Williams-Sonoma (WSM) Q2 2025 earnings summary

Executive summary

• Q2 2024 delivered strong operating results with improved top-line trends, market share gains, and continued profitability focus; diluted EPS rose to $1.74, up 11.5% year-over-year, and operating margin reached 16.2%.

• Net revenues for Q2 2024 were $1.79 billion, down 4% year-over-year, with comparable brand revenue down 3.3% due to continued customer hesitancy in furniture purchases, partially offset by growth in emerging brands and children's furnishings.

• The company completed a two-for-one stock split in July 2024, with all per-share data retroactively adjusted.

• Cash and cash equivalents stood at $1.3 billion at quarter-end, with no debt.

• Strategic priorities remain: returning to growth, elevating customer service, and driving margin.

Financial highlights

• Q2 2024 net revenues: $1.79 billion, down from $1.86 billion in Q2 2023; gross margin rose to 46.2%, up 550 basis points year-over-year, driven by higher merchandise margins and supply chain efficiencies.

• Operating income was $290 million (16.2% margin, up 160 basis points year-over-year); net earnings were $226 million (12.6% of revenue).

• Diluted EPS was $1.74, up 12% year-over-year.

• SG&A expenses for Q2 2024 rose to $536 million (30% of revenues), up 390 basis points year-over-year, mainly due to higher incentive compensation and advertising.

• Cash balance at quarter-end was $1.3 billion, with $203 million returned to shareholders via buybacks and dividends.

Outlook and guidance

• Full-year 2024 net revenues expected to decline 4% to 1.5%, with comps down 5.5% to 3%.

• Operating margin guidance raised to 17.4%-17.8% (excluding a Q1 adjustment); including the adjustment, 18.0%-18.4%.

• 2024 is a 53-week year, with the extra week expected to add 150 bps to revenue growth and 10 bps to margin.

• Long-term guidance reiterated: mid- to high-single-digit revenue growth and operating margins in the mid- to high teens.

• Liquidity is expected to remain strong, with cash on hand, operating cash flow, and available credit facilities sufficient for operational and capital needs over the next 12 months.