12:41 PM EDT, 03/11/2024 (MT Newswires) -- Williams-Sonoma's ( WSM ) comparable sales progress in Q4 won't be linear when the company reports its results Wednesday, but the worst seems to be in the rearview, RBC Capital Markets said in a note.

For Q4, RBC said it raised its comparable sales estimate to -5.6% from -7.1% previously on the back of improving site traffic data. It also expects the company to assume current demand trends hold throughout 2024, as with other housing-tied names.

RBC said it expects the more stable demand outlook to give management the confidence to guide operating margin to around 15%, allowing for flexibility to allocate funds towards advertising and labor if trends begin to improve.

"Our upside scenario assumes consumer demand has troughed and slowly improves from here, resulting in FY'24/FY'25 comp sales of +2%/+5%," RBC analysts said.

RBC kept its outperform rating on the stock while raising its price target to $261 from $165.

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