Williams-Sonoma Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.64%.
Did WSM Beat Earnings? Q2 2025 Results
Williams-Sonoma delivered a notably strong second quarter of fiscal 2025, with results that exceeded Wall Street expectations on both the top and bottom lines. GAAP diluted EPS came in at $2.00, beating the $1.81 consensus by 10.49%, while net revenues of $1.84 billion edged past estimates by 0.48% and grew 2.7% year over year. The headline driver behind the beat was meaningful margin expansion, with gross margin widening 220 basis points to 47.1% on stronger merchandise margins and supply chain efficiencies, lifting operating margin to 17.9%. Comparable brand revenue rose 3.7%, with all four brands posting positive comps, including a notable turnaround at West Elm, which swung from a -4.8% comp a year ago to positive territory. The company returned $280 million to shareholders in the quarter through buybacks and dividends. Looking ahead, management raised its fiscal 2025 net revenue growth guidance to a range of +0.5% to +3.5%, with comparable brand revenue growth of +2.0% to +5.0%, while reiterating its operating margin outlook of 17.4% to 17.8%.
- Comparable brand revenue growth of +3.7% with all brands running positive comps
- Higher merchandise margins expanding +190bps year over year
- Supply chain efficiencies contributing +30bps to gross margin
- Positive comps in both furniture and non-furniture categories
- Strong performance in both retail and ecommerce channels
- Lower advertising and general expenses driving SG&A leverage
“We are proud to deliver strong results in the second quarter of 2025, driving a comp of +3.7% with all brands again running positive comps. Additionally, we exceeded profitability estimates with an operating margin of 17.9% and earnings per share of $2.00 with earnings growth of nearly +20%. This growing outperformance was driven by positive comps in both furniture and non-furniture, and strong performance in our retail and ecommerce channels; and has allowed us to raise our guidance on the top-line and reiterate our guidance on the bottom-line, despite continued macroeconomic uncertainty and the tariff environment.”
Williams Sonoma CEO, on the earnings call
Forward Guidance & Outlook
Williams-Sonoma raised its fiscal 2025 net revenue guidance, now expecting annual net revenue growth of +0.5% to +3.5% (inclusive of the 53rd-week impact from fiscal 2024), with comparable brand revenue growth of +2.0% to +5.0%. Operating margin guidance was reiterated at 17.4% to 17.8% (with 20bps contributed by the 53rd week in fiscal 2024). The company expects incremental flow-through from higher revenues to be pressured by tariff costs including China 30%, India 50%, Vietnam 20%, rest of world average 18%, steel/aluminum 50%, and copper 50%. Annual interest income is expected to be approximately $30 million with an effective tax rate of approximately 26.5%. Long-term, management continues to expect mid-to-high single-digit annual net revenue growth with mid-to-high teens operating margins.
WSM YoY Financials
WSM Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.