Williams-Sonoma Grabs Market Share
The undervalued retailer remains competitively positioned with its core customer base.
Narrow-moat
Despite the strong recent performance and ongoing strength of housing fundamentals, we still believe that competition across the home furnishing space should remain fierce, with peers spending heavily on marketing and customer acquisition, racing to capture incremental discretionary spending. However, Williams-Sonoma remains competitively positioned with its core customer base thanks to its brand messaging and is working toward improving its cost structure (better inventory management and supply chain), which should help operating margins rise from current levels (up to around 10% longer term from 8.8% in 2017).
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