Williams-Sonoma (WSM) had strong fiscal Q4 results, but its operating margin outlook was "disappointing" because of tariff headwinds, Wedbush said in a note Thursday.
The company's fiscal Q4 revenue was better than expected as it recognized improving furniture trends, and its gross margins of 47.3% improved 130 basis points year over year, Wedbush analysts said.
The company's operating margin guidance came in lower than expected at 17.4% to 17.8%, compared with the consensus of 18.1%, and reflected the higher costs from all currently announced tariffs.
The analysts noted that although Williams-Sonoma acknowledged that its fiscal Q1 was not trending as strongly as the previous quarter, the company did not copy other retailers in announcing a broad-based slowdown for the period.
Wedbush lowered its target price for the company to $170 from $190 and reiterated the rating at neutral.
Price: 166.00, Change: -0.28, Percent Change: -0.17
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.