Analysts See Profit Pressure For Williams-Sonoma In 2025, But Brand Strength Remains Intact

Analysts revised the price forecast for Williams-Sonoma, Inc. WSM following fourth-quarter results reported on Wednesday.

The company reported revenue grrowth of 8% year over year to $2.46 billion, beating the consensus of $2.35 billion.

Adjusted earnings per share of $3.28 came above the analyst consensus of $2.93.

For 2025, Williams-Sonoma net revenue is expected to range from -1.5% to +1.5%, comps from flat to +3.0%, and operating margin between 17.4% and 17.8%, including a 20bps impact from the prior year’s extra week.

Wedbush analyst Seth Basham maintained a Neutral rating and lowered the price forecast from $190 to $170.

The analyst writes that the company’s FY25 operating margin guidance was disappointing due to tariff headwinds.

Basham notes that investors had anticipated tariff pressures, but the biggest disappointment was the extent of the headwind.

Nevertheless, the company has demonstrated strong management of its variable cost structure and has consistently achieved incremental savings in sourcing and supply chain, even after annualizing significant tailwinds, thus reducing margin downside risk, adds the analyst.

Basham expressed his disappointment that the company reiterated its medium-term operating margin guidance (mid-high teens) due to the tariff uncertainty.

Also, Telsey Advisory analyst Cristina Fernandez retained an Outperform rating and cut the price forecast from $230 to $220.

The analyst says that the results showcased the strength of its brands and diverse product offerings, driving a 3.1% comp growth.

This positive momentum appears to continue into the first quarter, with April being a key month due to the Easter calendar shift, adds the analyst.

Fernandez writes that while the 2025 operating margin guidance was slightly below expectations, it accounts for all known tariffs and still reflects strong profitability compared to peers.

Moreover, Morgan Stanley analyst Simeon Gutman maintained Williams-Sonoma with an Equal-Weight rating and cut the price forecast from $195 to $185.

Investors can gain exposure to the stock via Themes US Small Cap Cash Flow Champions ETF SMCF and Invesco S&P MidCap Quality ETF XMHQ.

Price Action: WSM shares are down 0.24% at $165.87 at the last check Thursday.

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