Williams-Sonoma, Inc WSM reported a third-quarter FY23 sales decline of 15.5% year-on-year to $1.854 billion, missing the analyst consensus estimate of $1.957 billion.
Comparable brand revenue for the quarter declined 14.6%.
Adjusted EPS of $3.66 beat the analyst consensus estimate of $3.35.
Gross margin for the quarter expanded 290 basis points to 44.4%, while the gross profit fell 9.7% to $822.6 million.
Operating income declined 7.2% to 315 million, with an operating margin of 17%.
The company held $698.8 million in cash and equivalents as of October 29, 2023.
"These results were achieved in an environment filled with on-going consumer hesitancy on high-ticket discretionary furniture spend and elevated levels of promotional activity," said Laura Alber, President and Chief Executive Officer.
Outlook: Williams-Sonoma sees FY23 revenue to decline 10% - 12% (previously a decline of 5% - 10%).
The company noted its lower sales outlook is offset by the expected increased operating margin, producing higher implied EPS guidance.
Over the long term, the company continues to expect mid-to-high single-digit annual net revenue growth with an operating margin above 15%.
Price Action: WSM shares are trading higher by 4.50% at $168.66 on the last check Thursday.
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