WSM | Q4 2024

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Overview

• Non-GAAP EPS of $3.28 beats by $0.34.

• Revenue of $2.46B (+7.9% Y/Y) beats by $110M.

Takeaways

Williams-Sonoma (WSM) closed out 2024 with a strong finish, beating expectations across the board.

In the fourth quarter, same-store sales rose 3.1%, and EPS came in at $3.28 while keeping operating margins healthy at 21.5%. For the full year, Williams-Sonoma brought in $7.7 billion in revenue and earned $8.50 per share—up 14% from the year before.

Profit margins hit record highs thanks to lower costs, fewer discounts, and a focus on efficient operations. The company also returned $1.1 billion to shareholders through buybacks and dividends, finished the year with $1.2 billion in cash, and has no debt on its balance sheet—one of my favorite things about the company.

Looking ahead to 2025, Williams-Sonoma expects flat to slightly positive same-store sales and aims to maintain strong profitability. It also announced a 16% increase to its quarterly dividend!

On the call, CEO Laura Alber credited the strong results to a clear strategy, strong execution, and effective cost management—even with continued softness in the housing market. After several quarters of declining sales, the return to growth in Q4 was a big deal, and Williams-Sonoma outperformed the broader home furnishings industry, which shrank by 2%.

Holiday assortments, improved furniture sales, and standout performance across both retail stores and online helped fuel the rebound. Interestingly, stores were a major driver of Q4 growth, thanks to better inventory, fresh new products, and an improved in-person shopping experience.

As we make our way into the future, Williams Sonoma is really leaning into what sets it apart: in-house design, high-quality products, and a wide assortment beyond just furniture. Alber emphasized that while housing activity may remain sluggish, categories like seasonal decor, housewares, and textiles offer plenty of room to grow. Also, new product collaborations with names like Stanley Tucci and LoveShackFancy are helping attract new customers and keep existing ones coming back for more.

Another notable area of the business was the B2B segment, which brought in more than $1 billion last year and saw a 12% sales increase in Q4. The company landed big projects with brands like Royal Caribbean, Ritz-Carlton, and W Hotels.

Smaller brands like Rejuvenation and GreenRow also stood out—Rejuvenation nearly doubled its business since 2020 and continues to grow at a double-digit pace.

Williams-Sonoma is also making big improvements in customer experience. It's investing in new in-store and online design tools, rolling out more personalized emails and homepages, and using AI to help streamline operations and make shopping easier.

In the long run, Williams-Sonoma is sticking to its goal of growing sales by mid-to-high single digits each year while keeping margins strong. With an unbeatable balance sheet, loyal customers, strong (and growing) brands, and clear plans for the future, the company is well-positioned to keep winning—even in a tough retail environment.

My only regret with Williams-Sonoma is that I don’t own more of it.

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