Williams-Sonoma, Inc. stock research
FY2024 Q2
Williams-Sonoma (WSM) Gross Margin — Quarter Ended Jul 28, 2024
Revenue less cost of revenue yields gross profit, and gross margin is the ratio of gross profit to revenue. This quarter, revenue was higher than the prior quarter but lower than the same quarter last year, while cost of revenue increased sequentially and decreased year-over-year, resulting in a gross margin that weakened from the prior quarter but improved from a year ago.
Gross margin takeaway
Quarter ended Jul 28, 2024 · FY2024 Q2
Revenue less cost of revenue yields gross profit, and gross margin is the ratio of gross profit to revenue. This quarter, revenue was higher than the prior quarter but lower than the same quarter last year, while cost of revenue increased sequentially and decreased year-over-year, resulting in a gross margin that weakened from the prior quarter but improved from a year ago.
- The filing attributes the revenue decline to customer hesitancy towards furniture purchases, partially offset by strength in emerging brands and children's home furnishings, which likely influenced the gross margin through a shift in sales mix.
- Compared to the immediately preceding quarter, revenue was higher but gross margin weakened as cost of revenue increased more than proportionally. Compared to the same quarter one year earlier, revenue was lower but gross margin improved as cost of revenue decreased more sharply.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.0%
Gross profit
$803.9M
Revenue
$1.8B
Cost of revenue
$984.4M
Quarter-over-quarter change
-2.9 pts
Year-over-year change
+4.3 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 |
|---|---|---|---|---|
| Oct 29, 2023 | $1.9B | $822.4M | $1.0B | 44.4% |
| Jan 28, 2024 | $2.3B | $1.0B | $1.2B | 46.0% |
| Apr 28, 2024 | $1.7B | $795.2M | $865.2M | 47.9% |
| Jul 28, 2024 | $1.8B | $803.9M | $984.4M | 45.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 28, 2024
-2.9 pts
Year-over-year change
Jul 30, 2023
+4.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The filing attributes the revenue decline to customer hesitancy towards furniture purchases, partially offset by strength in emerging brands and children's home furnishings, which likely influenced the gross margin through a shift in sales mix.
Compared to the immediately preceding quarter, revenue was higher but gross margin weakened as cost of revenue increased more than proportionally. Compared to the same quarter one year earlier, revenue was lower but gross margin improved as cost of revenue decreased more sharply.
Monitor the performance of the furniture category and the emerging brands in subsequent quarters, as the filing highlights their contrasting trends.