This Analyst Lowers Williams-Sonoma's Estimates Ahead Of Q1 Earnings: Read Why - Williams-Sonoma (NYSE:WSM)

Telsey Advisory Group analyst Cristina Fernández reiterated an Outperform rating on the shares of Williams-Sonoma, Inc. WSM, lowering the price target to $135 from $140.
The company is scheduled to report the first quarter of FY23 on May 23, before the opening bell.
The analyst expects the results to be affected by subdued demand in 1Q23, with consumers holding back on spending given an uncertain economy and high-interest rate environment.
The analyst cautioned that Williams-Sonoma has less visibility to the top line, with backlogs near normalized levels. However, the analyst added the company had demonstrated an ability to manage costs to the level of demand.
Accordingly, the analyst lowered 1Q23 EPS forecast to $2.40 vs. $2.48 previously.
In Q1, the gross margin will be pressured by 450 bps to 39.3% due to higher freight costs, occupancy deleverage, and clearance of seasonal and slow-moving items.
For FY23, the analyst lowered EPS to $13.20 from $13.60. The analyst sees a sales decline in 2023 of ~4% vs. ~3% previously, below the company's 2023 sales growth guidance of (3%) to 3%.
In 2H23, the company can grab share in categories where it overlaps with Bed Bath & Beyond Inc. BBBYQ, like back-to-school, small appliances, and baby.
Price Action: WSM shares are trading higher by 0.39% to $115.32 on the last check Thursday.