Williams-Sonoma (WSM) AI Stock Analysis

Williams-Sonoma

(BMV:WSM)

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Positive Factors

Strong profitability and cash generationWilliams-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 pressureTariff-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.

Williams-Sonoma (WSM) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 29.77B
Dividend Yield: 1.18%
Average Volume (3M): ―
Price to Earnings (P/E): 25.5
Beta (1Y): -0.11
Revenue Growth: -7.84%
EPS Growth: -3.57%
Country: Mexico
Employees: 19,800
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Specialty Retail

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, culin...

Williams-Sonoma Earnings Call Summary

Earnings Call Date:Aug 25, 2026(Q2-2026)|% Change Since:0.00%|Next Earnings Date:Nov 11, 2026

Earnings Call SentimentPositive

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.

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 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

MX:WSM against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMZN	74Outperform	$2.59T	19.17	26.71%	―	15.35%	73.92%
ETSY	67Neutral	$7.67B	8.29	-91.69%	―	0.69%	521.02%
W	62Neutral	$15.88B	-47.16	11.48%	―	7.46%	-2.70%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
RH	52Neutral	$2.78B	24.82	184.91%	―	3.35%	3.38%

* Consumer Cyclical Sector Average

Performance Comparison

MX:WSM and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:WSM	Williams-Sonoma	3800.00	432.95	12.86%
AMZN	Amazon.Com, Inc.	240.35	-13.65	-5.37%
RH	Rh	146.66	-23.41	-13.76%
W	Wayfair	115.91	12.61	12.21%
ETSY	Etsy Inc	88.96	27.88	45.65%

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.

Williams-Sonoma AI Stock Analysis