Williams Sonoma Announces $1B Share Buyback, Shares Hit Record High

MILAN San Francisco-based home retailer Williams-Sonoma Inc.’s numbers are suffering due to losses led by West Elm, but Wall Street doesn’t seem too worried.

Its shares, which trade under the ticker WSM on the New York Stock Exchange, rose 46.8 percent to a high of $283.87 Wednesday, after the company raised its dividend by 26 percent and announced a new $1 billion share repurchase program, superseding the company’s current stock repurchase authorization.

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Full-year sales and net profit beat company expectations issued in November. For the fiscal year ended Jan. 28, sales fell 9.9 percent to $7.75 billion, beating expectations that revenue would fall between 10 and 12 percent.

Sales at West Elm, which the company is working to turn around, fell to $1.86 billion from $2.28 billion. We are seeing really strong results…with the new product offer that’s core and the new design language that we’ve brought out and the new modern forms,” said Williams-Sonoma president and chief executive officer Laura Alber in response to analyst questions about its performance.

“We outperformed in 2023 despite the slowest housing market in several decades and geopolitical unrest. Although this pressured our top-line trend, we stayed focused on full-price selling, supply chain efficiencies and best-in-class customer service,” Alber said, enthusiastic about recent collaborations with interior expiters like interior designer Sheila Bridges. Williams Sonoma-owned Pottery Barn brand recently collaborated with Aerin Lauder for a Pottery Barn Kids line.

In 2024, the company said will continue to be a year of macro-economic uncertainty. “Lower interest rates could spur the housing market and shift consumer spending to home, but timing is hard to predict. There is also the election and global geopolitical tension,” said Jeff Howie Williams-Sonoma’s executive vice president and chief financial officer during the call.

“The Red Sea disruption is pretty terrible; however, it is not costing us more money. So far it is costing us about 10 days of delivery, give or take,” Alber said.

Next year, the company expects net revenues to be in the range of down 3 percent to up 3 percent and operating margin between 16.5 and 16.8 percent. The company has earmarked $250 million in capital expenditure to invest in long-term growth, 75 percent of which will be dedicated to drive e-commerce leadership and supply chain efficiency. “We expect to continue to return excess cash to our shareholders in the form of increased quarterly dividend payouts and ongoing share repurchases.”

Alber also said that the company is looking for space in new, vibrant centers, where the company would pay less and the financials are strong, as certain leases come up for renewal.