Williams-Sonoma (WSM) quarter year WSM Financial Results Summary
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Williams-Sonoma, Inc. (WSM) Q2 2026: Revenue Growth and EPS Surge — Positive Outlook
Williams-Sonoma, Inc. (NYSE: WSM) reported a strong second quarter for fiscal 2026, with notable improvements in revenue and earnings per share (EPS). The company achieved a 6.7% increase in total revenue, amounting to $1.95 billion, compared to $1.83 billion in the same quarter last year. This growth reflects a 6.2% increase in comparable brand revenue. Additionally, the GAAP diluted EPS rose to $2.84, representing a 42.0% increase year-over-year, while the non-GAAP diluted EPS was $2.10, up 5.0% from the previous year.
This quarter's performance is a positive outcome for shareholders, showcasing the company's ability to navigate challenging macroeconomic conditions and gain market share. The significant increase in GAAP EPS indicates strong operational efficiency and effective cost management, which should bolster investor confidence.
Key Financial Metrics:
- Total Revenue: $1.95 billion, up $0.12 billion or 6.7% YoY
- Comparable Brand Revenue: +6.2%
- GAAP Operating Margin: 22.9%
- Non-GAAP Operating Margin: 17.3%
- GAAP Diluted EPS: $2.84, up 42.0% YoY
- Non-GAAP Diluted EPS: $2.10, up 5.0% YoY
- Gross Margin (GAAP): 51.6%, up 450bps YoY
- SG&A (GAAP): $563 million, up 5.0% YoY
- Operating Income: $449 million (GAAP), $338 million (non-GAAP)
Operational Highlights:
- The company reported a GAAP operating margin of 22.9%, which is a 500bps improvement compared to the prior year. The non-GAAP operating margin decreased slightly by 60bps to 17.3%.
- Gross margins benefited from IEEPA tariff refunds, contributing 610bps to the GAAP gross margin, although this was partially offset by lower merchandise margins due to tariff costs.
- Merchandise inventories increased by 1.0% year-over-year to $1.45 billion, reflecting effective inventory management amidst fluctuating demand.
Shareholder Returns and Guidance:
Williams-Sonoma maintained a strong liquidity position with $1.0 billion in cash and $696 million in operating cash flow, which included $200.2 million from tariff refunds. The company returned $90 million to shareholders through dividends during the quarter.
Looking ahead, Williams-Sonoma raised its full-year 2026 guidance, now expecting annual net revenues to grow between 4.7% and 7.2%, with comparable sales projected to increase between 4.0% and 6.5%. The company anticipates a non-GAAP operating margin of 17.8% to 18.2% for the fiscal year.
Forward Catalysts:
Investors should watch for the upcoming third quarter results, particularly how the company manages its inventory and pricing strategies in light of ongoing tariff impacts and macroeconomic conditions. Additionally, any updates on the collection of deferred tariff refunds and their effect on future earnings will be crucial. The company's ability to sustain its growth trajectory amidst these challenges will be a key focus for shareholders in the coming months.
Note: The following tables are in thousands.
| Item | Q2 26 | Q2 25 | Growth % Q2 26 | Growth % Q2 25 |
|---|---|---|---|---|
| Pottery Barn | $ 770,000 | $ 724,000 | 5.1 % | 1.1 % |
| West Elm | $ 496,000 | $ 468,000 | 6.4 % | 3.3 % |
| Williams Sonoma | $ 268,000 | $ 249,000 | 7.6 % | 5.1 % |
| Pottery Barn Kids and Teen | $ 297,000 | $ 286,000 | 3.5 % | 5.3 % |
| Other | $ 126,000 | $ 107,000 | N/A | N/A |
| Total | $ 1,950,000 | $ 1,830,000 | 6.2 % | 3.7 % |
| August 2, 2026 | February 1, 2026 | August 3, 2025 | |
|---|---|---|---|
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | $ 1,028,936 | $ 1,019,801 | $ 985,823 |
| Accounts receivable, net | 146,219 | 126,821 | 115,509 |
| Merchandise inventories, net | 1,447,423 | 1,462,849 | 1,433,605 |
| Prepaid expenses | 105,583 | 80,053 | 100,622 |
| Other current assets | 18,385 | 23,663 | 19,961 |
| Total current assets | 2,746,546 | 2,713,187 | 2,655,520 |
| Property and equipment, net | 1,121,677 | 1,095,158 | 1,029,526 |
| Operating lease right-of-use assets | 1,322,644 | 1,270,272 | 1,221,792 |
| Deferred income taxes, net | 74,433 | 99,161 | 95,797 |
| Goodwill | 77,369 | 77,398 | 77,374 |
| Other long-term assets, net | 163,637 | 156,736 | 148,359 |
| Total assets | $ 5,506,306 | $ 5,411,912 | $ 5,228,368 |
| Liabilities and stockholders' equity | |||
| Current liabilities | |||
| Accounts payable | $ 703,822 | $ 637,985 | $ 601,661 |
| Accrued expenses | 207,857 | 314,588 | 202,914 |
| Gift card and other deferred revenue | 618,926 | 602,940 | 578,192 |
| Income taxes payable | 62,098 | 78,943 | 74,329 |
| Operating lease liabilities | 217,032 | 221,356 | 222,572 |
| Other current liabilities | 88,843 | 98,318 | 86,641 |
| Total current liabilities | 1,898,578 | 1,954,130 | 1,766,309 |
| Long-term operating lease liabilities | 1,310,914 | 1,235,549 | 1,171,675 |
| Other long-term liabilities | 155,900 | 139,674 | 140,688 |
| Total liabilities | 3,365,392 | 3,329,353 | 3,078,672 |
| Stockholders' equity | |||
| Preferred stock | — | — | — |
| Common stock | 1,178 | 1,188 | 1,219 |
| Additional paid-in capital | 543,931 | 587,433 | 544,244 |
| Retained earnings | 1,611,605 | 1,509,129 | 1,622,191 |
| Accumulated other comprehensive loss | -14,142 | -13,176 | -15,943 |
| Treasury stock, at cost | -1,658 | -2,015 | -2,015 |
| Total stockholders' equity | 2,140,914 | 2,082,559 | 2,149,696 |
| Total liabilities and stockholders' equity | $ 5,506,306 | $ 5,411,912 | $ 5,228,368 |
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