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.

• Retail channel led with 8.5% comp growth, supported by store remodels and enhanced in-store experiences.

• AI initiatives and digital-first strategies drove customer service improvements and operational efficiencies.

• Strong liquidity maintained with $885 million in cash and significant shareholder returns through repurchases and dividends.

Financial highlights

• Q3 2025 net revenues reached $1.88 billion, up 4.6% year-over-year; FY24 net revenues were $7.7 billion, with 66% from ecommerce.

• Gross margin improved to 46.1%, up 70 basis points year-over-year.

• SG&A was 29.1% of revenues, up 60 basis points, mainly due to higher incentive compensation and digital advertising.

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

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

Outlook and guidance

• FY2025 net revenue guidance: comps of +2% to +5%, total net revenue growth of +0.5% to +3.5%.

• Operating margin guidance raised to 17.8%–18.1% for FY2025.

• Guidance reflects current tariffs, with incremental tariff rate now at 29%.

• Long-term targets: mid- to high-single-digit revenue growth and mid- to high-teens operating margins.

• Management remains cautious due to macroeconomic uncertainty, including tariffs, housing market, and inflation.