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Williams-Sonoma (WSM) Up 9.7% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Williams-Sonoma (WSM - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Williams-Sonoma due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Williams-Sonoma Q3 Earnings & Revenues Top, Comps Up Y/Y
Williams-Sonoma reported better-than-expected results for the third quarter of fiscal 2025 (ended Nov. 2), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
The quarter’s performance reflects benefits realized from an effective operating model, diversified brand portfolios and a robust e-commerce channel. For fiscal 2025, WSM holds onto its prior net revenue and comps outlook, while increasing the operating margin view.
Going forward, the company remains focused on product development and customer service while navigating ongoing macroeconomic and geopolitical uncertainties.
Q3 Earnings, Revenues & Comps Discussion
The company reported earnings of $1.96 per share, which topped the Zacks Consensus Estimate of $1.87 by 4.8%. In the prior-year quarter, it reported earnings per share (EPS) of $1.87.
Net revenues of $1.88 billion also topped the consensus mark of $1.86 billion by 1.1% and grew 4.4% year over year.
In the quarter, comps were up 4% against a negative 2.9% in the year-ago period.
Comps at Williams-Sonoma (namesake brand) grew 7.3% against a 0.1% downturn reported in the year-ago quarter. Comps at West Elm gained 3.3% against a 3.5% decline reported in the year-ago quarter.
Pottery Barn Kids and Teens comps grew 4.4% compared with 3.8% reported in the year-ago quarter. On the other hand, Pottery Barn comps inched up 1.3% against a 7.5% decline reported in the year-ago quarter.
Operating Highlights
The gross margin was 46.1%, which expanded 70 basis points (bps) year over year. The growth was driven by higher merchandise margins and supply-chain efficiencies, partially offset by higher occupancy costs.
Selling, general and administrative expenses were 29.1% of net revenues, reflecting an increase of 60 bps year over year due to higher advertising expense and elevated performance-based incentive compensation.
The operating margin expanded 10 bps from the year-ago figure to 17% for the quarter.
Financial Position
As of Nov. 2, 2025, Williams-Sonoma reported cash and cash equivalents of $884.7 million, down from $1.21 billion at the fiscal 2024-end.
Net cash from operating activities totaled $718 million in the first nine months of fiscal 2025 compared with $726.7 million a year ago. This allowed the company to return nearly $165 million to its shareholders through $555.7 million in stock repurchases and $236.6 million in dividends.
Revised Fiscal 2025 Guidance
Looking ahead, fiscal 2025 will be a 52-week year compared with 53 weeks in fiscal 2024. The company continues to project annual net revenues in the range of +0.5% to +3.5%, with comparable brand revenue growth between +2.0% and +5.0%. Operating margin is now expected between 17.8% and 18.1% (from the 17.4-17.8% range expected earlier), which compares unfavorably with 18.5% reported in fiscal 2024.
The revised outlook considers the new Section 232 tariffs on furniture; the revised additional tariffs on China of 20%, India of 50% and Vietnam of 20%; average tariffs on the rest of the world of 18%; the steel and aluminum tariff of 50% and the copper tariff of 50%.
Over the long term, WSM continues to anticipate mid-to-high single-digit annual net revenue growth and operating margin growth in the mid-to-high teens.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Williams-Sonoma has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Williams-Sonoma has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Williams-Sonoma (WSM) Up 9.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Williams-Sonoma (WSM - Free Report) . Shares have added about 9.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Williams-Sonoma due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Williams-Sonoma Q3 Earnings & Revenues Top, Comps Up Y/Y
Williams-Sonoma reported better-than-expected results for the third quarter of fiscal 2025 (ended Nov. 2), with earnings and net revenues beating the Zacks Consensus Estimate and increasing year over year.
The quarter’s performance reflects benefits realized from an effective operating model, diversified brand portfolios and a robust e-commerce channel. For fiscal 2025, WSM holds onto its prior net revenue and comps outlook, while increasing the operating margin view.
Going forward, the company remains focused on product development and customer service while navigating ongoing macroeconomic and geopolitical uncertainties.
Q3 Earnings, Revenues & Comps Discussion
The company reported earnings of $1.96 per share, which topped the Zacks Consensus Estimate of $1.87 by 4.8%. In the prior-year quarter, it reported earnings per share (EPS) of $1.87.
Net revenues of $1.88 billion also topped the consensus mark of $1.86 billion by 1.1% and grew 4.4% year over year.
In the quarter, comps were up 4% against a negative 2.9% in the year-ago period.
Comps at Williams-Sonoma (namesake brand) grew 7.3% against a 0.1% downturn reported in the year-ago quarter. Comps at West Elm gained 3.3% against a 3.5% decline reported in the year-ago quarter.
Pottery Barn Kids and Teens comps grew 4.4% compared with 3.8% reported in the year-ago quarter. On the other hand, Pottery Barn comps inched up 1.3% against a 7.5% decline reported in the year-ago quarter.
Operating Highlights
The gross margin was 46.1%, which expanded 70 basis points (bps) year over year. The growth was driven by higher merchandise margins and supply-chain efficiencies, partially offset by higher occupancy costs.
Selling, general and administrative expenses were 29.1% of net revenues, reflecting an increase of 60 bps year over year due to higher advertising expense and elevated performance-based incentive compensation.
The operating margin expanded 10 bps from the year-ago figure to 17% for the quarter.
Financial Position
As of Nov. 2, 2025, Williams-Sonoma reported cash and cash equivalents of $884.7 million, down from $1.21 billion at the fiscal 2024-end.
Net cash from operating activities totaled $718 million in the first nine months of fiscal 2025 compared with $726.7 million a year ago. This allowed the company to return nearly $165 million to its shareholders through $555.7 million in stock repurchases and $236.6 million in dividends.
Revised Fiscal 2025 Guidance
Looking ahead, fiscal 2025 will be a 52-week year compared with 53 weeks in fiscal 2024. The company continues to project annual net revenues in the range of +0.5% to +3.5%, with comparable brand revenue growth between +2.0% and +5.0%. Operating margin is now expected between 17.8% and 18.1% (from the 17.4-17.8% range expected earlier), which compares unfavorably with 18.5% reported in fiscal 2024.
The revised outlook considers the new Section 232 tariffs on furniture; the revised additional tariffs on China of 20%, India of 50% and Vietnam of 20%; average tariffs on the rest of the world of 18%; the steel and aluminum tariff of 50% and the copper tariff of 50%.
Over the long term, WSM continues to anticipate mid-to-high single-digit annual net revenue growth and operating margin growth in the mid-to-high teens.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Williams-Sonoma has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Williams-Sonoma has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.