Williams-Sonoma (NYSE: WSM) reported Q3 EPS of $1.96, $0.09 better than the analyst estimate of $1.87. Revenue for the quarter came in at $1.88 billion versus the consensus estimate of $1.86 billion.

OUTLOOK

We are reiterating our fiscal 2025 net revenue guidance. We expect annual net revenues in the range of +0.5% to +3.5% inclusive of the impact from the 53rd week in fiscal 2024, with comps in the range of +2.0% to +5.0%.

We are raising our guidance on operating margin for fiscal 2025. We now expect an operating margin between 17.8% to 18.1% (with the 53rd week contributing 20bps in fiscal 2024).

Our updated guidance includes (i) the new Section 232 tariffs on furniture, (ii) the revised additional tariffs on China of 20%, (iii) the tariffs on India of 50%, (iv) the tariffs on Vietnam of 20%, (v) average tariffs on the rest of the world of 18%, (vi) the steel and aluminum tariff of 50% and (vii) the copper tariff of 50%.

For fiscal 2025, we expect annual interest income to be approximately $35 million and our effective tax rate to be approximately 26.0%.

Fiscal 2025 is a 52-week year. Our financial statements will be prepared on a 52-week basis in fiscal 2025 versus 53-week basis in fiscal 2024. However, we will report comps on a 52-week versus 52-week comparable basis. All other year-over-year comparisons will be 52-weeks in fiscal 2025 versus 53-weeks in fiscal 2024.

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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