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Q4 Earnings Recap: Williams-Sonoma (NYSE:WSM) Tops Home Furniture Retailer Stocks

StockStory - Thu Apr 4, 3:49AM CDT

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Earnings results often give us a good indication of what direction a company will take in the months ahead. With Q4 now behind us, let’s have a look at Williams-Sonoma (NYSE:WSM) and its peers.

Furniture retailers understand that ‘home is where the heart is’ but that no home is complete without that comfy sofa to kick back on or a dreamy bed to rest in. These stores focus on providing not only what is practically needed in a house but also aesthetics, style, and charm in the form of tables, lamps, and mirrors. Decades ago, it was thought that furniture would resist e-commerce because of the logistical challenges of shipping large furniture, but now you can buy a mattress online and get it in a box a few days later; so just like other retailers, furniture stores need to adapt to new realities and consumer behaviors.

The 4 home furniture retailer stocks we track reported a mixed Q4; on average, revenues were in line with analyst consensus estimates while next quarter's revenue guidance was 9.4% below consensus. Stocks have faced challenges as investors prioritize near-term cash flows, but home furniture retailer stocks held their ground better than others, with the share prices up 19.7% on average since the previous earnings results.

Best Q4: Williams-Sonoma (NYSE:WSM)

Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE:WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Williams-Sonoma reported revenues of $2.28 billion, down 7.1% year on year, topping analyst expectations by 2.4%. It was a very strong quarter for the company, with a solid beat of analysts' revenue and EPS estimates. In addition, management increased the company's quarterly dividend by 26% and share repurchase capacity to $1 billion.

“We are pleased with our strong finish to 2023. We delivered an annual operating margin of 16.4% with full-year earnings per share of $14.85, beating our 2023 comp guidance of -10% to -12% and hitting our operating margin range of 16% to 16.5%,” said Laura Alber, President and Chief Executive Officer.

Williams-Sonoma Total Revenue

The stock is up 28.5% since the results and currently trades at $309.88.

Is now the time to buy Williams-Sonoma? Access our full analysis of the earnings results here, it's free.

Sleep Number (NASDAQ:SNBR)

Known for mattresses that can be adjusted with regards to firmness, Sleep Number (NASDAQ:SNBR) manufactures and sells its own brand of bedding products such as mattresses, bed frames, and pillows.

Sleep Number reported revenues of $429.5 million, down 13.7% year on year, outperforming analyst expectations by 2.1%. It was a very strong quarter for the company, with an impressive beat of analysts' revenue estimates. Although Sleep Number missed analysts' EPS estimates from a GAAP perspective, its adjusted EPS beat by a wide margin (loss of $0.58 per share vs estimates of a $0.88 per share loss).

Sleep Number Total Revenue

Sleep Number had the slowest revenue growth among its peers. The stock is up 28.1% since the results and currently trades at $14.16.

Is now the time to buy Sleep Number? Access our full analysis of the earnings results here, it's free.

RH (NYSE:RH)

Formerly known as Restoration Hardware, RH (NYSE:RH) is a specialty retailer that exclusively sells its own brand of of high-end furniture and home decor.

RH reported revenues of $738.3 million, down 4.4% year on year, falling short of analyst expectations by 5.1%. It was a weak quarter for the company, with a miss of analysts' earnings and revenue estimates.

RH had the weakest performance against analyst estimates in the group. The stock is up 4.7% since the results and currently trades at $311.

Read our full analysis of RH's results here.

Arhaus (NASDAQ:ARHS)

With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.

Arhaus reported revenues of $344 million, down 3.5% year on year, surpassing analyst expectations by 2.5%. It was a strong quarter for the company, with an impressive beat of analysts' revenue, operating income, and earnings estimates.

Arhaus achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 25% since the results and currently trades at $16.

Read our full, actionable report on Arhaus here, it's free.

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