SAN FRANCISCO – Today, Williams-Sonoma Inc . (NYSE:WSM) reported its fiscal third quarter results, highlighting a mixed financial performance with earnings that exceeded analyst expectations but revenues that fell short of forecasts.
The San Francisco-based home furnishings retailer announced earnings of $237.3 million, with a profit per share of $3.66, outpacing the projected $3.34 per share estimated by Zacks Investment Research and a consensus of 10 analysts. Despite this achievement, Williams-Sonoma's revenue for the quarter did not meet the anticipated $1.95 billion, instead totaling $1.85 billion.
In a detailed financial breakdown, the company also disclosed:
- A 14.6% drop in comparable brand revenue compared to the same period last year.
- A record operating margin of 17.0%, attributed to reduced shipping and freight costs, a decrease in selling expenses by 11.1% to $507 million, supply chain improvements, and a strategy focused on full-price sales.
- Operating income reached $315 million with net earnings at $237.28 million, leading to a diluted earnings per share (EPS) of $3.66.
- A strong cash position with $699 million on hand and no outstanding borrowings.
- A significant 17.2% cut in merchandise inventories to $1.4 billion.
- An operating cash flow of $290 million for the quarter, which was utilized to support dividends and stock repurchases.
Laura Alber, the CEO of Williams-Sonoma, praised the company's robust performance amid economic headwinds and conveyed a positive outlook for the upcoming holiday season. The company has updated its fiscal 2023 guidance to project net revenue growth between -10% to -12% and an operating margin ranging from 16% to 16.5%. Williams-Sonoma remains committed to its long-term objective of achieving mid-to-high single-digit annual net revenue growth with an operating margin exceeding 15%.
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