Williams-Sonoma (WSM) Q2 2027 earnings summary

Executive summary

• Achieved Q2 2026 comparable brand revenue growth of 6.2% and total revenue growth of 6.7% year-over-year, outperforming a flat home furnishings industry and gaining market share.

• All brands posted positive comps, with Pottery Barn (5.1%), Williams Sonoma (7.6%), West Elm (6.4%), and Pottery Barn Kids and Teen (3.5%) showing notable strength; emerging brands and B2B delivered double-digit growth.

• GAAP operating margin reached 22.9% and non-GAAP operating margin was 17.3%; diluted EPS was $2.84 (GAAP, +42% YoY) and $2.10 (non-GAAP, +5% YoY), with a $1.06 per share benefit from tariff refunds.

• Raised full-year 2026 guidance for both revenue and operating margin, reflecting confidence in ongoing initiatives and execution.

• Maintained strong liquidity with $1.03 billion in cash and $696 million in operating cash flow.

Financial highlights

• Q2 2026 net revenues reached $1.96 billion, up from $1.84 billion in Q2 2025.

• Q2 2026 gross margin (GAAP) was 51.6%, up 450bps YoY, driven by tariff refunds and supply chain efficiencies; non-GAAP gross margin was 45.5%, down 160bps YoY due to tariffs.

• Q2 2026 operating income (GAAP) was $449 million (22.9% margin); non-GAAP was $338 million (17.3% margin).

• Q2 2026 diluted EPS was $2.84 (up from $2.00 YoY); non-GAAP diluted EPS was $2.10 (up 5% YoY).

• E-commerce comps up 6.5%, retail up 5.5%.

Outlook and guidance

• Fiscal 2026 net revenue growth expected between 4.7% and 7.2%; comps between 4.0% and 6.5%.

• Non-GAAP operating margin guidance raised to 17.8%-18.2%.

• Guidance assumes all current tariffs remain, elevated oil prices, and no further tariff refund benefits.

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

• Liquidity expected to remain strong, with sufficient cash, operating cash flow, and credit facilities.