Williams-Sonoma (WSM) Q3 2025 earnings summary

Executive summary

• Q3 2024 delivered results above expectations, with improved sales trends, market share gains, and strong profit performance; diluted EPS grew 7.1% year-over-year to $1.96, and operating margin reached 17.8%.

• Net revenues for Q3 2024 were $1.80 billion, down 2.9% year-over-year, driven by continued softness in furniture demand, partially offset by growth in emerging brands and children's home furnishings.

• Pottery Barn saw a 7.5% comparable brand revenue decline, while Pottery Barn Kids and Teen grew 3.8%; West Elm declined 3.5% and Williams Sonoma was nearly flat at -0.1%.

• Raised full-year 2024 outlook for both revenue and operating margin, reflecting optimism for Q4.

• Board approved an additional $1 billion share repurchase authorization, bringing total authorization to $1.3 billion.

Financial highlights

• Q3 2024 net revenues: $1.80 billion, down from $1.85 billion in Q3 2023; comparable sales declined 2.9%.

• Gross margin improved to 46.7%, up 230 basis points year-over-year, driven by higher merchandise margins and supply chain efficiencies.

• Operating income was $321 million, with an operating margin of 17.8%, up 80 basis points year-over-year.

• Diluted EPS was $1.96, up $0.13 or 7% from last year.

• Ended the quarter with $827 million in cash and no debt; returned $606 million to shareholders through buybacks and dividends.

Outlook and guidance

• Full-year 2024 net revenue guidance raised to a range of down 3% to down 1.5%, with comps between down 4.5% to down 3%.

• Full-year operating margin guidance increased to 18.4%-18.8% (including a 60 bps Q1 adjustment); excluding the adjustment, range is 17.8%-18.2%.

• Additional 53rd week in fiscal 2024 expected to add 150bps to net revenue and 10bps to operating margin.

• Capital expenditures for 2024 expected to be $250 million, with 75% focused on e-commerce and supply chain.

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