Williams-Sonoma, Inc. (NYSE:WSM) reported better-than-expected second-quarter earnings but fell short on revenue and cut its full-year sales outlook, causing its shares to drop by more than 8% intra-day today.
For the quarter, the company posted earnings per share of $1.74, beating analyst projections of $1.61. However, revenue came in at $1.79 billion, below the $1.81 billion expected by analysts and reflecting a 3.3% year-over-year decline on a comparable brand basis.
Despite missing revenue expectations, the company improved its profitability, with an operating margin of 16.2%, an increase of 160 basis points from the same period last year. This boost was driven by higher merchandise margins and improved supply chain efficiencies.
Looking ahead, Williams-Sonoma revised its fiscal 2024 guidance, now forecasting annual net revenue growth between -4.0% and -1.5%, down from its previous range of -3% to +3%. However, the company raised its operating margin outlook to 17.4%-17.8%.