Williams-Sonoma (WSM) investor relations material

Executive summary

• Q2 delivered 3.7% comparable brand revenue growth, with all brands posting positive comps and emerging brands achieving double-digit gains.

• Operating margin expanded to 17.9%, and diluted EPS rose 19.8% to $2.00, outperforming industry trends despite macro uncertainty and weak housing market.

• Strong performance in both furniture and non-furniture categories, with robust results in retail (7.3% comp) and e-commerce (2.0% comp) channels.

• Maintained strong liquidity with $986M in cash and no debt, supporting continued investment and shareholder returns.

• AI investments and innovation are delivering measurable results in customer experience, supply chain, and internal operations.

Financial highlights

• Q2 net revenues reached $1.84B, up from $1.79B year-over-year, exceeding expectations.

• Gross margin improved to 47.1%, up 220 bps year-over-year, driven by price increases and supply chain efficiencies.

• Operating income grew to $328M, with net earnings at $247.6M and diluted EPS at $2.00.

• SG&A rate decreased to 29.2% of revenues, with total SG&A expenses at $537M.

• Ended Q2 with $986M cash, $283M in operating cash flow, and no outstanding borrowings.

Outlook and guidance

• Raised full-year comparable brand revenue growth guidance to 2%-5% and net revenue growth to 0.5%-3.5%.

• Operating margin guidance reiterated at 17.4%-17.8% for fiscal 2025 due to incremental tariff costs.

• Long-term targets include mid- to high single-digit annual net revenue growth and mid- to high teens operating margin.

• Management expects macroeconomic uncertainty, higher tariffs, and inflation to pressure costs and potentially earnings.

• Company believes it can offset some, but not all, of the increased tariff costs.