Williams-Sonoma, Inc. ($WSM) Reports First Quarter 2024 ResultsWilliams-Sonoma, Inc. ( NYSE:WSM ) announced its first quarter 2024 results, showing a comparable brand revenue of -4.9% and an operating margin of 19.5%. The company's President and CEO, Laura Alber, expressed satisfaction with the results, citing improved top-line trends and continued profitability. The company's gross margin increased by 690bps compared to the LY GAAP basis, driven by higher merchandise margins and supply chain efficiencies. Occupancy costs increased by -3.2% to the LY GAAP basis.
The company's SG&A rate increased by 28.8% to +170bps due to higher advertising spend and incentive compensation. Operating income reached $324 million with an operating margin of 19.5%, and diluted EPS was $4.07 per share. The company maintained a strong liquidity position of $1.3 billion in cash and operating cash flow of $227 million, enabling it to deliver returns to stockholders of $107 million through dividends and stock repurchases.
The company over-recognized freight expense in fiscal years 2021, 2022, and 2023 for a cumulative amount of $49 million. The Condensed Consolidated Financial Statements for the thirteen weeks ended April 28, 2024, include an out-of-period adjustment of $49 million to reduce the cost of goods sold and accounts payable. The company is reiterating its guidance of annual net revenue growth in the range of -3% to +3% with comps in the range of -4.5% to +1.5% in fiscal 2024.
The company is raising its guidance on its operating margin for fiscal 2024, expecting an operating margin between 17.6% to 18.0%, including the impact of the out-of-period adjustment of 60bps. Without this adjustment, the company expects an operating margin between 17.0% to 17.4% in fiscal 2024.
Fiscal 2024 is a 53-week year, with financial statements prepared on a 53-week basis in fiscal 2024 and a 52-week basis in fiscal 2023. The additional week in fiscal 2024 is expected to contribute 150bps to net revenue growth and 10bps to operating margin. Over the long term, the company continues to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens.
Technical Outlook
Williams-Sonoma stock ( NYSE:WSM ) is up 23% in Wednesday's Pre-market trading previously closing with a Relative Strength Index (RSI) of 60.37. The stock has formed a mini double-shoulder top pattern.
Williamsonoma
Williams-Sonoma, Inc. Announces 26% Quarterly Dividend IncreaseWilliams-Sonoma, Inc. (NYSE: NYSE:WSM ) has announced significant moves aimed at enhancing shareholder value, including a substantial increase in its quarterly dividend and the authorization of a new $1 billion stock repurchase program. These strategic decisions underscore the company's confidence in its financial strength and commitment to delivering returns to its shareholders.
Boosting Shareholder Returns:
Williams-Sonoma's ( NYSE:WSM ) Board of Directors has approved a remarkable 26% increase in the company's quarterly cash dividend, now set at $1.13 per common share. This dividend hike reflects the company's robust performance and its dedication to rewarding shareholders. Additionally, the announcement of a new $1 billion stock repurchase authorization further reinforces Williams-Sonoma's commitment to maximizing shareholder value.
Management's Perspective:
Laura Alber, President and Chief Executive Officer of Williams-Sonoma, expressed pride in the company's achievements and its ability to bolster shareholder returns. She highlighted the company's strong finish in 2023, which paved the way for these strategic moves aimed at delivering long-term value. Jeff Howie, Chief Financial Officer, echoed this sentiment, emphasizing Williams-Sonoma's consistent profitability and strong cash flows, which have enabled the company to provide significant returns to its shareholders over the years.
Strategic Utilization of Capital:
The new stock repurchase authorization, effective immediately, provides Williams-Sonoma ( NYSE:WSM ) with additional flexibility to deploy capital efficiently. The program allows for the repurchase of the company's common stock through various channels, including open market transactions and privately negotiated deals. Management will assess market conditions and other factors to determine the timing and volume of share repurchases, ensuring optimal utilization of available funds.
Long-Term Outlook:
Williams-Sonoma's ( NYSE:WSM ) proactive steps to enhance shareholder returns underscore its confidence in the business's prospects and its ability to generate sustainable growth. By aligning its capital allocation strategy with shareholder interests, the company aims to drive long-term value creation.
Technical Outlook
NYSE:WSM is currently in a bullish trend with the stock up by 17% and a Relative Strength Index (RSI) of 80.92. Further concurring with the bullish Trend, NYSE:WSM is trading above its 200-day Moving Average (MA).
WSM Stock 10/04/21 Analysis 4H ChartNYSE:WSM - Trend Analysis -
📑Value: 10/20
📈Growth: 18/20
💰Profitability 16/20
🚀Momentum: 20/20
💸Earnings: 18/20
🖇️Total Score: 82/100
Data:
Volume 857M
Average Volume (3 months) 1.55M
Previous Close $185.31
Open $183.97
Shares Outstanding 76.19M
Technicals:
( Simple Moving Average )
10D SMA $180.95 (+1.25%)
50D SMA $144.80 (+26.53%)
200D SMA $109.46 (+67.38%)
Market Cap $14.12B
Total Debt $1.53B
Cash $1.20B
Enterprise Value $14.5B
Revenue $6.78B
Gross Profit $2.65B
Net Income $680.71M
EPS Diluted $8.61
Free Cash Flow / Share $14.31