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Shares of Williams-Sonoma (WSM) tumbled in intraday trading Thursday as comparable sales fell more than expected across a number of the company's brands, leading the retailer to cut its full-year outlook.
The company behind retail brands including its namesake stores, Pottery Barn and West Elm, reported $225.7 million in net income for the second quarter, better than analysts polled by Visible Alpha had expected. Total revenue of $1.79 billion fell 4% year-over-year and narrowly missed estimates.
Comparable sales fell more than analysts had expected, down 0.8% at its namesake brand, 7.1% at Pottery Barn, and 4.8% at West Elm.
The struggles of higher-end retailers like Williams-Sonoma has been well-documented as inflation has led many consumers to focus spending on essentials and delay home-improvement projects or other costly updates.
Target (TGT) executives said earlier this week that the retailer has become a destination for low-cost home updates, noting they saw growth in products like candles and throw pillows in the second quarter. TJX Companies (TJX), the parent of retailers including HomeGoods, also reported solid revenue growth this week as consumers hunt for value.
Williams-Sonoma updated its fiscal 2024 outlook Thursday, expecting full-year revenue to fall 4% to 1.5%, compared with previous projections of a 3% drop to a 3% increase. Comparable sales are expected to decline between 5.5% and 3%, compared with a prior range of a 4.5% decline to a 1.5% increase.
Williams-Sonoma shares fell 8.6% as of about 2:30 p.m. ET Thursday to $131.54. Still, they are up 30% year-to-date.
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Initial jobless claims increased last week but point to a lower unemployment rate in August.
First-time claims for unemployment insurance for the week ending Aug. 17 came in at 232,000, according to data from the Labor Department. Claims rose by 4,000 from the prior week’s results, which were adjusted slightly higher. This week's numbers were slightly above projections from economists surveyed by the and
The modest change in jobless levels likely won't move the August unemployment rate much, showing the labor market is stabilizing, said Nancy Vanden Houten, senior economist at Oxford Economics.
“Despite the rise in the latest week, claims appear to be leveling off on a trend basis,” Vanden Houten wrote.
Market watchers are laser-focused on employment data since it could impact Federal Reserve officials, who are poised to act on interest rates.
A July jump in the unemployment rate to 4.3% raised concerns among some investors that the economy was weaker than previously thought, increasing the likelihood that the Fed would begin to cut interest rates at its next meeting in September.
Since then, weekly initial jobless claims have slowed, showing that the labor market is still resilient. Vanden Houten said stability in the job market could limit how aggressively the Fed may act in its next meeting. Some economists believe the central bank should make a more aggressive 50-basis-point cut instead of the quarter-point cut that most predict.
“There is nothing in the claims data to change our view that, while the labor market is softening, it isn't weak enough to warrant anything more than a 25bps rate cut at the Fed's September meeting,” Vanden Houten wrote.
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More homes are up for sale, but not enough to drive prices down or break the slow housing market from the doldrums.The volume of sales for existing homes rose 1.3% in July from June but remained near the lowest ever, the National Association of Realtors said Thursday. Houses sold at a seasonally adjusted annual rate of 3.95 million, the slowest pace for any July since 2010. It was the first time in five months that sales had risen.Despite an uptick in inventory—up 0.8% from June and 19.8% over the last 12 months—high prices and lack of selection continue to stifle sales. There were 1.33 million homes on the market in July, far fewer than the 1.9 million for sale in July 2019 before the pandemic hit. The median existing-home sales price was $422,600, 4.2% higher than the previous July.
The figures highlighted how daunting the housing market has become for first-time buyers since the pandemic hit—home prices are up 49% from July 2019, when the median home sold for $283,600.It's made for "quite a sizable gain over the past five years," Lawrence Yun, chief economist at the National Association of Realtors, said on a conference call with reporters. "Definitely very good news for homeowners getting all of those gains, but frustrating news for people who want to enter the homeownership market."
Mortgage rates have been falling in recent months, and economists say that could help break the high-price, low-sales dynamic that's defined the housing market for the past few years. According to Freddie Mac, the average rate offered for a 30-year mortgage was 6.46% this week, down from the recent peak of 7.79% last fall. Rates have fallen as financial markets anticipate the Federal Reserve will cut its influential fed funds rate next month as it winds down its battle against inflation.
For-sale inventory has been low because many homeowners have been reluctant to trade in home loans they secured when fixed rates were lower, but the recent drop in rates is eroding this "lock-in effect."However, Yun noted inventory is still low enough that buyers have to compete for the relatively few homes on the market, keeping upward pressure on prices.
"Inventory is trying to increase back up to normal, but it's not back up to normal yet," he said.
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Peloton Interactive (PTON) shares raced more than 35% higher in intraday trading Thursday after the company posted year-over-year quarterly revenue growth for the first time in more than two years.
The home fitness equipment and subscription company posted revenue of $643.6 million in its fiscal fourth quarter, up 0.2% year-over-year—its first quarterly gain since Q2 2022—and well above analysts' expectations, per Visible Alpha. Subscription revenue was $431.4 million, 2.3% higher.
Peloton also delivered a narrower-than-expected loss of $30.5 million, or 8 cents per share, compared with $241.8 million, or 68 cents per share, a year earlier.
"Our improvement in profitability reflects our continued focus on aligning our costs with the size of our business," Peloton said. "We made substantial progress toward achieving over $200 million run-rate cost savings from our restructuring plan announced in May, delivering approximately $15 million in cost savings in the quarter."
Peloton called for fiscal 2025 revenue of $2.4 billion to $2.5 billion, which would be a 9% drop from fiscal 2024 at the midpoint and below Visible Alpha consensus of $2.68 billion.
In May, Peloton announced new cost-cutting measures, including layoffs, and that CEO Barry McCarthy was stepping down. On Thursday, it noted that its process to find a new CEO "is well underway and we look forward to sharing more when we have an announcement."
Shares of Peloton surged 37% to $4.60 as of 1:15 p.m. ET Thursday.
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BJ’s Wholesale Club (BJ) shares sank after the retailer gave soft guidance as it looks to invest more money into the business.
BJ’s CFO Laura Felice said full-year adjusted earnings per share (EPS) could be at the low end of its forecast of $3.75 to $4 because of long-term investments. Analysts were looking for $3.88, according to estimates compiled by Visible Alpha.
BJ’s posted second-quarter adjusted EPS of $1.09, with revenue increasing 4.5% from a year ago to $5.21 billion. Net sales were up 4.4% to $5.09 billion, and membership fees jumped 8.9% to $113.1 million. All were above analysts' estimates.
Selling, general, and administrative expenses (SG&A) rose 8% to $750.3 million.
CEO Bob Eddy said that the company had its 10th consecutive month of traffic growth, and that the quarterly results “demonstrate the meaningful progress we are making on our long term strategic initiatives.”
Shares of BJ's were down over 6% at $81.63 in intraday trading Thursday, though even with Thursday’s losses, they've gained more than 22% since the start of the year.
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There is widespread anger in Ethiopia over the 25-year jail term handed to a landlord who br¥tally r@p£d and m¥rd£red his tenant’s seven-year-old daughter.
Heaven Awot was taking from her home, s3xually a§§aulted, mutil@ted, and k+lled by her mother’s landlord, Getnet Baye, in the northwestern city of Bahir Dar in August 2023.
He was sentenced to only 25 years in prison. However, the case attracted widespread attention after he recently launched an appeal. The case is now adjourned until October, BBC reports.
The case has sparked widespread cond£mnation and demands for justice, and over 200,000 people have signed an online petition calling for a review of the sentencing to “reflect the gravity of the crime” and to offer support for Heaven’s mother, Abekyelesh Adeba.
The Ethiopian Women Lawyers Association (EWLA) has also denounced the sentencing as “very light,” stating that “the m¥rder by itself should have been enough to sentence him to life imprisonment or to d£@th.
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