Aditya Sarawgi
2 min read
In This Article:
Valued at $19.4 billion by market cap, San Francisco-based Williams-Sonoma, Inc. (WSM) operates as a multi-channel specialty retailer of premium quality home products. The company offers various cooking, dining, home decor, and related products through its brands like Pottery Barn, West Elm, Rejuvenation, etc.
Companies worth $10 billion or more are generally described as "large-cap stocks." WSM fits right into that category, reflecting its significant presence and influence in the specialty retail and premium home decor space.
WSM stock touched its all-time high of $219.98 on Jan. 30, and is currently trading 27.8% below that peak. Over the past three months alone, the stock has dropped 6.1%, significantly underperforming the SPDR S&P Retail ETF’s (XRT) 8.4% gains during the same time frame.
Williams’ stock has plunged 14.2% on a YTD basis, underperforming XRT’s 3.9% dip. However, the stock has gained 7.9% over the past year, outperforming XRT’s 1.4% uptick over the past 52 weeks.
To confirm WSM’s downturn in 2025, the stock traded below its 50-day moving average between late February to early May. Moreover, the stock has remained below its 200-day moving average since late May.
Williams-Sonoma’s stock prices dropped 4.5% following the release of its lackluster Q1 results on May 22. Driven by a slight improvement in comparable store sales, the company’s net revenues for the quarter increased 4.2% year-over-year to $1.7 billion. While the company’s gross margins were positively impacted by efficiency gains and occupancy leverage, it took a notable hit due to merchandise margins dropping by 220 bps. Its net income for the quarter dropped 11.2% year-over-year to $231.3 million.
Furthermore, the Williams’ operating cash flows (OCF) were notably impacted due to a drop in deferred revenues and changes in inventory levels. Its OCF for the quarter plunged 47.6% year-over-year to $119 million, unsettling investor confidence.
While WSM has underperformed its peer Home Depot, Inc.’s (HD) 7% drop in 2025, it has performed slightly better than HD’s 7% gains over the past 52 weeks.
Among the 18 analysts covering the WSM stock, the consensus rating is a “Moderate Buy.” Its mean price target of $181.47 suggests a 14.2% upside potential from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
