What Happened?
Shares of kitchenware and home goods retailer Williams-Sonoma (NYSE: WSM) fell 5.1% in the afternoon session after the company reported underwhelming first-quarter 2025 results, as it provided full-year guidance which was in line but warned of tariff headwinds and macro uncertainty. In addition, gross margin missed, and store count continued to fall, raising concerns about the health of demand.
On the other hand, WSM beat analysts' revenue and EPS expectations. Still, this was a mixed yet challenging quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Williams-Sonoma? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Williams-Sonoma’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 30.5% on the news that the company reported impressive third-quarter 2024 results. Revenue beat slightly, and gross margin improved relative to the previous year, enabling the company to deliver a solid earnings beat. The rate of growth decline moderated relative to the previous year as the company observed improved sales trends and market-share gains.
Given the improved momentum and optimistic trends, management raised full-year revenue and operating profit guidance. The Board of Directors also approved a new $1 billion stock repurchase program to demonstrate the company's focus on returning value to shareholders. Overall, we think this was a strong quarter.
Williams-Sonoma is down 14.1% since the beginning of the year, and at $161.12 per share, it is trading 26% below its 52-week high of $217.71 from February 2025. Investors who bought $1,000 worth of Williams-Sonoma’s shares 5 years ago would now be looking at an investment worth $4,846.
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