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

Williams-Sonoma, Inc. announces strong second quarter 2026 results SAN FRANCISCO--( BUSINESS WIRE)--Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the second quarter ended August 2, 2026 versus the second quarter ended August 3, 2025.

“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. Every brand delivered again in the quarter, driven by strong execution across our brands, our channels, and our team,” said Laura Alber, President and Chief Executive Officer.

Alber concluded, “Our strategies continue to gain momentum, and our results reflect the power of our execution. We gained market share, continued to outperform the industry, and raised our annual outlook on both the top and bottom lines. We are delivering compounding results despite the housing market and other macroeconomic events, and we remain confident in our priorities and plans for the remainder of 2026 and beyond.”

SECOND QUARTER 2026 HIGHLIGHTS

TARIFF REFUND

During the second quarter of fiscal 2026, we recognized income from the refund of previously paid International Emergency Economic Powers Act (“IEEPA”) tariffs. During the quarter, we recorded (i) a reduction of cost of goods sold of $167.8 million related to refunds received for tariffs that have been previously expensed and (ii) related interest income of $6.3 million. This income was partially offset by (i) a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions and (ii) a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees. As of August 2, 2026, we deferred $29.3 million of the tariff refund income as a reduction of merchandise inventories, which we anticipate recognizing as a reduction to cost of goods sold in the third quarter of fiscal 2026. Substantially all of our initial refund claim of $197.8 million has been collected as of August 2, 2026, with a remaining tariff refund receivable of $3.2 million. We have adjusted all of these tariff-related items as non-GAAP adjustments. See Exhibit 1 for our GAAP to non-GAAP reconciliation.

OUTLOOK

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, August 26, 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 include non-GAAP financial measures. Exhibit 1 provides reconciliations of these non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We have not provided a reconciliation of non-GAAP measures to the most directly comparable 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, early termination charges and other non-recurring or non-operational income or expenses. 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, trade policies and regulations; our ability to mitigate current and future tariffs; 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; 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; effective inventory management; timely and effective sourcing and delivery of merchandise from our 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 brands, products, retail 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; our ability to control employment, advertising, occupancy, and other operating costs; payment of dividends; 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 August 2, 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

For the Twenty-six Weeks Ended

August 2, 2026

August 3, 2025

August 2, 2026

August 3, 2025

(In thousands, except per share amounts)

% of Net

revenues

% of Net

revenues

% of Net

revenues

% of Net

revenues

Net revenues

1,959,757

100.0

1,836,760

100.0

3,765,213

100.0

3,566,873

100.0

Cost of goods sold

947,809

48.4

972,137

52.9

1,959,839

52.1

1,936,441

54.3

Gross profit

1,011,948

51.6

864,623

47.1

1,805,374

47.9

1,630,432

45.7

Selling, general and administrative expenses

563,153

28.7

536,564

29.2

1,064,891

28.3

1,011,660

28.4

Operating income

448,795

22.9

328,059

17.9

740,483

19.7

618,772

17.3

Interest income, net

12,412

0.6

9,080

0.5

19,319

0.5

18,613

0.5

Earnings before income taxes

461,207

23.5

337,139

18.4

759,802

20.2

637,385

17.9

Income taxes

123,098

6.3

89,577

4.9

190,331

5.1

158,560

4.4

Net earnings

338,109

17.3

247,562

13.5

569,471

15.1

478,825

13.4

Earnings per share (EPS):

Basic

2.87

2.03

4.82

3.91

Diluted

2.84

2.00

4.77

3.86

Shares used in calculation of EPS:

Basic

117,765

122,121

118,075

122,614

Diluted

118,892

123,595

119,375

124,163

2nd Quarter Net Revenues and Comparable Brand Revenue Growth 1

Net revenues

Comparable brand revenue

growth

(In thousands, except percentages)

Q2 26

Q2 25

Q2 26

Q2 25

Pottery Barn

770,808

724,579

5.1

1.1

West Elm

496,251

468,550

6.4

3.3

Williams Sonoma 2

268,828

249,053

7.6

5.1

Pottery Barn Kids and Teen

297,438

286,749

3.5

5.3

Other 3

126,432

107,829

N/A

Total 4

1,959,757

1,836,760

6.2

3.7

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)

August 2,

2026

February 1,

2026

August 3,

2025

Assets

Current assets

Cash and cash equivalents

1,028,936

1,019,801

985,823

Accounts receivable, net

146,219

126,821

115,509

Merchandise inventories, net

1,447,423

1,462,849

1,433,605

Prepaid expenses

105,583

80,053

100,622

Other current assets

18,385

23,663

19,961

Total current assets

2,746,546

2,713,187

2,655,520

Property and equipment, net

1,121,677

1,095,158

1,029,526

Operating lease right-of-use assets

1,322,644

1,270,272

1,221,792

Deferred income taxes, net

74,433

99,161

95,797

Goodwill

77,369

77,398

77,374

Other long-term assets, net

163,637

156,736

148,359

Total assets

5,506,306

5,411,912

5,228,368

Liabilities and stockholders' equity

Current liabilities

Accounts payable

703,822

637,985

601,661

Accrued expenses

207,857

314,588

202,914

Gift card and other deferred revenue

618,926

602,940

578,192

Income taxes payable

62,098

78,943

74,329

Operating lease liabilities

217,032

221,356

222,572

Other current liabilities

88,843

98,318

86,641

Total current liabilities

1,898,578

1,954,130

1,766,309

Long-term operating lease liabilities

1,310,914

1,235,549

1,171,675

Other long-term liabilities

155,900

139,674

140,688

Total liabilities

3,365,392

3,329,353

3,078,672

Stockholders' equity

Preferred stock: $0.01 par value; 7,500 shares authorized, none issued

—

Common stock: $0.01 par value; 253,125 shares authorized; 117,779, 118,770, and 121,790 shares issued and outstanding at August 2, 2026, February 1, 2026 and August 3, 2025, respectively

1,178

1,188

1,219

Additional paid-in capital

543,931

587,433

544,244

Retained earnings

1,611,605

1,509,129

1,622,191

Accumulated other comprehensive loss

(14,142

)

(13,176

)

(15,943

)

Treasury stock, at cost

(1,658

)

(2,015

)

(2,015

)

Total stockholders' equity

2,140,914

2,082,559

2,149,696

Total liabilities and stockholders' equity

5,506,306

5,411,912

5,228,368

Retail Store Data

(unaudited)

Beginning of quarter

May 3, 2026

End of quarter

August 2, 2026

As of

August 3, 2025

Openings

Closings

Pottery Barn

180

)

181

Williams Sonoma

153

—

153

154

West Elm

116

—

117

119

Pottery Barn Kids

—

Rejuvenation

—

GreenRow

—

Total

506

)

508

509

Condensed Consolidated Statements of Cash Flows (unaudited)

For the Twenty-six Weeks Ended

(In thousands)

August 2, 2026

August 3, 2025

Cash flows from operating activities:

Net earnings

569,471

478,825

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

Depreciation and amortization

112,683

113,165

Loss on disposal/impairment of assets

1,108

3,599

Non-cash lease expense

127,380

121,936

Deferred income taxes

12,884

14,658

Tax benefit related to stock-based awards

11,650

11,423

Stock-based compensation expense

61,530

46,974

Other

(898

)

(1,275

)

Changes in:

Accounts receivable

(19,495

)

2,411

Merchandise inventories

15,000

(98,562

)

Prepaid expenses and other assets

(27,704

)

(37,959

)

Accounts payable

49,314

(48,962

)

Accrued expenses and other liabilities

(89,166

)

(78,142

)

Gift card and other deferred revenue

16,197

(7,069

)

Operating lease liabilities

(127,247

)

(125,977

)

Income taxes payable

(16,845

)

6,633

Net cash provided by operating activities

695,862

401,678

Cash flows from investing activities:

Purchases of property and equipment

(116,434

)

(110,293

)

Other

(1,195

)

Net cash used in investing activities

(116,372

)

(111,488

)

Cash flows from financing activities:

Repurchases of common stock

(287,805

)

(289,108

)

Payment of dividends

(175,444

)

(155,994

)

Tax withholdings related to stock-based awards

(99,095

)

(67,903

)

Debt issuance costs

—

(1,187

)

Other

(7,658

)

(6,941

)

Net cash used in financing activities

(570,002

)

(521,133

)

Effect of exchange rates on cash and cash equivalents

(353

)

3,789

Net increase (decrease) in cash and cash equivalents

9,135

(227,154

)

Cash and cash equivalents at beginning of period

1,019,801

1,212,977

Cash and cash equivalents at end of period

1,028,936

985,823

Exhibit 1

2nd Quarter GAAP to Non-GAAP Reconciliation

(unaudited)

For the Thirteen Weeks Ended

For the Twenty-six Weeks Ended

August 2, 2026

August 3, 2025

August 2, 2026

August 3, 2025

(In thousands, except per share data)

% of Net

revenues

% of Net

revenues

% of Net revenues

Gross profit

1,011,948

51.6

864,623

47.1

1,805,374

47.9

1,630,432

45.7

Tariff refund income 1

(167,778

)

—

(167,778

)

—

Tariff refund-related vendor concessions 2

47,464

—

47,464

—

Non-GAAP gross profit

891,634

45.5

864,623

47.1

1,685,060

44.8

1,630,432

45.7

Selling, general and administrative expenses

563,153

28.7

536,564

29.2

1,064,891

28.3

1,011,660

28.4

Tariff refund-related employee recognition 3

(10,000

)

—

(10,000

)

—

Non-GAAP selling, general and administrative expenses

553,153

28.2

536,564

29.2

1,054,891

28.0

1,011,660

28.4

Operating income

448,795

22.9

328,059

17.9

740,483

19.7

618,772

17.3

Tariff refund income 1

(167,778

)

—

(167,778

)

—

Tariff refund-related vendor concessions 2

47,464

—

47,464

—

Tariff refund-related employee recognition 3

10,000

—

10,000

—

Non-GAAP operating income

338,481

17.3

328,059

17.9

630,169

16.7

618,772

17.3

Interest income, net

12,412

0.6

9,080

0.5

19,319

0.5

18,613

0.5

Interest income on tariff refund 4

(6,346

)

—

(6,346

)

—

Non-GAAP interest income, net

6,066

0.3

9,080

0.5

12,973

0.3

18,613

0.5

Earnings before income taxes

461,207

23.5

337,139

18.4

759,802

20.2

637,385

17.9

Tariff refund income 1

(167,778

)

—

(167,778

)

—

Tariff refund-related vendor concessions 2

47,464

—

47,464

—

Tariff refund-related employee recognition 3

10,000

—

10,000

—

Interest income on tariff refund 4

(6,346

)

—

(6,346

)

—

Non-GAAP earnings before income taxes

344,547

17.6

337,139

18.4

643,142

17.1

637,385

17.9

Tax rate

Income taxes

123,098

26.7

89,577

26.6

190,331

25.1

158,560

24.9

Tariff refund income 1

(41,428

)

—

(41,428

)

—

Tariff refund-related vendor concessions 2

11,720

—

11,720

—

Tariff refund-related employee recognition 3

2,469

—

2,469

—

Interest income on tariff refund 4

(1,567

)

—

(1,567

)

—

Non-GAAP income taxes

94,292

27.4

89,577

26.6

161,525

25.1

158,560

24.9

Diluted EPS

2.84

2.00

4.77

3.86

Tariff refund income 1

(1.06

)

—

(1.06

)

—

Tariff refund-related vendor concessions 2

0.30

—

0.30

—

Tariff refund-related employee recognition 3

0.06

—

0.06

—

Interest income on tariff refund 4

(0.04

)

—

(0.04

)

—

Non-GAAP diluted EPS 5

2.10

2.00

4.03

3.86

1 During Q2 2026, we recognized a reduction to cost of goods sold of $167.8 million related to a refund of IEEPA tariffs.

2 During Q2 2026, we recorded a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions.

3 During Q2 2026, we recorded a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees.

4 During Q2 2026, we recognized interest income of $6.3 million related to interest received on IEEPA tariff refunds.

5 Per share amounts may not sum due to rounding to the nearest cent per diluted share.

SEC Regulation G – Non-GAAP Information

These tables include non-GAAP gross profit, gross margin, selling, general and administrative expense, operating income, operating margin, interest income, earnings before income taxes, income taxes, effective tax rate and diluted EPS. We believe that these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of our quarterly actual results 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. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.