Williams-Sonoma, Inc. stock research
FY2024 Q3
Williams-Sonoma (WSM) Gross Margin — Quarter Ended Oct 27, 2024
Revenue was slightly lower than the prior quarter and the same quarter last year, while gross profit improved relative to the prior quarter but declined from a year ago. Cost of revenue decreased compared to both periods, resulting in a gross margin that strengthened sequentially and improved year over year.
Gross margin takeaway
Quarter ended Oct 27, 2024 · FY2024 Q3
Revenue was slightly lower than the prior quarter and the same quarter last year, while gross profit improved relative to the prior quarter but declined from a year ago. Cost of revenue decreased compared to both periods, resulting in a gross margin that strengthened sequentially and improved year over year.
- The gross margin improved both sequentially and year over year, driven by a reduction in cost of revenue that outpaced the decline in revenue. The strongest observable driver is the lower cost of revenue relative to revenue, which directly expanded gross profit as a share of revenue.
- Compared to the immediately preceding quarter, revenue was slightly lower, gross profit was higher, and gross margin improved. Compared to the same quarter one year earlier, revenue was lower, gross profit was lower, but gross margin was higher due to a proportionally larger decline in cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
45.4%
Gross profit
$817.6M
Revenue
$1.8B
Cost of revenue
$983.1M
Quarter-over-quarter change
+0.4 pts
Year-over-year change
+1.0 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 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% |
| Oct 27, 2024 | $1.8B | $817.6M | $983.1M | 45.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 28, 2024
+0.4 pts
Year-over-year change
Oct 29, 2023
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved both sequentially and year over year, driven by a reduction in cost of revenue that outpaced the decline in revenue. The strongest observable driver is the lower cost of revenue relative to revenue, which directly expanded gross profit as a share of revenue.
Compared to the immediately preceding quarter, revenue was slightly lower, gross profit was higher, and gross margin improved. Compared to the same quarter one year earlier, revenue was lower, gross profit was lower, but gross margin was higher due to a proportionally larger decline in cost of revenue.
Monitor the trajectory of cost of revenue relative to revenue, as its decline was the primary factor behind the gross margin improvement.