Stock Analysis on Net
Stock Analysis on Net

Williams-Sonoma Inc. (NYSE:WSM)

This company has been moved to the archive! The financial data has not been updated since May 24, 2024.

Common-Size Income Statement

Williams-Sonoma Inc., common-size consolidated income statement

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12 months ended: Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Feb 2, 2020 Feb 3, 2019
Net revenues 100.00 100.00 100.00 100.00 100.00 100.00
Cost of goods sold -57.38 -57.60 -55.95 -61.14 -63.73 -62.96
Gross profit 42.62% 42.40% 44.05% 38.86% 36.27% 37.04%
Selling, general and administrative expenses -26.57 -25.12 -26.42 -25.44 -28.37 -29.36
Operating income 16.05% 17.27% 17.62% 13.43% 7.90% 7.69%
Interest income (expense), net 0.38 0.03 -0.02 -0.24 -0.15 -0.12
Earnings before income taxes 16.43% 17.30% 17.60% 13.19% 7.75% 7.57%
Income taxes -4.18 -4.30 -3.94 -3.15 -1.71 -1.68
Net earnings 12.25% 13.00% 13.66% 10.04% 6.04% 5.88%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

A significant expansion in overall profitability is observed between February 2019 and January 2024. The company transitioned from a net earnings margin of 5.88% to a peak of 13.66% in 2022, before stabilizing at 12.25% by early 2024. This growth was primarily driven by a substantial improvement in gross margins and disciplined control of operating expenses.

Gross Margin Analysis
Gross profit as a percentage of net revenues increased from 37.04% in 2019 to 42.62% in 2024. This upward trend is attributed to a reduction in the cost of goods sold, which declined from a peak of 63.73% in 2020 to 57.38% in 2024. The most significant margin expansion occurred between 2021 and 2022, where gross profit jumped from 38.86% to 44.05%, suggesting improved pricing power or enhanced supply chain efficiencies.
Operating Efficiency
Selling, general, and administrative expenses showed a general downward trend in relation to revenue, decreasing from 29.36% in 2019 to 26.57% in 2024. This reduction in overhead, combined with the expansion of gross margins, led to a dramatic increase in operating income. Operating margins rose from 7.69% in 2019 to a peak of 17.62% in 2022, remaining strong at 16.05% in 2024.
Net Profitability and Financial Costs
Net earnings margins more than doubled over the period, moving from 5.88% in 2019 to 12.25% in 2024. A notable shift occurred in interest income and expenses; the company moved from a net interest expense position of -0.24% in 2021 to a net interest income position of 0.38% by 2024. While income taxes as a percentage of revenue increased from 1.68% in 2019 to 4.18% in 2024, this was a natural consequence of the significantly higher pre-tax earnings.

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