WSM

Williams-Sonoma Q1 2024 – 5.4% Revenue Drop

Williams-Sonoma, a San Francisco-based omni-channel specialty retailer, has recently released its 10-Q report. The company operates under nine brands, including Williams Sonoma, Pottery Barn, West Elm, and others, offering a wide range of home products through e-commerce websites, direct-mail catalogs, and retail stores.

In the first quarter of fiscal 2024, Williams-Sonoma reported a 5.4% decrease in net revenues, amounting to $95.1 million, with a company comparable brand revenue decline of 4.9%. The decline was attributed to customer hesitancy towards furniture purchases, although there was strength in emerging brands, children's home furnishings, and the kitchen business. The company's liquidity position was strong, with $1.3 billion in cash and cash equivalents as of April 28, 2024, and no outstanding borrowings under its revolving line of credit.

The Pottery Barn brand saw a 10.8% decline in comparable brand revenue, driven by reduced higher ticket furniture sales, partially offset by strength in textile, easy decorating, and seasonal celebrations categories. West Elm experienced a 4.1% decline in brand comp, while Williams Sonoma saw a 0.9% growth in brand comp, driven by the kitchen business, including strength in bakeware, cutlery, and food categories.

A notable event subsequent to the filing of the Form 10-K was the discovery of an over-recognition of freight expense in fiscal years 2021, 2022, and 2023, amounting to $49.0 million. The company made an out-of-period adjustment to reduce cost of goods sold and accounts payable in the first quarter of fiscal 2024.

Looking ahead, the company is focused on three key priorities: returning to growth, elevating customer service, and driving earnings. However, the uncertain macroeconomic environment, including weak housing market, elevated interest rates, layoffs, and inflationary pressure, may continue to impact results.

In terms of store data, as of April 28, 2024, Williams-Sonoma had 517 stores in operation, with a total leased square footage of 5,901,000. The company's gross profit for the first quarter of fiscal 2024 increased by $127.5 million, or 18.9%, compared to the same period in fiscal 2023, with a gross margin of 48.3%.

As a result of these announcements, the company's shares have moved 1.1% on the market, and are now trading at a price of $287.81. For the full picture, make sure to review Williams-Sonoma's 10-Q report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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