Williams-Sonoma (WSM) Tops Q2 EPS by 13c, Offers Outlook
Williams-Sonoma (NYSE: WSM) reported Q2 EPS of $1.74, $0.13 better than the analyst estimate of $1.61. Revenue for the quarter came in at $1.79 billion versus the consensus estimate of $1.81 billion.
OUTLOOK
- We are revising our fiscal 2024 guidance to reflect lower net revenue trends and higher operating margin expectations. The net effect of these changes holds earnings materially in line with our prior implied EPS guidance.
- In fiscal 2024, we now expect annual net revenue growth in the range of -4.0% to -1.5% with comps in the range of -5.5% to -3.0% in fiscal 2024.
- We are raising our guidance on our operating margin for fiscal 2024. We now expect an operating margin between 18.0% to 18.4%, including the impact of the first quarter out-of-period adjustment of 60bps. Without this adjustment, we expect an operating margin between 17.4% to 17.8% in fiscal 2024.
- For fiscal 2024, we expect annual interest income to be approximately $45 million and our annual effective tax rate to be approximately 25.5%.
- Fiscal 2024 is a 53-week year. Our financial statements will be prepared on a 53-week basis in fiscal 2024 and a 52-week basis in fiscal 2023. However, we will report comps on a 53-week versus 53-week comparable basis. All other year-over-year comparisons will be 53-weeks in fiscal 2024 versus 52-weeks in fiscal 2023. We expect the additional week in fiscal 2024 to contribute 150bps to net revenue growth and 10bps to operating margin, both of which are reflected in our guidance.
- Over the long-term, we continue to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens.
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