Telsey Reiterates Outperform Rating on Williams-Sonoma (WSM)

Telsey analyst Cristina Fernandez reiterated an Outperform rating and $165.00 price target on Williams-Sonoma (NYSE: WSM)

The analyst comments "3Q24 Preview: We expect 3Q24 to show similar trends to 2Q24 and are estimating comparable sales of (3.3%) vs. the FactSet (FS) consensus of (3.5%) and a (14.6%) decline last year. Other home furnishings retailers that have reported 3Q24 saw subdued consumer interest on the home, a negative impact from storms, and a softening in spending leading up to the election. We expect Williams-Sonoma to have seen good reception to seasonal decor, collaborations, baby, teen, and kitchen, partially offset by ongoing declines in furniture. We see Pottery Barn Kids/Teen performing best at 1.0%, followed by Williams-Sonoma at 0%. We expect Pottery Barn (-6%) and West Elm (-4.5%) to be most challenged. We model the operating margin flat YoY at 17.0% vs. FS at 16.8%, with gross margin expansion of ~140 bps to 45.8% vs. FS at 45.9% on supply chain efficiencies offset by SG&A deleverage of ~140 bps to 28.8% vs. FS at 29.1% on higher marketing spend. Our 3Q24 EPS estimate is $1.79 vs. FS at $1.77."

For an analyst ratings summary and ratings history on Williams-Sonoma click here. For more ratings news on Williams-Sonoma click here.

Shares of Williams-Sonoma closed at $130.82 yesterday.

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