SAN FRANCISCO - Williams-Sonoma Inc . (NYSE: NYSE:WSM) delivered an impressive financial performance in the first quarter, surpassing analyst expectations with an adjusted earnings per share (EPS) of $4.07, significantly higher than the estimated $2.72.
Revenue also exceeded forecasts, coming in at $1.66 billion against the consensus estimate of $1.65 billion. Following the announcement, shares of the home furnishings retailer jumped 7.6%, indicating a strong market response to the company's earnings and future outlook.
In the first quarter, Williams-Sonoma experienced a decline in comparable brand revenue by 4.9% compared to the same period last year. Despite this, the company reported a robust operating margin of 19.5%, which included a beneficial adjustment. Excluding this one-time adjustment, the operating margin stood at 16.6%. The company attributed its profitability to higher merchandise margins, supply chain efficiencies, and a decrease in occupancy costs, which dropped by 3.2% compared to the previous year on a GAAP basis.
Looking ahead, Williams-Sonoma reiterated its fiscal 2024 guidance, expecting annual net revenue growth between -3% to +3%, with comparable sales ranging from -4.5% to +1.5%. Moreover, the company raised its operating margin forecast for the fiscal year to between 17.6% and 18.0%, including the impact of the out-of-period adjustment. Without this adjustment, the anticipated operating margin is between 17.0% and 17.4%.
President and CEO Laura Alber expressed confidence in the company's trajectory, stating, "We are pleased to deliver strong results in the first quarter of 2024, driven by an improving top-line trend and continued strength in our profitability." Alber emphasized the company's focus on returning to growth, elevating customer service, and driving margin improvements.
Williams-Sonoma's financial health remains solid, with a strong liquidity position of $1.3 billion in cash and $227 million in operating cash flow. The company's commitment to shareholder returns was evident through $107 million delivered via dividends and stock repurchases.
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