Williams-Sonoma Stock Sinks as Retailer Cuts Full-Year Revenue Outlook

Shares of Williams-Sonoma (WSM) tumbled in intraday trading Thursday as comparable sales fell more than expected across a number of the company's brands, leading the retailer to cut its full-year outlook.

The company behind retail brands including its namesake stores, Pottery Barn and West Elm, reported $225.7 million in net income for the second quarter, better than analysts polled by Visible Alpha had expected. Total revenue of $1.79 billion fell 4% year-over-year and narrowly missed estimates.

FY Revenue Now Projected To Decline

Comparable sales fell more than analysts had expected, down 0.8% at its namesake brand, 7.1% at Pottery Barn, and 4.8% at West Elm.

The struggles of higher-end retailers like Williams-Sonoma has been well-documented as inflation has led many consumers to focus spending on essentials and delay home-improvement projects or other costly updates.

Target (TGT) executives said earlier this week that the retailer has become a destination for low-cost home updates, noting they saw growth in products like candles and throw pillows in the second quarter. TJX Companies (TJX), the parent of retailers including HomeGoods, also reported solid revenue growth this week as consumers hunt for value.

Williams-Sonoma updated its fiscal 2024 outlook Thursday, expecting full-year revenue to fall 4% to 1.5%, compared with previous projections of a 3% drop to a 3% increase. Comparable sales are expected to decline between 5.5% and 3%, compared with a prior range of a 4.5% decline to a 1.5% increase.

Williams-Sonoma shares fell 8.6% as of about 2:30 p.m. ET Thursday to $131.54. Still, they are up 30% year-to-date.