Williams-Sonoma Stock Sinks as Retailer Cuts Full-Year Revenue Outlook
Key Takeaways
Shares of Williams-Sonoma (
WSM
) tumbled in intraday trading Thursday as comparable sales fell more than expected across a number of the company’s brands, leading the retailer to cut its full-year outlook.
The company behind retail brands including its namesake stores, Pottery Barn and West Elm, reported $225.7 million in
net income
for the second quarter, better than analysts polled by Visible Alpha had expected. Total
revenue
of $1.79 billion fell 4% year-over-year and narrowly missed estimates.
FY Revenue Now Projected To Decline
Comparable sales
fell more than analysts had expected, down 0.8% at its namesake brand, 7.1% at Pottery Barn, and 4.8% at West Elm.
The struggles of higher-end retailers like Williams-Sonoma has been well-documented as inflation has led many consumers to focus spending on essentials and delay home-improvement projects or other costly updates.
Target (
TGT
) executives
said earlier this week
that the retailer has become a destination for low-cost home updates, noting they saw growth in products like candles and throw pillows in the second quarter. TJX Companies (
TJX
), the parent of retailers including HomeGoods, also
reported solid revenue growth
this week as consumers hunt for value.
Williams-Sonoma updated its fiscal 2024 outlook Thursday, expecting full-year revenue to fall 4% to 1.5%, compared with
previous projections
of a 3% drop to a 3% increase. Comparable sales are expected to decline between 5.5% and 3%, compared with a prior range of a 4.5% decline to a 1.5% increase.
Williams-Sonoma shares fell 8.6% as of about 2:30 p.m. ET Thursday to $131.54. Still, they are up 30% year-to-date.
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