How Will Williams-Sonoma Offset Tariff Risks?

Telsey Advisory Group analyst Cristina Fernández shared key points from a meeting with Williams-Sonoma, Inc. WSM CFO Jeff Howie and Chief Accounting Officer & Head of IR Jeremy Brooks this week.

The analyst writes that the company emphasized its strengths, including an $8 billion revenue scale, a strong balance sheet with $1.2 billion in cash and no debt, and supply chain expertise while acknowledging potential tariff headwinds announced by the Trump administration.

Read: Mark Cuban Warns Of Price Hikes, Says ‘Buy Consumables Now,’ Before Retailers Blame Tariffs

To neutralize the impact of tariffs, the company plans to negotiate with vendors, adjust pricing, enhance supply chain efficiencies, leverage AI for operations, and cut SG&A costs, adds the analyst.

To tackle tariffs, the analyst writes that the company can lower advertising expenses (historically 6.5%- 7.5% of sales) and improve logistics for large home deliveries, which total 2.2 million annually (7,000 per day).

Fernández notes that despite challenges, Williams-Sonoma’s demand remains stable year-to-date.

The analyst writes Williams-Sonoma is well-positioned to navigate challenges due to its diversified brand portfolio, unique merchandise, supply chain strength, and flexible cost structure.

Overall, the analyst maintained the Outperform rating on the stock with a price forecast of $220.

Price Action: WSM shares are up 3.08% at $143.13 at the last check Friday.

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