AI Takeaway
WSM delivered modest FY2025 revenue growth of +1.2% to $7.81B, but net income declined 3.3% to $1.09B as higher costs and SG&A pressures compressed margins, while the company returned over $850M to shareholders via buybacks.
Revenue
$7.81B
++1.24% YoY
EPS (Basic)
$8.96
++0.56% YoY
Gross Margin
46.2%
-0.30% YoY
Operating Income
$1.42B
-1.01% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue grew +1.2% year-over-year to $7.81B in FY2025, up from $7.71B in the prior year, indicating a stabilizing top line in a challenging home furnishings environment.
Source: Source: 10-K Income Statement
Gross margin declined slightly to 46.15% from 46.45%, while operating margin fell to 18.13% from 18.55%, driven by cost of revenue rising +1.8% and SG&A increasing +1.6% to $2.19B — both outpacing revenue growth.
Source: Source: 10-K Income Statement & Key Ratios
Net income fell 3.3% to $1.09B, yet diluted EPS held nearly flat at $8.84 vs. $8.79 prior year (+0.6%), reflecting the benefit of ongoing share repurchases reducing the share count.
Source: Source: 10-K Income Statement
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Upgrade to unlockCost of revenue grew 1.8% and SG&A rose 1.6%, both outpacing revenue growth of 1.2%, leading to gross and operating margin compression. If cost pressures persist — particularly in supply chain, labor, or occupancy — profitability could erode further.
Source: Source: 10-K Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlock| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $7.81B | $7.71B | +1.24% |
Cost of Revenue | $4.2B | $4.13B | +1.80% |
Gross Profit | $3.6B | $3.58B | +0.58% |
Operating Income | $1.42B | $1.43B | -1.01% |
Net Income | $1.09B | $1.13B | -3.25% |
EPS (Basic) | $8.96 | $8.91 | +0.56% |
EPS (Diluted) | $8.84 | $8.79 | +0.57% |
SG&A Expense | $2.19B | $2.15B | +1.64% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $5.41B | $5.3B | +2.08% |
Current Assets | $2.71B | $2.75B | -1.50% |
Total Liabilities | $3.33B | $3.16B | +5.39% |
Current Liabilities | $1.95B | $1.91B | +2.20% |
Stockholders' Equity | $2.08B | $2.14B | -2.79% |
Cash & Equivalents | $1.02B | $1.21B | -15.93% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.31B | $1.36B | -3.33% |
Investing Cash Flow | $-260.58M | $-221.21M | -17.80% |
Financing Cash Flow | $-1.25B | $-1.18B | -5.75% |
Share Buybacks | $853.96M | $807.48M | +5.76% |
D&A | $231.45M | $229.8M | +0.72% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 46.2% | 46.5% | -0.30% |
Operating Margin | 18.1% | 18.5% | -0.41% |
Net Margin | 13.9% | — | — |
ROE | 52.3% | — | — |
ROA | 20.1% | — | — |
Current Ratio | $1.388 | — | — |
Debt to Equity | $1.599 | — | — |
WSM reported FY2025 revenue of $7.81B, up 1.2% year-over-year, but net income declined 3.3% to $1.09B due to rising costs. Diluted EPS was nearly flat at $8.84 vs. $8.79 in the prior year, supported by $854M in share repurchases.
Margins declined modestly in FY2025: gross margin fell to 46.15% from 46.45%, and operating margin dropped to 18.13% from 18.55%. Both cost of revenue (+1.8%) and SG&A (+1.6%) grew faster than revenue (+1.2%), creating the compression.
WSM repurchased $854M in shares during FY2025, up 5.8% from $807M in the prior year. This aggressive buyback program helped keep diluted EPS nearly flat despite a 3.3% decline in net income.
WSM maintains solid financial health with $1.02B in cash, a current ratio of 1.39, and operating cash flow of $1.31B. However, cash declined 15.9% year-over-year and the debt-to-equity ratio rose to 1.60, reflecting increased leverage from buybacks and rising liabilities.
The key risks include continued margin pressure from costs growing faster than revenue, a 15.9% decline in cash reserves driven by heavy buybacks, and exposure to discretionary consumer spending in a soft housing market. Rising liabilities pushed the debt-to-equity ratio to 1.60, increasing financial leverage risk.