Williams-Sonoma, Inc. has released its first quarter 2025 results, showing a 3.4% increase in comparable brand revenue compared to the same period in 2024. The company reported a gross margin of 44.3%, which is a decrease of 360 basis points from the prior year, primarily driven by lower merchandise margins.
Operating income for the first quarter of 2025 was $291 million, with an operating margin of 16.8%, down 230 basis points from the same period in 2024. However, excluding a prior year benefit from an out-of-period freight adjustment in Q1 FY24, the operating margin was up 70 basis points from the prior year.
Diluted earnings per share (EPS) for the first quarter of 2025 was $1.85, representing a 7.0% decrease from the prior year. Excluding the prior year benefit from the out-of-period freight adjustment, EPS was up 8.8% from the prior year.
The company strategically increased merchandise inventories by 10.3% to $1.3 billion in the first quarter of 2025, including a pull forward of receipts to mitigate potential impacts of higher tariffs in FY25. Williams-Sonoma also maintained a strong liquidity position with $1.0 billion in cash and $119 million in operating cash flow, enabling the return of $165 million to stockholders through stock repurchases and dividends.
The company reiterates its full-year outlook for fiscal 2025, expecting annual net revenues in the range of -1.5% to +1.5% and comps in the range of flat to +3.0%. The operating margin is expected to be between 17.4% to 17.8%, inclusive of the impact from the 53rd week in fiscal 2024 of 20 basis points.
Following these announcements, the company's shares moved -4.1%, and are now trading at a price of $161.035. For more information, read the company's full 8-K submission here.
