Williams-Sonoma (WSM) Q3 2026 earnings summary

Executive summary

• Q3 2025 delivered a 4.0% increase in comparable brand revenue, with all major brands posting positive comps and diluted EPS rising 4.8% to $1.96.

• Operating margin expanded to 17.0%, and gross margin improved to 46.1%, driven by higher merchandise margins and supply chain efficiencies.

• Strong liquidity maintained with $885 million in cash and no outstanding debt, supporting significant shareholder returns.

• AI initiatives and digital-first strategies enhanced customer service and operational efficiency.

• Company continues to outperform a declining and fragmented industry, gaining market share.

Financial highlights

• Q3 2025 net revenues reached $1.88 billion, up 4.6% year-over-year; nine-month revenues were $5.45 billion.

• Gross margin rose to 46.1% (+70bps year-over-year), and operating margin was 17.0% (+10bps year-over-year).

• SG&A expenses increased to $549 million (29.1% of revenues), mainly due to higher incentive compensation and digital advertising.

• Cash balance at quarter-end was $885 million, with no outstanding debt.

• $792.3 million returned to shareholders in the first nine months of 2025 via repurchases and dividends.

Outlook and guidance

• Fiscal 2025 net revenue guidance reiterated at +0.5% to +3.5%, with comparable brand revenue growth expected between 2% and 5%.

• Operating margin guidance raised to 17.8%–18.1% for fiscal 2025.

• Guidance reflects increased tariff impact in Q4 and assumes no major macroeconomic changes.

• Long-term expectations remain for mid- to high single-digit annual net revenue growth and operating margins in the mid- to high teens.

• Annual interest income expected at $35 million and effective tax rate at 26.0%.