Williams-Sonoma Inc. (NYSE:WSM)

Gross Profit Margin

The gross profit margin exhibited a generally upward trend from 37.04% in early 2019, reaching a peak of 44.05% in early 2022. Following this peak, it experienced a slight decrease but maintained a relatively high level around 42.4% to 42.62% through early 2023 and 2024. This suggests improved efficiency in cost management relative to revenue over most of the period, with a slight softening in the most recent years.

Operating Profit Margin

Operating profit margin showed a consistent increase from 7.69% in early 2019 to a high of 17.62% in early 2022. However, a gradual decline followed, reducing the margin to 16.05% by early 2024. The increase indicates enhanced operational efficiency and possibly better control over operating expenses up to 2022, while the subsequent decrease may reflect rising costs or margin pressures in recent times.

Net Profit Margin

Net profit margin also rose substantially from 5.88% in 2019 to 13.66% in 2022, signaling stronger bottom-line profitability over this period. After 2022, a moderate contraction occurred, with margins declining to 12.25% by early 2024. This pattern aligns with the operating margin trend and suggests stable but slightly pressured net income generation in the latest years.

Return on Equity (ROE)

Return on equity experienced significant growth, starting at 28.87% in 2019 and sharply increasing to 67.68% in 2022. This very high return was somewhat reduced thereafter but still remained strong at 44.63% in 2024. This indicates highly effective utilization of shareholder equity up to 2022, followed by a normalization while continuing to deliver robust returns.

Return on Assets (ROA)

Return on assets demonstrated notable improvement from 11.86% in 2019 to 24.35% in 2022. A decline followed, with ROA decreasing to 18.01% in 2024, although this level remains relatively strong compared to earlier years. The trend suggests enhanced asset efficiency in this timeframe, with somewhat diminished but still resilient performance more recently.

Net Revenues

Net revenues exhibited a consistent upward trajectory from 2019 to 2023, increasing from approximately $5.67 billion to around $8.67 billion. This represents a growth of approximately 53% over the five-year span. However, in the most recent year ending January 28, 2024, net revenues declined to about $7.75 billion, indicating a contraction of roughly 10.7% compared to the previous year.

Gross Profit

Gross profit followed a similar pattern to net revenues. It increased steadily from approximately $2.10 billion in 2019 to a peak of about $3.68 billion in 2023, marking a substantial increase of approximately 75%. The gross profit in 2024 declined to approximately $3.30 billion, representing a decrease of about 10.3% relative to the prior year.

Gross Profit Margin

The gross profit margin exhibited an improving trend over the examined period. Starting at 37.04% in 2019, it experienced a slight dip in 2020 to 36.27%, followed by a consistent increase to 44.05% in 2022. A marginal decrease was observed in 2023, with the margin at 42.4%, before a slight recovery to 42.62% in 2024. Overall, the margin improved by approximately 5.6 percentage points from 2019 to 2024, indicating enhanced profitability on sales despite the decline in absolute revenue and gross profit in the last year.

Overall Trend Analysis

The data suggest a period of sustained growth in both revenues and gross profit from 2019 through 2023, reflecting effective sales expansion and improved cost management as evidenced by rising gross profit margins. The contraction in 2024 points to potential challenges such as decreased demand, increased competition, or other market factors. However, the relatively stable gross profit margin in 2024 suggests that the company maintained its pricing strategy and cost controls despite the revenue decline.

Net Revenues

Net revenues exhibited a consistent upward trend from February 2019 through January 2023, increasing from approximately $5.67 billion to $8.67 billion. However, a notable decline occurred in the most recent period ending January 28, 2024, with revenues decreasing to approximately $7.75 billion. This decline interrupts the prior growth trajectory.

Operating Income

Operating income more than doubled from February 2019 to January 2022, rising from about $436 million to $1.45 billion. It maintained a high level in January 2023 at roughly $1.50 billion before falling to approximately $1.24 billion in January 2024. Despite the recent decrease, the operating income remains significantly higher than the levels observed at the beginning of the period.

Operating Profit Margin

The operating profit margin increased steadily from 7.69% in February 2019 to a peak of 17.62% in January 2022. It showed a slight decline but remained relatively stable around 17% in January 2023. In the latest period, the margin decreased further to 16.05%, indicating some pressure on profitability but still reflecting a strong margin compared to the early years.

Overall Analysis

The company demonstrated strong growth in both revenue and profitability from 2019 to 2022, with operating income and margins improving significantly. The period from 2022 onward shows a reversal in these trends, with declines in net revenues and operating income in the most recent year, as well as a modest drop in operating margin. These patterns may suggest emerging challenges affecting sales volume or cost management in the latest fiscal year.

The financial data over the six-year period reveals notable trends in earnings, revenues, and profitability.

Net Earnings

Net earnings show a general upward trajectory from 2019 to 2022, increasing from approximately 334 million US dollars in 2019 to over 1.1 billion in 2022. This reflects a more than threefold growth during this period. However, after peaking in 2022, net earnings slightly plateaued in 2023 before experiencing a decline in 2024 to just under 950 million US dollars.

Net Revenues

Net revenues follow a somewhat similar growth path with steady increases from 2019 through 2023, rising from about 5.67 billion to 8.67 billion US dollars. In 2024, however, revenues decreased significantly to approximately 7.75 billion US dollars. This dip represents a reversal of the prior growth trend observed over the past five years.

Net Profit Margin

The net profit margin percentage indicates a substantial improvement from 2019 through 2022, moving from around 5.88% to a peak of 13.66%. This margin slightly contracts in 2023 and 2024, settling at 13.00% and 12.25%, respectively. Although there is a minor decline in the last two years, profitability remains markedly higher than at the start of the period.

In summary, the data suggests considerable growth in both net earnings and revenues up to 2022, accompanied by strong improvements in profitability. The subsequent decline in both revenues and net earnings in 2024, alongside a modest reduction in profit margin, may warrant further investigation to understand underlying causes and assess future financial stability.

Net Earnings

Net earnings show a consistent upward trend from 2019 through 2022, with values increasing from approximately $334 million in early 2019 to nearly $1.13 billion by January 2022. The figure stabilizes in 2023 at around $1.13 billion but declines notably in 2024 to approximately $950 million. This indicates strong growth over the initial four years, followed by a slight contraction in the most recent year.

Stockholders’ Equity

Stockholders’ equity demonstrates steady growth across the entire period, starting from about $1.16 billion in early 2019 and reaching over $2.13 billion by January 2024. The growth is more gradual between 2019 and 2023 and then accelerates significantly between 2023 and 2024, indicating an increase in the company’s net assets or retained earnings in the most recent year.

Return on Equity (ROE)

The Return on Equity reflects a strong upward trajectory from 28.87% in 2019 to a peak of 67.68% in 2022, suggesting increasing efficiency in generating profits from shareholders’ equity during this period. In 2023, the ROE remains high at 66.31% but declines substantially to 44.63% in 2024. Despite this drop, the 2024 ROE is still significantly higher than the starting point in 2019, implying sustained profitability.

Overall Analysis

The financial data indicates a period of robust growth in profitability and equity up to 2022, with net earnings and ROE both reaching peak levels, reflecting effective use of equity and strong earnings performance. The subsequent decline in net earnings and ROE in 2024, despite the increase in stockholders’ equity, might suggest increased equity base diluting returns or challenges impacting profitability. The consistent rise in stockholders’ equity throughout the entire period underscores an overall strengthening financial position.

The financial data indicates several notable trends over the six-year period.

Net Earnings

Net earnings exhibited a general upward trend from 2019 to 2022, increasing significantly from approximately 333.7 million USD in 2019 to over 1.1 billion USD in 2022. This peak level was largely maintained in 2023, recording a similar figure of about 1.128 billion USD. However, in 2024, net earnings experienced a decrease to around 950 million USD, indicating a contraction compared to the previous two years but remaining substantially above the levels observed before 2021.

Total Assets

Total assets showed consistent growth throughout the period, rising from approximately 2.81 billion USD in 2019 to 5.27 billion USD in 2024. The most significant increase occurred between 2019 and 2020, followed by steady growth with minor fluctuations. The increase in assets suggests ongoing investment or accumulation of resources, potentially supporting the company's operational and expansion activities.

Return on Assets (ROA)

Return on assets experienced variability during the period. Initially, ROA declined from 11.86% in 2019 to 8.78% in 2020, indicating reduced efficiency in generating earnings from assets. Subsequently, ROA improved markedly, reaching 14.6% in 2021 and peaking at around 24.3% in 2022. The elevated ROA levels were sustained into 2023 before decreasing to 18.01% in 2024. Despite the decline in the latest year, ROA remains considerably higher than early period values, reflecting generally improved asset utilization and profitability over time.