Williams-Sonoma, Inc. (WSM)

Williams-Sonoma reported second-quarter 2026 results on August 26, with net revenues up 6.7 percent and comparable brand revenue, sales at stores and websites open a year or more, up 6.2 percent 3.

Net revenues were $1.96 billion for the 13 weeks ended August 2, 2026, and diluted earnings per share were $2.84 on the standard GAAP basis and $2.10 on the company's adjusted non-GAAP basis 63.

The gap comes from IEEPA tariff refunds, which cut cost of goods sold by $167.8 million and were adjusted out of non-GAAP figures 3. The Supreme Court held that law does not allow such tariffs 5.

The company raised its fiscal 2026 outlook to net revenue growth of 4.7 percent to 7.2 percent and a non-GAAP operating margin of 17.8 percent to 18.2 percent, assuming current tariffs stay 3.

On October 16, 2026, the board appointed Lynn Martin as a director, effective October 19, 2026 1. Martin is President of NYSE Group, a subsidiary of Intercontinental Exchange, the company's release said 2.

Chuck Williams opened a store in Sonoma, California in 1956 to sell French cookware that could not be found in America 5. The company was incorporated in 1973 and grew beyond the kitchen into nearly every area of the home 5.

Growth came partly by buying brands: Pottery Barn, established in 1949, was acquired in 1986, and Rejuvenation, founded in 1977, was acquired in 2011 5.

The company launched Pottery Barn Kids in 1999, West Elm in 2002, Pottery Barn Teen in 2003, Mark and Graham in 2012 and GreenRow in 2023 5. In 2025 it acquired the intellectual property of Dormify 5.

Revenue was nearly flat across three years: $7.75 billion in fiscal 2023, $7.71 billion in fiscal 2024 and $7.81 billion in fiscal 2025 5. Net earnings were $950 million, $1.13 billion and $1.09 billion in the same years 5.

Fiscal 2024 held a 53rd week, which the company estimates added 150 basis points to revenue growth 5. Margins also gained in fiscal 2024 after a $49.0 million correction of freight expense booked in earlier years 5.

In fiscal 2025 net revenues rose 1.2 percent, as comparable brand revenue grew 3.5 percent and the extra week in fiscal 2024 and lower franchise revenue held the total back 5. Retail comps rose 6.4 percent and e-commerce comps 2.2 percent 5.

By brand in fiscal 2025, Williams Sonoma comps rose 6.9 percent, Pottery Barn Kids and Teen 4.4 percent, West Elm 2.9 percent and Pottery Barn 0.4 percent 5.

Tariffs shaped the stretch: the company said they flowed into cost of goods sold in fiscal 2025, and its mitigation efforts reduced the overall effect 5. Diluted earnings per share reached a record $8.84 5.

Pottery Barn, West Elm and Williams Sonoma

Pottery Barn, the largest brand, sells furniture, bedding, lighting and rugs 5. Its net revenues were $770.8 million in the second quarter, against $724.6 million a year earlier 4.

West Elm sells modern, affordable home decor and had $496.3 million in the quarter, against $468.6 million 54. Williams Sonoma, the namesake kitchen brand with Williams Sonoma Home, had $268.8 million, against $249.1 million 54.

Pottery Barn Kids and Teen had $297.4 million against $286.7 million 4. The quarter's brand comps were 5.1 percent at Pottery Barn, 6.4 percent at West Elm and 3.5 percent at Kids and Teen, the company said 4.

Smaller brands and business to business

Rejuvenation sells lighting and hardware, made to order at its Portland facility 5. Mark and Graham sells monogrammed gifts, and GreenRow sells vintage-inspired pieces made by artisans 5.

Rejuvenation, Mark and Graham, franchise operations, GreenRow and Dormify together had $126.4 million in the quarter, against $107.8 million 4. Brands also sell to businesses, and the company lists growing that division as a risk 5.

Stores, factories and people

The company operated 506 stores: 473 in the U.S. and Puerto Rico across 41 states, 18 in Canada, 13 in Australia and 2 in the United Kingdom 5. Franchisees run 90 more locations in Mexico, South Korea, India and the Philippines 5.

It makes upholstered furniture and lighting in Mississippi, North Carolina and Oregon 5. About 19 percent of products were made in the U.S. in fiscal 2025, and about 19 percent came from China, 16 percent from Vietnam and 15 percent from India 5.

Laura Alber is President and Chief Executive Officer and a director since 2010, and Scott Dahnke is the independent board chair 7. The company had about 19,800 associates on February 1, 2026 5.

Rivals and problems

The company says it competes with e-commerce retailers, large department stores, discount retailers, specialty home retailers and other catalogs 5. It names no single rival in that passage 5.

Tariffs are the main pressure: second-quarter merchandise margins were down 230 basis points, mostly from tariff costs, the company said 3. Its legal proceedings were described as not currently material 5.

The umbrella, in words

The company's brands are Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, GreenRow and Dormify 4. They support The Key Rewards loyalty and credit card program 4.

The annual report lists its subsidiaries in Exhibit 21.1, and the company is one retail operation with a single reportable segment 5. Franchise partners operate stores under agreed contracts, not as owned stakes 5.

The company owned 471,000 square feet, mainly in California for its headquarters and data center operations, and leased the rest, including 3,269,000 square feet in New Jersey and 3,150,000 in California 5.

The proxy statement lists BlackRock with 9.6 percent of the shares, Aristotle Capital Management with 7.8 percent and Blackhill Capital with 6.5 percent 7.

The company now expects fiscal 2026 net revenues to grow 4.7 percent to 7.2 percent, comps 4.0 percent to 6.5 percent, and a non-GAAP operating margin of 17.8 percent to 18.2 percent 3.

It also expects annual interest income of about $25 million and an effective tax rate of about 26 percent, and it assumes oil prices stay elevated 3. Its guidance includes the new Section 301 tariffs announced on July 23 and no benefit from refunds 3.

Over the long term, the company continues to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens 3.

Its three priorities for 2026 are accelerating growth, delivering world-class customer service and driving earnings 5. Growth levers named are new furniture collections, baby, dorm and West Elm Office offerings, and business-to-business expansion 5.

It plans to keep using cash for inventory, capital expenditures, dividends and stock repurchases for the rest of fiscal 2026 4. A $1.0 billion repurchase authorization approved in November 2025 starts once the $50.8 million left under the September 2024 one is used 4.

The 10-K says the company is in the process of launching Dormify as a new brand 5.