Williams-Sonoma shares fell more than 6% after the homewares retailer issued light guidance, overshadowing an earnings beat for the fourth quarter.
The company guided annual revenue growth in the range of -1.5% to 1.5% and comparable sales growth of flat to 3%, compared to the consensus of 1%.
It also guided an operating margin between 17.4% to 17.8%, missing estimates of 17.9%.
For Q4, earnings per share (EPS) came in at $3.28, ahead of forecasts of $2.91.
Revenue for the quarter was $2.46 billion, ahead of estimates of $2.35 billion.
Comparable sales grew by 3.1%, beating the Street estimates of 1.4%.
Investors overlooking 'strong' Q4
Analysts at Jefferies noted the stock weakness as investors overlooked a “very strong Q4 where Street expectations by approximately 12% from outperformance in comparable sales and margins.”
“We attribute the stock's drop to 2025 guidance, which looks better on the basis of comparable sales, though light on earnings before interest and taxes (EBIT) margins,” they wrote.
Jefferies repeated its ‘Buy’ rating on Williams-Sonoma and awarded it a $226 price target, implying upside of 31% at the time of writing.
Williams-Sonoma shares fell 6.6% to about $161 in the early afternoon on Wednesday.