Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Williams-Sonoma's fiscal 2026 second quarter was defined by the recognition of a $167.8 million IEEPA tariff refund, which reduced cost of goods sold and lifted reported profitability. Management attributed the quarter's revenue growth to company comparable brand revenue up 6.2%, with both e-commerce and retail channels posting positive comps. The tension in the quarter is that the tariff refund masked a 230 basis point decline in underlying merchandise margins, as tariff costs continued to flow through cost of goods sold. While top-line momentum remained solid, the sustainability of reported margin gains depends on the non-recurring refund and future tariff policy.
Revenue
$1.96B
+6.70% YoY
EPS (Diluted)
$2.84
+42.00% YoY
Gross Margin
51.6%
+4.6 pts YoY
Operating Income
$448.8M
+36.80% YoY
Source: SEC XBRL
Williams Sonoma (WSM) reported Q2 FY2026 revenue of $1.96B, up 6.7% year over year. Operating margin was 22.9%, up 5.0 points from 17.9% a year earlier. WSM's fiscal Q2 FY2026 corresponds to calendar Q3 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Sep 2026 | 2.10 | 2.10 | Beat +0.1% |
| Jun 2026 | 1.93 | 1.83 | Beat +5.7% |
| Mar 2026 | 3.04 | 2.92 | Beat +3.9% |
| Dec 2025 | 1.96 | 1.89 | Beat +3.9% |
5 reported segments · SEC XBRL
Segment revenue totals $1.96B, which is the $1.96B of consolidated revenue on the income statement.
Compiled by AI from 10-Q Item 2 of this filing
The company recorded a $167.8 million reduction of cost of goods sold and $6.3 million of interest income from IEEPA tariff refunds, partially offset by $47.5 million in vendor reimbursements and a $10.0 million employee recognition contribution; it collected $200.2 million in cash refunds, with a remaining receivable of $3.2 million.
Source: 10-Q Item 2 MD&A
Company comparable brand revenue grew 6.2%, with e-commerce comp up 6.5% and retail comp up 5.5%; Pottery Barn comp was 5.1%, West Elm 6.4%, Williams Sonoma 7.6%, and Pottery Barn Kids and Teen 3.5%.
Source: 10-Q Item 2 MD&A
Gross margin expanded 450 basis points to 51.6%, driven by IEEPA tariff refunds net of vendor reimbursements contributing 610 basis points, occupancy leverage of 40 basis points, and supply chain efficiencies of 30 basis points, partially offset by a 230 basis point decline in merchandise margins from tariff flow-through.
Source: 10-Q Item 2 MD&A
SG&A as a percentage of net revenues decreased 50 basis points to 28.7%, with employment expense leverage contributing 70 basis points, partially offset by higher general and advertising expenses.
Source: 10-Q Item 2 MD&A
First-half operating cash flow was $695.9 million, including $200.2 million of tariff refund collections; the company had no outstanding borrowings under its revolving credit facility, invested $116.4 million in capital expenditures, and returned $463.2 million through stock repurchases and dividends.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 1 high, 4 medium, 0 low
Reported gross margin rose to 51.6% from 47.1% and operating cash flow increased 73.2% year-to-date, but a meaningful portion of this improvement appears tied to the collection of tariff refunds rather than underlying operations. If such refunds do not recur, margins and cash flow may normalize lower.
Source: 10-Q Income Statement (XBRL)
Total liabilities increased 9.3% year over year to $3.37 billion while stockholders' equity declined 0.4% to $2.14 billion, pushing debt-to-equity to 1.57. This leverage could reduce financial flexibility if earnings weaken.
Source: 10-Q Balance Sheet (XBRL)
Financing cash outflows were $570.0 million year-to-date, including $287.8 million of share repurchases, while the business is subject to substantial seasonal variations and typically requires peak inventory and staffing investment later in the year.
Source: 10-Q Statement of Cash Flows (XBRL)
Cost of revenue declined 2.5% despite revenue growth of 6.7%, but SG&A rose 5.0%; underlying merchandise margins may remain under pressure if tariffs continue to flow through, as current ratio of 1.45 suggests limited near-term cushion.
Source: 10-Q Income Statement (XBRL)
Pottery Barn accounted for 39.3% of segment revenue in Q2 FY2026, making consolidated results sensitive to that brand's performance; any slowdown in home furnishings demand could disproportionately affect revenue.
Source: 10-Q Segment Data (XBRL)
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 1.96 $B | 1.84 $B | +6.70% |
Cost of Revenue $M | 947.81 $M | 972.14 $M | -2.50% |
Gross Profit $B | 1.01 $B | 0.86 $B | +17.04% |
Operating Income $M | 448.80 $M | 328.06 $M | +36.80% |
Net Income $M | 338.11 $M | 247.56 $M | +36.58% |
EPS (Basic) $ | 2.87 $ | 2.03 $ | +41.38% |
EPS (Diluted) $ | 2.84 $ | 2.00 $ | +42.00% |
SG&A Expense $M | 563.15 $M | 536.56 $M | +4.96% |
Answers draw on this SEC filing and the data on this page
WSM delivered 4.4% revenue growth to $1.805B and 4.3% diluted EPS growth to $1.93 in Q1 FY2026, but tariff-driven gross-margin pressure and heavier capital returns reduced cash balances and equity. Source: 10-Q Item 2 MD&A, pp.14-17.
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.