Williams-Sonoma (WSM) Q2 2026 earnings summary

Executive summary

• Achieved Q2 comparable brand revenue growth of 3.7% year-over-year, with all major brands and emerging brands posting positive comps and double-digit gains.

• Operating margin expanded to 17.9%, up 240bps, and diluted EPS rose 19.8% to $2.00, with net earnings at $247.6 million.

• Growth driven by innovation, new product launches, strategic collaborations, and double-digit B2B and emerging brand growth.

• AI investments are improving customer service, supply chain, and internal operations.

• Maintained strong liquidity with $986 million in cash and no outstanding debt.

Financial highlights

• Q2 net revenues reached $1.84 billion, up from $1.79 billion, exceeding expectations.

• Gross margin improved to 47.1%, up 220bps year-over-year, driven by merchandise margin and supply chain efficiency.

• Operating income grew to $328 million, with operating margin at 17.9%.

• Diluted EPS increased 19.8% to $2.00.

• Net earnings for Q2 were $247.6 million, up from $216.9 million last year.

Outlook and guidance

• Raised full-year comparable brand revenue growth guidance to 2%-5% and net revenue outlook to +0.5% to +3.5%.

• Full-year operating margin guidance reiterated at 17.4%-17.8%, despite higher tariffs.

• Capital expenditures for FY25 expected between $250M-$275M, with 85% allocated to e-commerce, retail optimization, and supply chain.

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

• Anticipates incremental tariff costs from China, India, Vietnam, and metals, which may pressure margins.