12:31 PM EDT, 03/13/2024 (MT Newswires) -- Williams-Sonoma ( WSM ) reported fiscal fourth-quarter results Wednesday that surpassed expectations despite a challenging home furnishings market, while the company expanded its share repurchase program and increased its quarterly dividend.

The housewares retailer posted adjusted earnings of $5.44 a share for the quarter ended Jan. 28, down from $5.50 a year ago but ahead of the Capital IQ-polled consensus of $5.16. Revenue dropped to $2.28 billion from $2.45 billion, coming in above the Street's view of $2.23 billion.

"Our revenues came in at the high end of our expectations, driven by strong holiday performance across our portfolio of brands, partially offset by ongoing customer hesitancy towards big-ticket expenditures," Chief Financial Officer Jeffrey Howie said during an earnings call, according to a Capital IQ transcript.

The company also authorized a new $1 billion stock buyback program and raised its quarterly dividend by 26% to $1.13 per share. The stock surged 19% in midday trading.

Comparable brand revenue dropped 6.8%, compared with a 9.2% fall modeled by analysts and a 0.6% decrease in the prior-year quarter. By brand, West Elm sales tumbled about 15% while Williams-Sonoma ( WSM ) inclined 1.6%. Pottery Barn ( WSM ) and Pottery Barn Kids and Teen logged declines of 9.6% and 2.5%, respectively.

Gross margin improved by 480 basis points to 46%, buoyed by higher merchandise margins and lower supply chain costs. Selling, general and administrative expenses widened to $590.5 million from $540.1 million year on year, according to the company.

For fiscal 2024, the company anticipates revenue to be down 3% to up 3% and comparable sales between a 4.5% decrease and a 1.5% gain. The Street is looking for revenue of $7.6 billion and same-store sales to move 1.2% lower. In the just-ended fiscal year, revenue slid to $7.75 billion from $8.67 billion, while comparable brand revenue retreated 9.9%.

"We anticipate 2024 will be a year of continued macroeconomic uncertainty," Howie said on the call. "Lower interest rates could spur the housing market and shift consumer spending back to home, but timing is hard to predict."

Williams-Sonoma ( WSM ) sees sequential improvement throughout the year on its topline, while supply chain is set to be a tailwind on the bottom line through at least the first half, partially offset by higher advertising spend, according to Howie. For the long-term, the home retailer continues to expect mid-to-high-single-digit annual revenue growth with an operating margin in the mid-to-high teens.

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