Williams-Sonoma, Inc.
The San Francisco-based company was able to sustain higher margins and delivered better-than-expected fourth quarter results and guidance for 2024, according to Goldman Sachs.
The Williams-Sonoma Analyst: Kate McShane upgraded the rating from Sell to Neutral, while rating the price target from $154 to $263.
The Williams-Sonoma Thesis: Despite negative comps, Williams-Sonoma generated better margins "by managing promotions and benefiting from freight costs, which offset deleverage," McShane said.
"Although furniture demand is unlikely to improve until housing turnover resumes, WSM expects to sustain its current operating margin even with another year of negative comps in FY24," the analyst wrote.
The company has proved to be "more nimble than we understood with its supply chain," while the "structural changes made to their business (increase in digital, reduction of occupancy, better retail locations, and more targeted promotions) have allowed them to command some of the highest margins now in retail," he added.
WSM Price Action: Shares of Williams-Sonoma had risen by 0.71% to $285.89 at the time of publication on Thursday.
