Fuel Costs Squeeze Williams-Sonoma Margins Despite Q2 Beat
WSM sits 44% above its 52-week low of $165.51.
Summary
Williams-Sonoma's Q2 beat on revenue and EPS, but management flagged fuel costs as a growing margin headwind. CFO Jeff Howie said fuel expenses will pressure gross margin through the year, and adjusted gross margins were lower in Q2 with further declines expected in H2. The company absorbed fuel costs in the first two quarters, making margin expansion difficult. Shares initially fell 6% before recovering to flat. This follows the earlier Q2 report that highlighted a 6.2% comp increase and raised guidance; the new detail is the explicit margin squeeze from fuel, which could temper investor enthusiasm despite the top-line strength.
At the time of this announcement, WSM was trading at $239.00 on NYSE in the Trade & Services sector, with a market capitalization of approximately $27.6B. The 52-week trading range was $165.51 to $254.89. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.