Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $21.37B
• Dividend Yield: 1.36%
• Average Volume (3M): 2.05M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 1.44
• Revenue Growth: -0.50%
• EPS Growth: 24.11%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Specialty Retail
• EPS (TTM): 3.28
• Shares Outstanding: 122,939,910
• 10 Day Avg. Volume: 1,443,669
• 30 Day Avg. Volume: 2,050,995
• PEG Ratio: 2.83
• Price to Book (P/B): 9.22
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.31
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 5.46
• Enterprise Value/Ebitda: 3.03
• 1Y Price Target: $178.50
• Price Target Upside: 2.68% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 18

Williams-Sonoma demonstrates strong financial health, efficient operations, and strategic growth plans. While valuation and technicals indicate moderate conditions, the company's robust earnings performance and strategic initiatives provide a favorable outlook, warranting a solid stock score.

Positive Factors

Earnings

WSM reported 4Q24 EPS of $3.28, above consensus estimates of $2.94.

Operational Efficiency

Operating margins came in above expectations, driven by merchandise margins, supply chain efficiencies, and occupancy leverage.

Sales Performance

The company’s sales of $2,462 million exceeded consensus expectations of $2,355 million.

Negative Factors

Demand Uncertainty

Guidance for '25e strikes a cautious tone, suggesting limited visibility into demand trends YTD.

Guidance

FY25 revenue growth guidance is in the range of -1.5% to +1.5%, with the midpoint below consensus expectations.

Market Sentiment

The stock is currently down approximately 11% in the pre-market, likely due to the lower than consensus operating margin guidance for FY25.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; and women's and men's accessories, travel, entertaining and bar, home décor, and seasonal items under the Mark and Graham brand, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. It operates 544 stores comprising 502 stores in 41states, Washington, D.C., and Puerto Rico; 20 stores in Canada; 19 stores in Australia; 3 stores in the United Kingdom; and 139 franchised stores, as well as e-commerce websites in various countries in the Middle East, the Philippines, Mexico, South Korea, and India. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.

How the Company Makes Money

Williams-Sonoma, Inc. generates revenue primarily through the sale of its diverse range of home products across its multiple subsidiary brands. The company operates both brick-and-mortar retail locations and a robust e-commerce platform, which together form the backbone of its revenue model. Key revenue streams include direct-to-consumer sales through its online platforms and physical stores, as well as catalog sales. The company leverages its strong brand portfolio to target different segments of the home goods market, from affordable to luxury offerings. Additionally, Williams-Sonoma benefits from strategic partnerships and collaborations that enhance its product offerings and expand its market reach. Its in-house design team and global supply chain operations also contribute significantly to maintaining competitive pricing and product availability, bolstering its overall earnings.

Williams-Sonoma Financial Statement Overview

Summary

Williams-Sonoma presents a strong financial performance with high profitability, efficient operations, and effective capital management. However, revenue fluctuations and increased debt highlight areas for improvement.

Income Statement

Williams-Sonoma exhibits solid profitability with a consistent gross profit margin averaging around 46% over recent years. Net profit margin has improved, reaching 14.6% in the latest year, indicative of strong cost management. However, revenue has seen fluctuations, with a decline of 0.5% from the previous year, suggesting potential challenges in sustaining growth. EBIT and EBITDA margins remain robust at 18.5% and 21.5% respectively, demonstrating efficient operations.

Balance Sheet

The company's balance sheet is strong with a debt-to-equity ratio of 0.63, indicating moderate leverage. Return on equity stands at an impressive 52.5%, showcasing effective utilization of shareholder capital. The equity ratio is healthy at 40.4%, reflecting a balanced capital structure. However, slight increases in total debt over time could pose a risk if not managed carefully.

Cash Flow

Williams-Sonoma maintains a robust cash flow position with steady operating cash flow exceeding net income, evidenced by a high operating cash flow to net income ratio of 1.21. Free cash flow has grown consistently, although a 23.7% decline from the previous year suggests variability. The free cash flow to net income ratio is strong at 1.01, indicating good cash generation relative to income.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
7.71B	7.75B	8.67B	8.25B	6.78B
	Gross Profit
3.58B	3.30B	3.68B	3.63B	2.64B
	EBIT
1.43B	1.24B	1.50B	1.45B	910.70M
	EBITDA
1.66B	1.49B	1.50B	1.65B	1.13B
	Net Income Common Stockholders
1.13B	949.76M	1.13B	1.13B	680.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.21B	1.26B	367.34M	850.34M	1.20B
	Total Assets
5.30B	5.27B	4.66B	4.63B	4.66B
	Total Debt
1.35B	1.39B	1.44B	1.28B	1.53B
	Net Debt
134.34M	128.61M	1.08B	433.91M	333.82M
	Total Liabilities
3.16B	3.15B	2.96B	2.96B	3.01B
	Stockholders Equity
2.14B	2.13B	1.70B	1.66B	1.65B
Cash Flow		Free Cash Flow
1.14B	1.49B	698.71M	1.14B	1.11B
	Operating Cash Flow
1.36B	1.68B	1.05B	1.37B	1.27B
	Investing Cash Flow
-221.21M	-188.26M	-353.95M	-226.25M	-168.88M
	Financing Cash Flow
-1.18B	-598.31M	-1.18B	-1.49B	-343.02M

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 173.84
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Positive. The current price of 173.84 is above the 20-day moving average (MA) of 158.10, above the 50-day MA of 158.65, and above the 200-day MA of 163.21, indicating a bullish trend. The MACD of 4.59 indicates Negative momentum. The RSI at 64.56 is Neutral, neither overbought nor oversold. The STOCH value of 70.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DKS	78 Outperform	$14.73B	13.10	40.08%	2.45%	3.53%	13.86%
DPZ	77 Outperform	$16.95B	28.38	-14.74%	1.27%	4.28%	13.76%
WSM	76 Outperform	$21.37B	19.78	53.91%	1.36%	-0.50%	24.11%
BBY	69 Neutral	$15.62B	17.24	31.63%	5.11%	-4.43%	-24.58%
DG	66 Neutral	$20.58B	18.29	15.89%	2.52%	4.96%	-32.41%
Sector *	61 Neutral	$6.98B	11.35	2.88%	3.90%	2.65%	-21.84%
DLTR	61 Neutral	$18.18B	―	18.88%	―	-9.88%	-205.57%