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Williams-Sonoma
(NYSE:WSM)
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Rating:79Outperform
Price Target:
$286.00
▲(21.84% Upside)
Action:Reiterated
Date:10/19/26
WSM scores well primarily on high-quality financials (strong margins and free-cash-flow generation) and a constructive technical backdrop (price above key moving averages with positive MACD). The score is moderated by a less compelling valuation (P/E 25.27 with only modest recent revenue growth) and acknowledged near-term margin risks from tariffs and cost pressures despite raised operating guidance.
Positive Factors
Strong profitability and cash generation
Williams-Sonoma combines strong margins with substantial operating and free cash flow, indicating effective merchandising and earnings quality. This financial capacity can support technology investment, brand development, dividends, and buybacks while providing resilience through normal retail cycles.
Negative Factors
Tariff-driven merchandise margin pressure
Tariff-related cost inflation is directly compressing merchandise margins, and management expects pressure to persist into the back half despite Q2 being the peak impact. If costs cannot be fully passed through, sustained margin dilution could reduce the benefit of revenue growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cash generation
Williams-Sonoma combines strong margins with substantial operating and free cash flow, indicating effective merchandising and earnings quality. This financial capacity can support technology investment, brand development, dividends, and buybacks while providing resilience through normal retail cycles.
Read all positive factors
Williams-Sonoma Key Performance Indicators (KPIs)
Any
Net Revenue by Segment
Breaks down sales by business line or channel (brands, retail vs. digital, wholesale). Reveals which parts of the business drive growth and margins, highlights concentration risk, and shows whether e-commerce gains are offsetting brick-and-mortar strength or weakness.
Breaks down sales by business line or channel (brands, retail vs. digital, wholesale). Reveals which parts of the business drive growth and margins, highlights concentration risk, and shows whether e-commerce gains are offsetting brick-and-mortar strength or weakness.
Data provided by:
The Fly
The FlyWilliams-Sonoma (WSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$29.74B
Dividend Yield1.16%
Average Volume (3M)1.17M
Price to Earnings (P/E)25.5
Beta (1Y)1.30
Revenue Growth2.24%
EPS Growth7.35%
CountryUS
Employees19,800
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)9.90
Shares Outstanding117,779,175
10 Day Avg. Volume1,182,257
30 Day Avg. Volume1,170,918
Financial Highlights & Ratios
PEG Ratio42.57
Price to Book (P/B)12.48
Price to Sales (P/S)3.33
P/FCF Ratio24.63
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue3.46
Enterprise Value/Gross Profit7.33
Enterprise Value/Ebitda14.00
Forecast
1Y Price Target
$256.38Price Target Upside9.22% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)9.51
Revenue Forecast (FY)$8.27B
Williams-Sonoma Business Overview & Revenue Model
Company Description
Williams-Sonoma, Inc. (WSM) functions as a specialized, multi-channel retailer offering a diverse array of products for the home. Its flagship Williams Sonoma brand is renowned for cooking, dining, and entertaining essentials, such as cookware, cu...
How the Company Makes Money
Williams-Sonoma makes money primarily by selling home-related merchandise through its portfolio of retail brands across digital and physical channels. The core revenue stream is product sales to consumers (direct-to-consumer) via brand websites an...
Williams-Sonoma Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call conveyed broad operational momentum: top-line acceleration, market share gains, strong channel execution, double-digit growth in B2B and emerging brands, improved inventory discipline, and meaningful early AI-driven ecommerce results. Management raised full-year operational guidance (non-GAAP) and demonstrated the ability to grow operating income and EPS through peak tariff pressure. Key near-term challenges include tariff-driven merchandise margin pressure (Q2 peak but lingering), higher fuel/transportation costs, a Q4 anniversary of prior-year shrink benefits that will offset some gains, and general macro/tariff uncertainty. The sizable one-time tariff refunds improved GAAP results but are excluded from non-GAAP guidance, so underlying operational strength is a primary driver of the positive outlook.Positive Updates
Top-line Acceleration and Market Share Gains
Q2 comparable brand revenue (comp) accelerated to 6.2% and total net revenues were $1.96 billion, up 6.7% year-over-year. Management noted the home-furnishings industry was essentially flat in Q2, indicating the growth represented market share gains.
Negative Updates
Gross Margin Pressure from Tariffs
Q2 gross margin was 45.5%, down ~160 basis points YoY. Merchandise margins declined ~230 basis points year-over-year driven by tariff-related increases to weighted-average cost of goods sold; Q2 was described as the peak tariff impact but pressure remains in the back half.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line Acceleration and Market Share Gains
Q2 comparable brand revenue (comp) accelerated to 6.2% and total net revenues were $1.96 billion, up 6.7% year-over-year. Management noted the home-furnishings industry was essentially flat in Q2, indicating the growth represented market share gains.
Read all positive updates
Company Guidance
Williams‑Sonoma raised its fiscal 2026 outlook, now guiding comparable brand revenue growth of 4.0%–6.5% (total net revenue growth 4.7%–7.2%) and an operating margin of 17.8%–18.2% (both ends of the ranges were increased); the guidance is non‑GAAP (excludes the ~$200M AIPA tariff refunds) and assumes all tariffs in place as of the call, current fuel prices, and no material changes in the macro/housing/interest‑rate environment. Below‑operating line and capital assumptions include approximately $25M of full‑year interest income, a ~26% effective tax rate, and unchanged capital expenditures of about $275M (≈95% to retail/e‑commerce/supply chain); year‑end store count is expected to be essentially flat with 1%–3% annual unit growth beginning in FY27 and about 70 basis points of non‑comp revenue contribution from retail investment. The company will continue a $0.76 quarterly dividend (15% increase) and opportunistic share repurchases with roughly $1.1B of authorization remaining.Williams-Sonoma Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
74
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.01B | 7.81B | 7.71B | 7.75B | 8.67B | 8.25B |
| Gross Profit | 3.78B | 3.60B | 3.58B | 3.30B | 3.68B | 3.63B |
| EBITDA | 1.98B | 1.68B | 1.72B | 1.51B | 1.71B | 1.65B |
| Net Income | 1.18B | 1.09B | 1.13B | 949.76M | 1.13B | 1.13B |
Balance Sheet | ||||||
| Total Assets | 5.51B | 5.41B | 5.30B | 5.27B | 4.66B | 4.63B |
| Cash, Cash Equivalents and Short-Term Investments | 1.03B | 1.02B | 1.21B | 1.26B | 367.34M | 850.34M |
| Total Debt | 1.53B | 1.46B | 1.35B | 1.39B | 1.44B | 1.28B |
| Total Liabilities | 3.37B | 3.33B | 3.16B | 3.15B | 2.96B | 2.96B |
| Stockholders Equity | 2.14B | 2.08B | 2.14B | 2.13B | 1.70B | 1.66B |
Cash Flow | ||||||
| Free Cash Flow | 1.35B | 1.06B | 1.14B | 1.49B | 698.71M | 1.14B |
| Operating Cash Flow | 1.61B | 1.31B | 1.36B | 1.68B | 1.05B | 1.37B |
| Investing Cash Flow | -265.46M | -260.58M | -221.21M | -188.26M | -353.95M | -226.25M |
| Financing Cash Flow | -1.30B | -1.25B | -1.18B | -598.31M | -1.18B | -1.49B |
Williams-Sonoma Technical Analysis
Positive
234.74
Price Trends
234.60
Positive
230.79
Positive
211.87
Positive
Market Momentum
6.53
Negative
61.58
Neutral
81.37
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Positive. The current price of 234.74 is below the 20-day moving average (MA) of 242.01, above the 50-day MA of 234.60, and above the 200-day MA of 211.87, indicating a bullish trend. The MACD of 6.53 indicates Negative momentum. The RSI at 61.58 is Neutral, neither overbought nor oversold. The STOCH value of 81.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSM.
Williams-Sonoma Risk Analysis
Williams-Sonoma disclosed 41 risk factors in its most recent earnings report. Williams-Sonoma reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Williams-Sonoma Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $29.74B | 25.51 | 57.79% | 1.16% | 2.24% | 7.35% | |
73 Outperform | $2.68T | 19.68 | 30.50% | ― | 15.77% | 88.63% | |
66 Neutral | $7.98B | 41.00 | -17.67% | ― | 0.73% | 44.07% | |
62 Neutral | $15.41B | -45.77 | 11.48% | ― | 7.46% | -2.70% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $2.60B | 23.25 | 184.91% | ― | 3.35% | 3.38% |
* Consumer Cyclical Sector Average
WSM
Williams-Sonoma
252.47
62.19
32.68%
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248.00
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137.43
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ETSY
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86.93
11.37
15.05%
Williams-Sonoma Corporate Events
Business Operations and StrategyExecutive/Board Changes
Williams-Sonoma Adds NYSE President Lynn Martin to Board
Positive
Oct 19, 2026
On October 16, 2026, Williams-Sonoma, Inc.’s Board of Directors appointed Lynn Martin, President of NYSE Group, to serve as a director effective October 19, 2026. Martin will receive standard non-employee director compensation on a pro-rated...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.