Why Williams-Sonoma Stock Jumped Today
Sales and profits may be falling for home goods retailer Williams-Sonoma (NYSE: WSM), but its profit margins are stronger than what anyone on Wall Street expected. These revelations came before the bell Wednesday morning when the company released the results for its fiscal 2023 second quarter, and led to traders bidding the stock up by 12.8% as of 1 p.m. ET.
In the quarter, which ended July 30, net revenues were down by almost 13% year over year to less than $1.9 billion. And Williams-Sonoma's operating income fell by almost 26% to about $275 million as its operating margin contracted from 17.1% in the prior-year quarter to 14.6% this time. But even though the numbers are down, its margin impressed the market.
Management has said it can keep Williams-Sonoma's operating margins above 15% over the long term, which is quite the promise. Over the last decade, the company's margins were usually below 10%, only spiking above 15% during the pandemic era. For what it's worth, that margin spike was common among home goods retailers during the pandemic, which suggests that Williams-Sonoma wasn't doing anything special.
Source Fool.com
