Williams-Sonoma posted first-quarter results that beat Wall Street estimates, stating the retailer has initiated responses to the weak housing market, including a greater emphasis on housewares, while amending sourcing and product development in ways it expects will minimize tariff-related price increases.
Net earnings were $231.26 million, or $1.85 per diluted share, versus $260.42 million, or $1.99 per diluted share, in the year-previous quarter, the company noted.
A Yahoo Finance-published analyst consensus estimate called for earnings per diluted share of $1.76 and revenue of $1.67 billion
Comparable sales gained 3.4% with, by banner, Pottery Barn up 2%, West Elm up 0.2%, Williams-Sonoma up 7.3% and Pottery Barn Kids and Teen up 3.8%.
Net revenue was $1.73 billion versus $1.66 billion in the year-earlier quarter, the company reported. Operating income was $290.7 million versus $317.1 million in the year-prior period.
Before releasing first-quarter results, Williams-Sonoma announced it is launching its Pottery Barn banner in the United Kingdom as an online store.
Williams-Sonoma stated the company is maintaining its fiscal 2025 and long-term guidance while absorbing incremental costs in the existing tariff environment. The costs assumed include the additional 30% China tariff and the global reciprocal tariff of 10%, along with the 25% duties on Mexico and Canada and the 25% tariff on steel and aluminum. The company isn’t assuming any other tariffs, but said it might revisit guidance if material changes to tariffs occur.
In a conference call, Laura Alber, the company’s president and CEO, said Williams-Sonoma’s tariff mitigation plan includes obtaining cost concessions from the company’s vendors, including reductions on current products and those the retailer is bringing in and developing for the future. The plan also includes resourcing goods to lower-tariff countries; identifying further supply chain efficiencies in the Williams-Sonoma network;, reducing SG&A expense through cost control and financial discipline; expanding the company’s made-in-the-USA assortment production and partnerships; and taking select price increases on products to offer strong value with a focus on maintaining competitive pricing.
In looking at other developments, Alber said Williams-Sonoma is taking into account the soft the housing market and its affect on the furniture sector, putting more emphasis on a broad and inspirational non-furniture assortment that includes seasonal and decorative accessories, textiles and housewares. In the Williams Sonoma operation, cookware, entertaining and housewares segments outperformed the company’s overall sales growth in the first quarter, Alber said, adding Pottery Barn continues seeing strength in seasonal offerings.
In announcing the financial results, Alber said, “We are proud to deliver strong results in the first quarter of 2025, driven by a positive top-line comp and continued strength in our profitability. In Q1, our comp came in above expectations at plus 3.4%. And, we exceeded profitability estimates with an operating margin of 16.8% and earnings per share of $1.85, with earnings growth of 8.8%. In the quarter, we saw an acceleration of the positive comp trend coming out of Q4, with all brands running positive comps. There is no doubt that existing macroeconomic and geopolitical uncertainties are a focal point for the market. But volatility is not new in our industry, and we are confident in our ability to adapt and navigate whatever lies ahead. Therefore, we are optimistic about 2025 as we continue our focus on product innovation and customer service.”
