Williams-Sonoma Shares Gain After Q1 Results, Reiterates FY23 Outlook

Williams-Sonoma, Inc WSM reported a first-quarter FY23 revenue decline of 7.2% year-over-year to $1.76 billion, missing the consensus of $1.80 billion.
Adjusted EPS was $2.64, down from $3.50 in 1Q22, above the consensus of $2.37.
WSM clocked a comparable brand revenue decline of 6% with a 2-year comp growth of 3.5% and a 4-year comp growth of 46.5%.
Comparable brand revenue: Pottery Barn declined (0.4)%, West Elm (15.8)%, Williams Sonoma down at (4.4)%, and Pottery Barn Kids and Teen (3.3)%.
The adjusted gross margin was 38.6%, down by 523 bps, driven by higher inbound and outbound shipping and freight costs.
Occupancy costs increased 8.6% Y/Y to $202 million non-GAAP.
Also Read: This Analyst Lowers Williams-Sonoma's Estimates Ahead Of Q1 Earnings: Read Why
Adjusted operating margin contracted 425 bps to 12.9% and an operating margin of 11.4% GAAP.
The company returned $358 million to shareholders through stock repurchases of $300 million and dividends of $58 million.
The company held cash and equivalents of $297 million in cash and over $342.53 million in operating cash flow for the quarter.
FY23 Outlook, reiterated: Williams-Sonoma expects annual net revenue growth of -3% to +3% with an operating margin of 14% - 15%.
The company expects mid-to-high single-digit annual net revenue growth in the long term, with an operating margin above 15%.
Price Action: WSM shares are trading higher by 3.79% at $116.42 on the last check Tuesday.

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