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Williams-Sonoma (NYSE:WSM) Stock Tanks Despite Strong Q3 Results

Williams-Sonoma, Inc. (NYSE:WSM) stock plunged nearly 7% in yesterday’s extended trading hours despite reporting strong year-over-year growth in Q3 figures. Investors were disappointed as the company failed to provide any updates on the outlook for the upcoming years, citing “macro uncertainty” as a key reason.

Nonetheless, management promised to provide guidance for fiscal 2023 and beyond in the next earnings release, possibly based on the expectation of having some clarity about the current economic conditions. The company reiterated its guidance for Fiscal 2022 net revenue growth to be in the mid-to-high single digits.

In terms of Q3 performance, the kitchenware and home furnishings retailer delivered mixed results. Earnings per share (EPS) climbed 12% year-over-year to $3.72 in the quarter but missed the analysts’ expectations by a penny. Meanwhile, revenues of $2.19 billion surpassed estimates of $2.15 billion and rose 7% from the prior-year quarter.

The company said that its quarterly figures benefitted from continued backlog order fulfillment, solid product margins, and expense management efforts.

Is Williams-Sonoma a Buy, Hold or Sell Stock?

Following the earnings release, Zachary Fadem of Wells Fargo cut back on WSM’s price target to $120 from $170 per share, while maintaining a Hold rating on the stock.

The analyst opines that the withdrawal of the company’s $10 billion revenue target for Fiscal 2024 is likely to put pressure on the stock. Further, apprehension regarding the company’s operating picture for the next year might keep investors under wraps.

On TipRanks, Williams-Sonoma has an overall consensus rating of Hold based on four Buys, five Holds, and four Sells ratings assigned in the past three months. Also, the average stock price target of $145.54 implies upside potential of 11.62%.


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