Williams-Sonoma Inc. reported second-quarter results that exceeded analyst expectations, yet its shares declined 4.6% in premarket trading on Wednesday.
The San Francisco-based home furnishings retailer posted adjusted earnings per share of $2.10, topping the consensus estimate of $2.06. Revenue rose 6.7% year-over-year to $1.96 billion, surpassing forecasts of $1.92 billion. Comparable brand revenue increased 6.2%.
Adjusted operating margin narrowed to 17.3% from 17.9% a year earlier, reflecting a 60-basis-point decline driven by lower merchandise margins. The company attributed the pressure to tariff costs, which offset gains from supply chain efficiencies and occupancy leverage. GAAP operating margin expanded to 22.9%, boosted by a $167.8 million refund from previously paid tariffs under the International Emergency Economic Powers Act—amounts excluded from adjusted results.
President and CEO Laura Alber highlighted the quarter’s performance, stating, "We delivered a very strong second quarter. In Q2, our comp came in at 6.2%, with total revenue growth of 6.7%, and we drove an operating margin of 17.3% with earnings per share of $2.10."
For fiscal 2026, Williams-Sonoma raised its annual net revenue growth guidance to a range of 4.7% to 7.2%, with a midpoint of 5.95%. Comparable sales growth is projected between 4.0% and 6.5%, while adjusted operating margin is expected to land between 17.8% and 18.2%.
The company’s outlook assumes current tariffs—including Section 232, existing and new Section 301 tariffs, and U.S.-Canada trade duties—will remain in place through fiscal 2026. Williams-Sonoma also expects elevated oil prices to persist through year-end.
