Williams-Sonoma 2026 Q2 Earnings Beats Expectations, Net Income Grows 14.2%

Williams-Sonoma reported its fiscal 2026 Q2 earnings on Aug 27th, 2025. The company exceeded revenue expectations and raised full-year sales guidance. Earnings and operating margin growth were strong, with EPS and net income rising 20.1% and 14.2%, respectively, and the operating margin reaching 17.9%.

Revenue
Williams-Sonoma’s total revenue grew 2.7% year over year to $1.84 billion, beating the Street estimate of $1.83 billion. Pottery Barn led with $724.58 million in sales, followed by Pottery Barn Kids and Teen, which contributed $286.75 million. West Elm posted revenue of $468.55 million, while the core Williams Sonoma brand generated $249.05 million. Additional segments, including other lines, added $107.83 million to the total. The performance reflected a 3.7% increase in comparable sales across the company’s brands.

Earnings/Net Income
Williams-Sonoma’s net income increased 14.2% to $247.56 million in fiscal 2026 Q2, compared to $216.85 million in the prior year period. Earnings per share rose 20.1% to $2.03, reflecting improved operating efficiency and cost control. The strong earnings growth underscored the company’s ability to deliver results despite macroeconomic and tariff pressures.

Price Action
The stock price of Williams-Sonoma fell 5.80% during the latest trading day and declined 3.56% during the most recent full trading week. However, it edged up 2.09% month-to-date, showing some recovery in investor sentiment.

Post-Earnings Price Action Review
A 30-day investment strategy of buying Williams-Sonoma shares after the earnings report and holding delivered a robust 82.27% return, outperforming the benchmark by 23.42%. The strategy also exhibited a CAGR of 23.03% with no maximum drawdown and a Sharpe ratio of 0.50. The performance, despite 45.75% volatility, demonstrated strong risk-adjusted returns and reinforced the effectiveness of the post-earnings approach.

CEO Commentary
CEO Laura J. Alber highlighted the strong Q2 performance, citing 3.7% comp sales growth and an operating margin of 17.9%. She emphasized key growth drivers such as product innovation, strategic partnerships, and B2B expansion, particularly noting Rejuvenation’s continued double-digit comp growth. Alber also underscored improvements in customer service and AI integration across supply chain and operations, which are already generating productivity gains. While acknowledging the impact of tariffs, she expressed confidence in mitigation strategies including cost concessions and operational efficiencies.

Guidance
The company raised its full-year 2025 comp sales growth guidance to a range of 2%–5%, up from previous expectations. It maintained its operating margin outlook of 17.4%–17.8%. CFO Jeff Howie outlined capital allocation plans of $250M–$275M, with 85% directed toward e-commerce, retail optimization, and supply chain efficiency. The company expects continued earnings flow-through from top-line growth, while remaining flexible in the face of ongoing tariff uncertainties.

Additional News
On Aug 27th, 2025, Williams-Sonoma returned $280 million to shareholders through buybacks and dividends, using its remaining $903 million in repurchase authorization. The company ended the quarter with $986 million in cash and $283 million in operating cash flow. Additionally, it reported a 17.7% increase in inventory to $1.4 billion, part of a strategic move to mitigate the impact of higher tariffs in fiscal 2025. CEO Laura Alber credited strong execution, a diversified brand portfolio, and an omnichannel platform for the company’s growth outlook. Williams-Sonoma also raised its fiscal 2025 revenue guidance to $7.751 billion to $7.982 billion, reflecting confidence in its ability to drive continued growth across core and emerging brands.