Williams-Sonoma, Inc. announces strong fourth quarter and fiscal year 2025 results

SAN FRANCISCO--( BUSINESS WIRE)--Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the fourth quarter and fiscal year ended February 1, 2026 (fiscal 2025). The fourth quarter fiscal 2025 consisted of 13 weeks, and the fourth quarter fiscal 2024 consisted of 14 weeks. Fiscal 2025 consisted of 52 weeks, and fiscal 2024 consisted of 53 weeks.

“We are proud of our strong finish to 2025. In Q4, our comp came in at +3.2%, and we delivered an operating margin of 20.3% with earnings per share of $3.04. Normalizing for the 53rd week last year and the tariff impact this year, we delivered substantial operating margin improvement versus last year. As we look forward to 2026 and beyond, we are confident in our competitive advantages that have allowed us to take market share, and our focus is on widening that advantage,” said Laura Alber, President and Chief Executive Officer.

Alber concluded, “In 2025, we delivered sustainable, profitable growth in a dynamic environment. This performance is a testament to strong consumer demand for our distinctive products and brands, and our world class team. Our powerful portfolio of brands, strong channel execution, and growth strategies drove our results in 2025. And in 2026, we are focused on accelerating growth, delivering world-class customer service, and driving earnings.”

FOURTH QUARTER 2025 HIGHLIGHTS

FISCAL YEAR 2025 HIGHLIGHTS

DIVIDEND INCREASE

OUTLOOK

FIRST QUARTER 2024 OUT-OF-PERIOD FREIGHT ADJUSTMENT

Subsequent to the filing of our fiscal 2023 Form 10-K, in April 2024, we determined that we over-recognized freight expense in fiscal 2021, 2022 and 2023 for a cumulative amount of $49 million. We evaluated the error, both qualitatively and quantitatively, and determined that no prior interim or annual periods were materially misstated. We then evaluated whether the cumulative amount of the over-accrual was material to our projected fiscal 2024 results, and determined the cumulative amount was not material. Therefore, our Consolidated Financial Statements for fiscal 2024 include an out-of-period adjustment of $49 million, recorded in the first quarter of fiscal 2024, to reduce cost of goods sold and accounts payable, which corrected the cumulative error on the balance sheet as of January 28, 2024.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, March 18, 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 includes non-GAAP financial measures. Additional information regarding Adjusted Return on Invested Capital, which is a non-GAAP financial measure, is provided at the end of this press release along with a reconciliation of this measure to the most directly comparable U.S. generally accepted accounting principles (“GAAP”) financial measure. We have not provided a reconciliation of non-GAAP measures to the corresponding 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 and early termination charges, among others. For the same reasons, we are unable to address the probable significance of 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 dividend expectations.

The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, without limitation: 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 and trade policies and regulations; our ability to mitigate current and future tariffs; 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; 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 impact of periods of decreased home purchases; our ability to anticipate consumer preferences and buying trends overall and as they relate to specific brands; effective inventory management; timely and effective sourcing of merchandise from our foreign and domestic suppliers and delivery of merchandise through our supply chain to our stores and customers; 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, including our third-party providers; our ability to respond to the growing use of and also 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 retail initiatives; our brands, products 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; disruptions in the financial markets; our ability to control employment, advertising, occupancy, and other operating costs; payment of dividends; the growth from our emerging brands; 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 2, 2025 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We have not filed our Form 10-K for the fiscal year ended February 1, 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-K for the fiscal year ended February 1, 2026. 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, and GreenRow — 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 Fourteen Weeks Ended

February 1, 2026

February 2, 2025

(In thousands, except per share amounts)

% of Net

Revenues

% of Net

Revenues

Net revenues

2,357,129

100.0

2,462,218

100.0

Cost of goods sold

1,252,243

53.1

1,296,593

52.7

Gross profit

1,104,886

46.9

1,165,625

47.3

Selling, general and administrative expenses

627,079

26.6

635,484

25.8

Operating income

477,807

20.3

530,141

21.5

Interest income, net

8,440

0.4

12,485

0.5

Earnings before income taxes

486,247

20.6

542,626

22.0

Income taxes

118,227

5.0

131,908

5.4

Net earnings

368,020

15.6

410,718

16.7

Earnings per share (EPS):

Basic

3.09

3.33

Diluted

3.04

3.28

Shares used in calculation of EPS:

Basic

119,122

123,201

Diluted

120,997

125,228

4th Quarter Net Revenues and Comparable Brand Revenue Growth (Decline) 1

Net Revenues

Comparable Brand Revenue

Growth (Decline)

(In thousands, except percentages)

Q4 25

Q4 24

Q4 25

Q4 24

Pottery Barn

838,135

919,041

(2.3

(0.5

West Elm

485,623

501,004

4.8

4.2

Williams Sonoma 2

579,345

572,590

7.2

5.7

Pottery Barn Kids and Teen

330,204

338,588

4.0

3.5

Other 3

123,822

130,995

N/A

Total

2,357,129

2,462,218

3.2

3.1

1 See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue, which is calculated on a 13-week to 13-week basis for Q4 2025 and a 14-week to 14-week basis for Q4 2024, and includes business-to-business net revenues.

2 Includes Williams Sonoma Home net revenues.

3 Primarily consists of net revenues from Rejuvenation, Mark and Graham, our international franchise operations and GreenRow.

Condensed Consolidated Statements of Earnings (unaudited)

For the Fiscal Year Ended

February 1, 2026

February 2, 2025

(In thousands, except per share amounts)

% of Net

Revenues

% of Net

Revenues

Net revenues

7,806,816

100.0

7,711,541

100.0

Cost of goods sold

4,203,765

53.8

4,129,242

53.5

Gross profit

3,603,051

46.2

3,582,299

46.5

Selling, general and administrative expenses

2,187,329

28.0

2,152,115

27.9

Operating income

1,415,722

18.1

1,430,184

18.6

Interest income, net

36,838

0.5

55,548

0.7

Earnings before income taxes

1,452,560

18.6

1,485,732

19.3

Income taxes

364,123

4.7

360,481

4.7

Net earnings

1,088,437

13.9

1,125,251

14.6

Earnings per share (EPS):

Basic

8.96

8.91

Diluted

8.84

8.79

Shares used in calculation of EPS:

Basic

121,446

126,242

Diluted

123,153

128,041

Fiscal Year Net Revenues and Comparable Brand Revenue Growth (Decline) 1

Net Revenues

Comparable Brand Revenue

Growth (Decline)

(In thousands, except percentages)

FY 25

FY 24

FY 25

FY 24

Pottery Barn

2,999,332

3,039,939

0.4

(6.2

West Elm

1,859,501

1,840,582

2.9

(2.0

)

Williams Sonoma 2

1,362,308

1,302,821

6.9

2.4

Pottery Barn Kids and Teen

1,138,051

1,107,057

4.4

3.0

Other 3

447,624

421,142

N/A

Total

7,806,816

7,711,541

3.5

(1.6

1 See the Company’s 10-K and 10-Q filings for the definition of comparable brand revenue, which is calculated on a 52-week to 52-week basis for fiscal 2025 and a 53-week to 53-week basis for fiscal 2024, and includes business-to-business net revenues.

2 Includes Williams Sonoma Home net revenues.

3 Primarily consists of net revenues from Rejuvenation, Mark and Graham, our international franchise operations and GreenRow.

Condensed Consolidated Balance Sheets (unaudited)

As of

(In thousands, except per share amounts)

February 1, 2026

February 2, 2025

Assets

Current assets

Cash and cash equivalents

1,019,801

1,212,977

Accounts receivable, net

126,821

117,678

Merchandise inventories, net

1,462,849

1,332,429

Prepaid expenses

80,053

66,914

Other current assets

23,663

24,611

Total current assets

2,713,187

2,754,609

Property and equipment, net

1,095,158

1,033,934

Operating lease right-of-use assets

1,270,272

1,177,805

Deferred income taxes, net

99,161

120,657

Goodwill

77,398

77,260

Other long-term assets, net

156,736

137,342

Total assets

5,411,912

5,301,607

Liabilities and stockholders' equity

Current liabilities

Accounts payable

637,985

645,667

Accrued expenses

314,588

286,033

Gift card and other deferred revenue

602,940

584,791

Income taxes payable

78,943

67,696

Operating lease liabilities

221,356

234,180

Other current liabilities

98,318

93,607

Total current liabilities

1,954,130

1,911,974

Long-term operating lease liabilities

1,235,549

1,113,135

Other long-term liabilities

139,674

134,079

Total liabilities

3,329,353

3,159,188

Stockholders' equity

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

—

Common stock: $0.01 par value; 253,125 shares authorized; 118,770 and 123,125 shares issued and outstanding at February 1, 2026 and February 2, 2025, respectively

1,188

1,232

Additional paid-in capital

587,433

571,585

Retained earnings

1,509,129

1,591,630

Accumulated other comprehensive loss

(13,176

)

(21,593

)

Treasury stock, at cost

(2,015

)

(435

)

Total stockholders' equity

2,082,559

2,142,419

Total liabilities and stockholders' equity

5,411,912

5,301,607

Retail Store Data

(unaudited)

Beginning of quarter

End of quarter

As of

November 2, 2025

Openings

Closings

February 1, 2026

February 2, 2025

Pottery Barn

183

)

181

Williams Sonoma

153

)

152

154

West Elm

119

—

)

116

121

Pottery Barn Kids

—

)

Rejuvenation

—

Total

513

(10

)

506

512

Condensed Consolidated Statements of Cash Flows (unaudited)

For the Fiscal Year Ended

(In thousands)

February 1, 2026

February 2, 2025

Cash flows from operating activities:

Net earnings

1,088,437

1,125,251

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

activities:

Depreciation and amortization

231,449

229,802

Loss on disposal/impairment of assets

7,663

5,539

Non-cash lease expense

251,591

255,923

Deferred income taxes

20,315

(9,741

)

Stock-based compensation expense

106,522

98,983

Other

(2,556

)

(2,603

)

Changes in:

Accounts receivable

(8,811

)

5,004

Merchandise inventories

(125,876

)

(88,085

)

Prepaid expenses and other assets

(29,772

)

(19,832

)

Accounts payable

(31,802

)

15,360

Accrued expenses and other liabilities

37,286

27,023

Gift card and other deferred revenue

17,443

11,587

Operating lease liabilities

(258,247

)

(265,131

)

Income taxes payable

11,247

(28,858

)

Net cash provided by operating activities

1,314,889

1,360,222

Cash flows from investing activities:

Purchases of property and equipment

(259,438

)

(221,567

)

Other

(1,138

)

360

Net cash used in investing activities

(260,576

)

(221,207

)

Cash flows from financing activities:

Repurchases of common stock

(853,962

)

(807,477

)

Payment of dividends

(316,484

)

(280,058

)

Tax withholdings related to stock-based awards

(73,798

)

(94,214

)

Debt issuance costs

(1,187

)

—

Other

(6,941

)

(2,474

)

Net cash used in financing activities

(1,252,372

)

(1,184,223

)

Effect of exchange rates on cash and cash equivalents

4,883

(3,822

)

Net decrease in cash and cash equivalents

(193,176

)

(49,030

)

Cash and cash equivalents at beginning of period

1,212,977

1,262,007

Cash and cash equivalents at end of period

1,019,801

1,212,977

Adjusted Return on Invested Capital (“Adjusted ROIC”)

We believe that Adjusted ROIC is a useful financial ratio for investors in evaluating the efficiency and effectiveness of the capital we have invested in our business to generate returns over time. Our Adjusted ROIC calculation excludes certain items that we do not consider representative of our operating performance.

Adjusted ROIC is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for net earnings, total assets or other GAAP financial measures. Our method of calculating a non-GAAP financial ratio may differ from other companies’ methods and therefore may not be comparable to those used by other companies. We also present the financial ratio calculated using the most directly comparable GAAP measures and refer to this as Return on Invested Capital (“ROIC”). The following tables reconcile ROIC to Adjusted ROIC:

Numerator (using the most directly comparable GAAP measures):

For the Fiscal Year Ended

(In thousands)

February 1, 2026

February 2, 2025

Operating income

1,415,722

1,430,184

Income tax 1

(355,346

)

(347,535

)

Operating income after tax

1,060,376

1,082,649

1 Reflects a hypothetical provision for income taxes on operating income, using the Company's effective tax rates of 25.1% for fiscal 2025 and 24.3% for fiscal 2024.

Numerator (adjusted):

For the Fiscal Year Ended

(In thousands)

February 1, 2026

February 2, 2025

Operating income

1,415,722

1,430,184

Out-of-period Freight Adjustment 1

—

(48,972

)

Operating lease costs 2

310,736

299,105

Income tax adjustment 3

(433,341

)

(408,317

)

Adjusted operating income after tax

1,293,117

1,272,000

1 During Q1 2024, we determined that we over-recognized freight expense in fiscal 2021, 2022 and 2023. Therefore, we recorded an out-of-period adjustment to reduce cost of goods sold. We believe this is not related to the operations of fiscal 2024.

2 We adjust for operating lease costs to align with the metrics we use to determine certain components of management compensation.

3 Adjustment reflects a hypothetical provision for income taxes using the Company's effective tax rates of 25.1% for fiscal 2025 and 24.3% for fiscal 2024.

Denominator:

As of

(In thousands, except percentages)

February 1, 2026

February 2, 2025

January 28, 2024

Total assets

5,411,912

5,301,607

5,273,548

Total current liabilities

(1,954,130

)

(1,911,974

)

(1,880,315

)

Cash in excess of $200 million

(819,801

)

(1,012,977

)

(1,062,007

)

Invested capital

2,637,981

2,376,656

2,331,226

Average invested capital

2,507,319

2,353,941

ROIC

42.3

46.0

Adjusted ROIC

51.6

54.0