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Williams-Sonoma Inc. WSM reported results for first-quarter fiscal 2025 (ended May 4), with earnings and net revenues beating the Zacks Consensus Estimate. The top line increased on a year-over-year basis. The company saw positive comparable sales, supported by stable profitability.
Following the earnings release, shares of this multi-channel specialty retailer of premium quality home products moved down 5.8% in today’s pre-market trading session.
Going forward, the company remains focused on product development and customer service while navigating ongoing macroeconomic and geopolitical uncertainties.
The company reported earnings of $1.85 per share, which beat the Zacks Consensus Estimate of $1.76 by 5.1%. In the prior-year quarter, it reported earnings per share (EPS) of $1.99.
Net revenues of $1.73 billion also topped the consensus mark of $1.67 billion by 3.7% and grew 4.2% year over year.
Williams-Sonoma, Inc. price-consensus-eps-surprise-chart | Williams-Sonoma, Inc. Quote
In the quarter, comps were up 3.4% against a negative 4.9% in the year-ago period.
Comps at Williams-Sonoma increased 7.3% compared with 0.9% reported in the year-ago quarter. Comps at West Elm gained 0.2% against a 4.1% decline reported in the year-ago quarter. Pottery Barn Kids and Teens comps grew 3.8% compared with 2.8% reported in the year-ago quarter. On the other hand, Pottery Barn comps inched up 2% against a 10.8% decline reported in the year-ago quarter.
The gross margin was 44.3% (down from our projection of 44.5%), which contracted 60 basis points (bps) year over year (excluding a one-time freight adjustment in the first quarter of fiscal 2024). The decrease was due to lower merchandise margins, partially offset by occupancy leverage and supply-chain efficiencies.
Selling, general and administrative expenses were 27.5% of net revenues (below our projection of 28.1%), reflecting an improvement of 130 bps year over year due to lower advertising expense, employment leverage and lower performance-based incentive compensation.
The operating margin expanded 70 bps (excluding a one-time freight adjustment in the first quarter of fiscal 2024) from the year-ago figure to 16.8% for the quarter. Our model predicted an operating margin of 16.4% in the quarter.
As of May 4, 2025, Williams-Sonoma reported cash and cash equivalents of $1.05 billion, down from $1.21 billion at the fiscal 2024-end.
Net cash from operating activities totaled $118.9 million in the first three months of fiscal 2025 compared with $226.8 million a year ago. This allowed the company to return nearly $165 million to its shareholders through $90 million in stock repurchases and $75 million in dividends.
Looking ahead, fiscal 2025 will be a 52-week year compared with 53 weeks in fiscal 2024. WSM projects annual net revenues in the range of -1.5% to +1.5%, with comparable brand revenue growth expected to be flat to +3.0%. Operating margin guidance stands between 17.4% and 17.8%.
Over the long term, the company anticipates mid-to-high single-digit revenue growth and operating margins in the mid-to-high teens.
Williams-Sonoma currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Domino's Pizza, Inc. DPZ reported first-quarter fiscal 2025 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. The company reported adjusted EPS of $4.33, up from $3.58 reported in the year-ago quarter. Revenues of $1.11 billion increased 2.5% on a year-over-year basis.
Domino's reported benefits from the Hungry for MORE strategy during the quarter, registering growth in market share across the U.S. and international segments. DPZ continued to manage controllable factors well despite a tough global environment. The strategy supported an increase in sales, store openings and profits. These factors are important for long-term value creation for franchisees and shareholders.
Brinker International, Inc. EAT reported third-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The company reported adjusted EPS of $2.66, up from $1.24 reported in the year-ago quarter. Revenues of $1.43 billion increased 27.2% on a year-over-year basis.
Brinker’s quarterly performance benefited from strong fundamentals, leading to better guest experience and steady business growth. The ongoing increase in traffic continues to drive the company’s performance.
YUM! Brands, Inc. YUM posted first-quarter 2025 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues missing the same. The company posted adjusted EPS of $1.30, up from $1.15 reported in the year-ago quarter. Revenues of $1.79 billion increased 12% on a year-over-year basis.
The company’s performance reflects solid contributions from the KFC and Taco Bell divisions. On the digital front, the company reported meaningful progress, with digital sales nearing $9 billion and accounting for 55% of total sales. Franchisee feedback on Yum!’s proprietary digital platform, Byte by Yum!, remained positive, reinforcing the brand’s strategic push toward tech-driven growth.
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This article originally published on Zacks Investment Research (zacks.com).
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