basis points (bps) year over year. The increase was due to higher merchandise margins and supply-chain efficiencies.
Selling, general and administrative expenses were 29.2% of net revenues (above our projection of 29%), reflecting a decline of 20 bps year over year due to lower advertising and general expenses, partially offset by higher performance-based incentive compensation.
The operating margin expanded 240 bps from the year-ago figure to 17.9% for the quarter. Our model predicted an operating margin of 15.3% in the quarter.
Williams-Sonoma’s Financials
As of Aug. 3, 2025, Williams-Sonoma reported cash and cash equivalents of $985.8 billion, up from $1.21 billion at the fiscal 2024-end.
Net cash from operating activities totaled $401.7 million in the first six months of fiscal 2025 compared with $473.3 million a year ago. This allowed the company to return nearly $280 million to its shareholders through $199 million in stock repurchases and $81 million in dividends.
WSM Raises Fiscal 2025 Guidance
Looking ahead, fiscal 2025 will be a 52-week year compared with 53 weeks in fiscal 2024. WSM now projects annual net revenues in the range of +0.5% to +3.5% (from -1.5% to +1.5%), with comparable brand revenue growth now expected to be between +2.0% and +5.0% (from flat to +3.0%).
The company expects incremental tariff costs to impact net revenues, including the additional tariffs on China of 30%, India of 50%, Vietnam of 20%, an average tariff on the rest of the world of 18%, as well as the steel and aluminum tariff of 50% and the copper tariff of 50%.
Operating margin guidance still stands between 17.4% and 17.8%.
Over the long term, the company anticipates mid-to-high single-digit net revenue growth and operating margins in the mid-to-high teens.
WSM’s Zacks Rank & Recent Retail-Wholesale Releases
Williams-Sonoma currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lowe’s Companies, Inc. (LOW - Free Report) posted second-quarter fiscal 2025 results with year-over-year growth in both the top and bottom lines. While revenues came in just shy of the Zacks Consensus Estimate, earnings surpassed the same.
The Mooresville, NC-based home improvement retailer returned to positive comparable sales during the quarter, with a 1.1% increase in comparable sales as both Pro and DIY customers contributed despite a challenging start to the quarter from the weather. Management of Lowe’s also updated its full-year outlook following the completion of the Artisan Design Group (“ADG”) acquisition. Total sales are now projected between $84.5 billion and $85.5 billion, up from the prior range of $83.5-$84.5 billion.
The Home Depot Inc. (HD - Free Report) has reported second-quarter fiscal 2025 results, wherein both the sales and earnings missed the Zacks Consensus Estimate. However, both metrics improved year over year. Also, comparable sales increased year over year.
Home Depot is confident about its initiatives to strengthen the business. Management highlighted continued momentum in smaller home-improvement projects and reiterated its focus on building the best interconnected experience for customers and growing share, while reaffirming fiscal 2025 guidance. It anticipates sales to increase 2.8% year over year, with adjusted EPS expected to fall 2%.
Brinker International, Inc. (EAT - Free Report) reported fourth-quarter fiscal 2025 results, with both earnings and revenues surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues beat the consensus estimate for the sixth consecutive quarter.
Chili's performance catalyzed the company's quarterly results. The growth was driven by the strong marketing ideas, simpler menu items and increased traffic. A key factor in Chili’s revival was focusing on the core elements that originally made the brand great and finding ways to make those strengths relevant for today’s customers. In fiscal 2026, Brinker anticipates total revenues to be in the range of $5.60-$5.70 billion, with adjusted EPS in the range of $9.90-$10.50.