Williams-Sonoma, Inc. announces strong first quarter 2026 results

Williams-Sonoma, Inc. announces strong first quarter 2026 results May 21, 2026 Q1 comparable brand revenue +4.8% Q1 operating margin of 16.2%; diluted EPS of $1.93 Reiterates full-year outlook Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the first quarter ended May 3, 2026 versus the first quarter ended May 4, 2025. “We are off to a strong start in 2026. In Q1, our comp came in at 4.8%, and we delivered an operating margin of 16.2% with earnings per share of $1.93. Every brand delivered a positive comp in the quarter, driven by the strength of our portfolio, our channels, and our teams,” said Laura Alber, President and Chief Executive Officer. Alber concluded, “We continue to outperform on both the top and bottom lines. We are delivering compounding results year-after-year despite the cyclical swings of the housing market and other macroeconomic events. We believe our strong brands, our proven ability to execute our vision, and our relentless focus on customer service will allow us to accomplish our goals in 2026 and beyond.” FIRST QUARTER 2026 HIGHLIGHTS Comparable brand revenue +4.8%.Gross margin of 44.0% -30bps to LY driven by (i) lower merchandise margins of -100bps, partially offset by (ii) supply chain efficiencies of +50bps and (iii) occupancy leverage of +20bps. Occupancy costs of $204 million, +3.0% to LY.SG&A rate of 27.8% +30bps to LY driven by (i) higher employment expense of +30bps and (ii) higher general expenses of +10bps, partially offset by (iii) advertising expense leverage of -10bps. SG&A of $502 million, +5.6% to LY.Operating income of $292 million with an operating margin of 16.2%. -60bps to LY.Diluted EPS of $1.93 per share. +4.3% to LY.Merchandise inventories +9.0% to the first quarter LY to $1.46 billion, including incremental tariff costs of approximately $60 million.Maintained strong liquidity position of $652 million in cash and $156 million in operating cash flow enabling the company to deliver returns to stockholders of $373 million through $288 million in stock repurchases and $85 million in dividends. OUTLOOK We are reiterating our fiscal 2026 and long-term guidance.In fiscal 2026, we expect annual net revenues in the range of +2.7% to +6.7%, with comps in the range of +2.0% to +6.0%; and an operating margin between 17.5% to 18.1%.Our guidance assumes (i) oil prices will remain elevated for fiscal 2026, (ii) no refund of tariffs paid, (iii) the impact of tariffs will be front-loaded in the first half of fiscal 2026 as the tariffs flow through our weighted average cost of goods sold, and (iv) all tariff rates currently in place remain for fiscal 2026, including the Section 232 tariffs, the current Section 301 tariffs and the Section 122 tariffs.For fiscal 2026, we expect annual interest income to be approximately $25 million and our effective tax rate to be approximately 25.5%.Over the long term, we continue to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens. CONFERENCE CALL AND WEBCAST INFORMATION Williams-Sonoma, Inc. will host a live conference call today, May 21, 2026, at 7:00 A.M. (PT). The call will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events. SEC REGULATION G — NON-GAAP INFORMATION This press release and our accompanying earnings call may include non-GAAP financial measures. We have not provided a reconciliation of non-GAAP measures to the most directly comparable U.S. generally accepted accounting principles (“GAAP”) measures on a forward-looking basis as we cannot do so without unreasonable efforts due to the potential variability and limited visibility of excluded items; these excluded items may include exit costs, reduction-in-force initiatives, impairment and early termination charges, among others. For the same reasons, we are unable to address the probable significance of any such excluded items. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to the GAAP financial measures presented in this press release and our financial statements and other publicly filed reports. Such non-GAAP measures may not be comparable to similarly titled measures used by other companies. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include, among other things, statements in the quotes of our President and Chief Executive Officer, our fiscal year 2026 outlook and long-term financial targets, and statements regarding our industry trends and business strategies. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: our ability to provide products that are designed and built for durability and longevity at competitive prices; changes in and the related impact of U.S. (federal, state and local) and international tax laws and trade policies and regulations; our ability to mitigate current and future tariffs and realize tariff refunds; factors, including but not limited to general economic conditions, inflationary pressures, consumer disposable income, rising fuel prices, recession and fears of recession, unemployment, war and fears of war, adverse weather, availability of consumer credit, conditions in the housing market, elevated interest rates, and consumer confidence in current and future economic conditions that can affect consumer spending; the plans, strategies, initiatives and objectives of management for future operations; our ability to execute strategic priorities and growth initiatives; our beliefs about our competitive advantages and areas of potential future growth in the market; the impact of periods of decreased home purchases; our ability to anticipate consumer preferences and buying trends overall and as they relate to specific brands; factors, including but not limited to fuel costs, labor disputes, union organizing activity, geopolitical instability, and acts of terrorism and war, that can affect the global supply chain, including our third-party providers; effective inventory management; timely and effective sourcing and delivery of merchandise from our foreign and domestic suppliers; our ability to respond to the growing use of and to adopt new technologies, including artificial intelligence; our belief in the reasonableness of the steps taken by us and our suppliers to protect the security and confidentiality of the information we collect; multi-channel and multi-brand complexities; our retail initiatives; our brands, products and related initiatives, including our ability to introduce new products, product lines, brands and brand extensions, and bring in new customers; challenges associated with our global presence and expansion efforts; disruptions in the financial markets; our ability to control employment, advertising, occupancy, and other operating costs; payment of dividends; the growth from our emerging brands; our ability to drive long-term sustainable returns; our capital allocation strategy in fiscal 2026; our planned use of cash in fiscal 2026; projections of earnings, revenues, growth and other financial items; and other risks and uncertainties described more fully in our public announcements, reports to stockholders and other documents filed with or furnished to the SEC, including our Annual Report on Form 10-K for the fiscal year ended February 1, 2026 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We have not filed our Form 10-Q for the quarter ended May 3, 2026. As a result, all financial results described here should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time we file the Form 10-Q. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements. ABOUT WILLIAMS-SONOMA, INC. Williams-Sonoma, Inc. is the world’s largest digital-first, design-led and sustainable home retailer. The company’s brands — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, GreenRow, and Dormify — represent distinct merchandise strategies that are marketed through e-commerce, direct-mail catalogs, retail stores, and business-to-business. These brands collectively support The Key Rewards, our loyalty and credit card program that offers members exclusive benefits. We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, and have unaffiliated franchisees that operate stores in Mexico, South Korea, India and the Philippines. WSM-IR Condensed Consolidated Statements of Earnings (unaudited) For the Thirteen Weeks Ended May 3, 2026 May 4, 2025 (In thousands, except per share amounts) $ % of Net Revenues $ % of Net Revenues Net revenues $ 1,805,456 100.0 % $ 1,730,113 100.0 % Cost of goods sold 1,012,030 56.1 964,304 55.7 Gross profit 793,426 44.0 765,809 44.3 Selling, general and administrative expenses 501,738 27.8 475,096 27.5 Operating income 291,688 16.2 290,713 16.8 Interest income, net 6,907 0.4 9,533 0.6 Earnings before income taxes 298,595 16.5 300,246 17.4 Income taxes 67,233 3.7 68,983 4.0 Net earnings $ 231,362 12.8 % $ 231,263 13.4 % Earnings per share (EPS): Basic $ 1.95 $ 1.88 Diluted $ 1.93 $ 1.85 Shares used in calculation of EPS: Basic 118,386 123,108 Diluted 119,894 124,789 1st Quarter Net Revenues and Comparable Brand Revenue Growth 1 Net Revenues Comparable Brand Revenue Growth (In thousands, except percentages) Q1 26 Q1 25 Q1 26 Q1 25 Pottery Barn $ 708,447 $ 695,092 1.0 % 2.0 % West Elm 471,174 437,085 8.5 0.2 Williams Sonoma 2 271,542 257,493 5.0 7.3 Pottery Barn Kids and Teen 240,149 229,716 4.5 3.8 Other 3 114,144 110,727 N/A N/A Total 4 $ 1,805,456 $ 1,730,113 4.8 % 3.4 % 1 See the Company’s 10-K for the definition of comparable brand revenue, which is calculated on a 13-week basis, and includes business-to-business revenues. 2 Includes Williams Sonoma Home net revenues. 3 Primarily consists of net revenues from Rejuvenation, Mark and Graham, our international franchise operations, GreenRow and Dormify. 4 Total comparable brand revenue growth includes Rejuvenation, Mark and Graham, and GreenRow. Condensed Consolidated Balance Sheets (unaudited) As of (In thousands, except per share amounts) May 3, 2026 February 1, 2026 May 4, 2025 Assets Current assets Cash and cash equivalents $ 651,601 $ 1,019,801 $ 1,047,181 Accounts receivable, net 139,347 126,821 122,773 Merchandise inventories, net 1,455,030 1,462,849 1,335,356 Prepaid expenses 80,035 80,053 69,442 Other current assets 19,699 23,663 22,570 Total current assets 2,345,712 2,713,187 2,597,322 Property and equipment, net 1,102,339 1,095,158 1,031,990 Operating lease right-of-use assets 1,295,745 1,270,272 1,198,440 Deferred income taxes, net 83,686 99,161 112,366 Goodwill 77,386 77,398 77,347 Other long-term assets, net 154,680 156,736 139,850 Total assets $ 5,059,548 $ 5,411,912 $ 5,157,315 Liabilities and stockholders' equity Current liabilities Accounts payable $ 560,674 $ 637,985 $ 553,655 Accrued expenses 151,462 314,588 146,692 Gift card and other deferred revenue 622,049 602,940 589,432 Income taxes payable 113,920 78,943 112,390 Operating lease liabilities 215,150 221,356 229,070 Other current liabilities 99,517 98,318 90,604 Total current liabilities 1,762,772 1,954,130 1,721,843 Long-term operating lease liabilities 1,278,414 1,235,549 1,139,745 Other long-term liabilities 148,558 139,674 134,451 Total liabilities 3,189,744 3,329,353 2,996,039 Stockholders' equity Preferred stock: $0.01 par value; 7,500 shares authorized, none issued — — — Common stock: $0.01 par value; 253,125 shares authorized; 117,743, 118,770, and 122,994 shares issued and outstanding at May 3, 2026, February 1, 2026 and May 4, 2025, respectively 1,178 1,188 1,231 Additional paid-in capital 517,774 587,433 524,405 Retained earnings 1,364,925 1,509,129 1,654,078 Accumulated other comprehensive loss (12,415 ) (13,176 ) (16,423 ) Treasury stock, at cost (1,658 ) (2,015 ) (2,015 ) Total stockholders' equity 1,869,804 2,082,559 2,161,276 Total liabilities and stockholders' equity $ 5,059,548 $ 5,411,912 $ 5,157,315 Retail Store Data (unaudited) Beginning of quarter End of quarter As of February 1, 2026 Openings Closings May 3, 2026 May 4, 2025 Pottery Barn 181 2 (3 ) 180 180 Williams Sonoma 152 1 — 153 154 West Elm 116 1 (1 ) 116 119 Pottery Barn Kids 44 — (1 ) 43 44 Rejuvenation 13 — — 13 11 GreenRow — 1 — 1 — Total 506 5 (5 ) 506 508 Condensed Consolidated Statements of Cash Flows (unaudited) For the Thirteen Weeks Ended (In thousands) May 3, 2026 May 4, 2025 Cash flows from operating activities: Net earnings $ 231,362 $ 231,263 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 56,116 56,404 Loss on disposal/impairment of assets 671 732 Non-cash lease expense 62,152 60,484 Deferred income taxes 3,912 (1,559 ) Tax benefit related to stock-based awards 11,755 10,647 Stock-based compensation expense 29,540 20,390 Other (456 ) (637 ) Changes in: Accounts receivable (12,491 ) (4,919 ) Merchandise inventories 8,598 (689 ) Prepaid expenses and other assets 5,801 (2,956 ) Accounts payable (82,408 ) (96,022 ) Accrued expenses and other liabilities (148,910 ) (139,206 ) Gift card and other deferred revenue 19,023 4,173 Operating lease liabilities (63,319 ) (63,850 ) Income taxes payable 34,977 44,694 Net cash provided by operating activities 156,323 118,949 Cash flows from investing activities: Purchases of property and equipment (57,685 ) (58,250 ) Other 10 21 Net cash used in investing activities (57,675 ) (58,229 ) Cash flows from financing activities: Repurchases of common stock (287,805 ) (89,971 ) Tax withholdings related to stock-based awards (93,596 ) (65,357 ) Payment of dividends (85,580 ) (74,667 ) Net cash used in financing activities (466,981 ) (229,995 ) Effect of exchange rates on cash and cash equivalents 133 3,479 Net decrease in cash and cash equivalents (368,200 ) (165,796 ) Cash and cash equivalents at beginning of period 1,019,801 1,212,977 Cash and cash equivalents at end of period $ 651,601 $ 1,047,181 Jeff Howie, EVP, Chief Financial Officer – (415) 402 4324 Jeremy Brooks, SVP, Chief Accounting Officer & Head of Investor Relations – (415) 733 2371 Source: Williams-Sonoma, Inc.