On Wednesday, Goldman Sachs maintained its Sell rating on Williams-Sonoma (NYSE:WSM), with a steady stock price target of $154.00, following the company's fourth-quarter earnings report. Williams-Sonoma's earnings per share (EPS) for the quarter were $5.44, surpassing Goldman Sachs' and consensus estimates of $4.93 and $5.12 respectively.
This outperformance was attributed to a smaller-than-expected comparable sales decline of 6.8%, better than the anticipated 9.3%, and a gross margin of 46.0%, which exceeded the consensus projection of 44.5%.
The home furnishings retailer reported quarterly sales of $2.279 billion, topping the consensus estimate of $2.233 billion. Looking ahead, Williams-Sonoma provided fiscal year 2024 guidance, projecting revenue growth between -3% and +3%.
The midpoint of this range is above the consensus expectation of a 1.3% decline. Comparable sales are forecasted to vary between -4.5% to +1.5%, with the midpoint slightly surpassing the consensus estimate of a 1.9% decline.
The company anticipates an operating margin for FY24 between 16.5% and 16.8%, with the midpoint exceeding the consensus of 16.1%. Williams-Sonoma also reaffirmed its long-term revenue growth guidance of mid-single-digit to high-single-digit percentages annually, with an operating margin in the mid to high teens.
Moreover, the company has increased its share repurchase authorization to $1 billion and has boosted its quarterly dividend by 26% to $1.13 per share. Following these announcements, the stock saw an approximate 10% increase in its trading price.
During the earnings call held on Wednesday, the focus was on various aspects of the company's performance and outlook. Topics of interest included the breakdown of comparable sales throughout the quarter, performance trends across different brand banners, challenges related to supply chain and costs, the company's strategy on promotions, current quarter-to-date commentary, and further details on the fiscal year 2024 guidance.
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