Williams-Sonoma, Inc. stock research
FY2023 Q2
Williams-Sonoma (WSM) Gross Margin — Quarter Ended Jul 30, 2023
Revenue decreased compared to both the prior quarter and the same quarter last year, while gross profit followed a similar pattern. Gross margin improved from the prior quarter but weakened relative to the year-ago period, reflecting a mixed relationship among revenue, cost of revenue, and gross profit.
Gross margin takeaway
Quarter ended Jul 30, 2023 · FY2023 Q2
Revenue decreased compared to both the prior quarter and the same quarter last year, while gross profit followed a similar pattern. Gross margin improved from the prior quarter but weakened relative to the year-ago period, reflecting a mixed relationship among revenue, cost of revenue, and gross profit.
- The strongest observable margin driver is the change in cost of revenue relative to revenue. In the current quarter, cost of revenue declined less proportionally than revenue compared to the prior quarter, yet gross margin still improved, indicating a favorable shift in the cost structure.
- Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were lower, and gross margin weakened.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
40.7%
Gross profit
$757.6M
Revenue
$1.9B
Cost of revenue
$1.1B
Quarter-over-quarter change
+2.2 pts
Year-over-year change
-2.8 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 29, 2023 | $2.5B | $1.0B | $1.4B | 41.2% |
| Apr 30, 2023 | $1.8B | $675.1M | $1.1B | 38.5% |
| Jul 30, 2023 | $1.9B | $757.6M | $1.1B | 40.7% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 30, 2023
+2.2 pts
Year-over-year change
Jul 31, 2022
-2.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in cost of revenue relative to revenue. In the current quarter, cost of revenue declined less proportionally than revenue compared to the prior quarter, yet gross margin still improved, indicating a favorable shift in the cost structure.
Compared to the immediately preceding quarter, revenue and gross profit were higher, and gross margin improved. Compared to the same quarter one year earlier, revenue and gross profit were lower, and gross margin weakened.
Monitor the trajectory of cost of revenue relative to revenue in upcoming quarters to assess whether the current margin improvement can be sustained.