Williams-Sonoma Stock Tumbles as Q1 Margins Undershoot Estimates

Shares of Williams-Sonoma Inc. (WSM) tumbled 5% in intraday trading Thursday, as the retailer posted better-than-expected quarterly earnings and revenue but missed analysts’ estimates on its gross margins.

The company behind retail brands including Pottery Barn, West Elm, and its namesake stores, reported earnings per share (EPS) of $1.85, better than the $1.73 analysts polled by Visible Alpha had expected. Total revenue of $1.73 billion was also above estimates of $1.66 billion.

Williams-Sonoma reiterated its fiscal 2025 outlook, “even with absorbing incremental costs from the existing tariff environment,” it said. The company sees full-year revenue ranging from down 1.5% to up 1.5%, with comparable sales expected to be flat to up 3%.

Citigroup analysts reiterated their neutral call on the stock and $155 price target, but noted that the company’s gross margins were below estimates and “saw outsized merchandising margin pressure.” Williams-Sonoma said its first-quarter gross margins were down by 60 basis points.

“We’re not surprised to see some share weakness in light of the margin miss,” the Citi analysts said, adding that “WSM shares have rallied considerably since the S&P 500 low in early April.”

The company expressed confidence in meeting future challenges. “There is no doubt that existing macroeconomic and geopolitical uncertainties are a focal point for the market,” CEO Laura Alber said. “But volatility is not new in our industry, and we are confident in our ability to adapt and navigate whatever lies ahead.”

William-Sonoma shares have lost nearly 15% of their value so far this year.