Shares of Williams-Sonoma (WSM) tumbled 5.50% in pre-market trading on Wednesday following the release of the company's fourth-quarter earnings report and disappointing revenue outlook for fiscal year 2025.
The home furnishings retailer reported fourth-quarter earnings per share of $3.28, surpassing analysts' expectations. Revenue for the quarter came in at $2.46 billion, also beating the estimated $2.35 billion. Despite the strong Q4 performance, investors seemed more focused on the company's forward-looking statements.
Williams-Sonoma provided a cautious outlook for fiscal year 2025, projecting net revenues in the range of -1.5% to +1.5% compared to the previous year. This conservative guidance appears to have sparked concerns among investors about the company's growth prospects in the near term. Additionally, the company disclosed an out-of-period adjustment of $49 million related to over-recognized freight expenses in 2021, 2022, and 2023, which may have contributed to the negative sentiment. On a more positive note, Williams-Sonoma announced a 16% increase in its quarterly dividend to $0.66 per share, demonstrating confidence in its long-term financial health despite near-term challenges.
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