Williams-Sonoma’s second quarter was marked by a mixed market reaction despite the company meeting Wall Street’s revenue expectations and reporting higher-than-expected non-GAAP earnings. Management attributed the quarter’s performance to broad-based comparable sales growth across all brands and categories, driven by product “newness” in furniture and non-furniture, as well as strong showings in both retail and e-commerce channels. CEO Laura Alber emphasized that these gains occurred despite a challenging housing market and ongoing geopolitical volatility, with customer response to new assortments and collaborations contributing significantly to momentum. Notably, Alber cautioned that “no material improvement in the housing market” was seen, and the company’s outperformance relative to industry peers was grounded in operational execution and product development.
Is now the time to buy WSM? Find out in our full research report (it’s free).
Williams-Sonoma (WSM) Q2 CY2025 Highlights:
- Revenue: $1.84 billion vs analyst estimates of $1.83 billion (2.7% year-on-year growth, in line)
- Adjusted EPS: $2 vs analyst estimates of $1.81 (10.3% beat)
- Adjusted EBITDA: $384.8 million vs analyst estimates of $350.9 million (21% margin, 9.7% beat)
- Operating Margin: 17.9%, up from 15.5% in the same quarter last year
- Locations: 509 at quarter end, down from 521 in the same quarter last year
- Same-Store Sales rose 3.7% year on year (-3.3% in the same quarter last year)
- Market Capitalization: $23.38 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Williams-Sonoma’s Q2 Earnings Call
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Oliver Wintermantel (Evercore): Asked about the key contributors to comp outperformance. CFO Jeff Howie responded that positive comps were broad-based, citing innovation and momentum across all brands, furniture, and non-furniture segments, as well as B2B and emerging brands.
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Jonathan Matuszewski (Jefferies): Inquired about pricing strategy in the back half of the year. CEO Laura Alber explained the company is taking selective price increases where justified, emphasizing the importance of maintaining value and competitiveness while responding to tariff pressures.
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Peter Benedict (Baird): Sought clarity on product sourcing and the expansion of U.S. manufacturing in response to tariffs. Alber detailed the company’s flexible sourcing strategy and highlighted existing U.S. manufacturing capabilities, particularly in upholstery and Rejuvenation’s Portland facility.
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Seth Sigman (Barclays): Questioned how higher tariff costs will phase into margins and whether mitigation will improve next year. Howie replied that tariff impacts will build gradually through the year and that mitigation efforts are ongoing, but future volatility is a risk.
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Simeon Gutman (Morgan Stanley): Asked about demand elasticity and vendor sharing of tariff costs. Alber stated that careful pricing and innovation underpin confidence in guidance, while vendor partnerships are helping to share tariff burdens without eroding the customer value proposition.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will watch closely for (1) the effectiveness of tariff mitigation and whether operating margins can be maintained despite rising costs, (2) evidence that AI-powered customer service and supply chain initiatives are translating into sustained efficiency gains, and (3) continued growth momentum in emerging brands and B2B channels. Progress on expanding U.S. manufacturing and successful new product launches will be additional markers of execution.
Williams-Sonoma currently trades at $191.00, down from $197.67 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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