Why Is Williams-Sonoma (WSM) Stock Soaring Today

Adam Hejl /
2023/08/23 12:06 pm EDT

What Happened:

Shares of kitchenware and home goods retailer Williams-Sonoma (NYSE:WSM) jumped 5.54% in the pre-market session after the company reported second quarter results that beat analysts' EPS expectations and raised its operating margin projections for the full year. 

On the other hand, its revenue missed Wall Street's estimates, driven by underperformance at Pottery Barn and West Elm, and it lowered its full-year sales forecast. 

Lastly, management highlighted the challenges encountered during the quarter and the strategies implemented to address them. They commented, "We achieved these results against an increasingly promotional environment and softening industry metrics by focusing on regular price selling, driving improved customer service and controlling costs." 

Overall, the results could've been better, but the market is likely reacting favorably to its better-than-expected profitability.

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What is the market telling us:

Williams-Sonoma's shares are quite volatile and over the last year have had 12 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Williams-Sonoma is up 23% since the beginning of the year, but at $140.65 per share it is still trading 15.3% below its 52-week high of $165.99 from August 2022. Investors who bought $1,000 worth of Williams-Sonoma's shares 5 years ago would now be looking at an investment worth $1,920.

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