Williams-Sonoma's stock reverses higher after profit beats expectations but sales miss amid 'ongoing consumer hesitancy'

Shares of Williams-Sonoma Inc. (WSM) bounced back into positive territory in morning trading Thursday, after the home goods and furniture retailer beat profit expectations but missed on revenue and cut its full-year outlook, citing "ongoing consumer hesitancy" on high-ticket furniture spend. The stock climbed 2.9% toward a 15-month high, and has soared 12.5% amid a five-day win streak. Net income for the quarter to Oct. 29 slipped to $237.3 million, or $3.66 a share, from $251.7 million, or $3.72 a share, in the same period a year ago. The FactSet consensus for earnings per share was $3.33. Revenue dropped 15.5% to $1.85 billion, below the FactSet consensus of $1.94 billion, as same-store sales slumped 14.6% to miss expectations of an 11.5% decline. Gross margin improved to 44.4% from 41.5% as shipping and freight costs fell, and the value of inventories declined 17.2% to $1.4 billion. For fiscal 2023, the company cut its revenue growth guidance range to negative 10% to negative 12% from negative 5% to negative 10%, but raised its operating margin outlook to between 16% and 16.5% from between 15% and 16%. The stock has run up 25.1% over the past three months while the S&P 500 has gained 2.3%.

-Tomi Kilgore

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11-16-23 0949ET

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