Williams-Sonoma Stock Drops as Investors React to Muted Outlook Despite Strong Q4 Results

Williams-Sonoma (WSM, Financials) shares fell 5.75% to $162.40 as of 1:14 p.m. ET on Wednesday, extending earlier losses after the company's fourth-quarter earnings report showed strong revenue growth but a cautious full-year outlook. The stock had dropped as much as 8.9% in premarket trading following the announcement.

Driven by successes in its Williams-Sonoma and West Elm brands, the business announced a 7.9% year-over-year sales rise, hitting $2.46 billion. Comparable sales up 3.1%; West Elm gained 4.2%; Williams-Sonoma climbed 5.7%; Pottery Barn sales fell 0.5%.

Supported by supply chain efficiency and better retail margins, Williams-Sonoma's gross margin grew to 47.3%, 130 basis points over a year earlier. Rising to $530 million, or 21.5% of overall sales, operating income exceeded 20.16% last year. With $1.2 billion in cash at the conclusion of the quarter and $1.4 billion in operational cash flow for the whole year, the firm closed the quarter with

With an operating margin expected of 17.4% to 17.8%, the business predicted full-year sales growth for fiscal 2025 between -1.5% and +1.5%. The middle of this direction surpassed general agreement projections.

Notwithstanding macroeconomic uncertainties, CEO Laura Alber said the business is focused on expansion, customer service, and profitability performance.

Over the previous 52 weeks, Williams-Sonoma shares have moved anywhere from $125.33 to $219.98. The reduced growth projections caused unfavorable reaction from investors, which sent the stock down in Wednesday's session.