Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $21.30B
• Dividend Yield: 1.37%
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): 23.9
• Beta (1Y): 1.45
• Revenue Growth: 5.10%
• EPS Growth: 7.59%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 3.04
• Shares Outstanding: 119,380,714
• 10 Day Avg. Volume: 1,622,929
• 30 Day Avg. Volume: 1,151,822
• PEG Ratio: 42.56
• Price to Book (P/B): 12.48
• Price to Sales (P/S): 3.33
• P/FCF Ratio: 24.63
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 2.81
• Enterprise Value/Gross Profit: 6.09
• Enterprise Value/Ebitda: 14.17
• 1Y Price Target: $209.58
• Price Target Upside: 14.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 9.28
• Revenue Forecast (FY): $8.15B

• Rating: 67 Neutral
• Price Target: $200.00 ▲(9.54% Upside)
• Action: Downgraded Date: 03/19/26
• Date: Action: Downgraded 03/19/26

The score is driven primarily by solid financial quality (strong margins and exceptionally high ROE) and a constructive earnings outlook with continued capital returns. These positives are tempered by clearly weak technical momentum (price below key moving averages with negative MACD) and softer recent trends in growth and free-cash-flow conversion.

Positive Factors

High profitability and ROE

Sustained high gross and net margins and an exceptionally high ROE underpin durable earnings quality. These metrics signal pricing power, efficient inventory/assortment economics and strong returns on invested capital, enabling reinvestment, buybacks or dividend support through retail cycles.

Omnichannel brands and B2B momentum

A diversified omnichannel brand portfolio plus accelerating B2B and emerging-brand performance reduces concentration risk and enlarges growth channels. Scalable B2B contracts and fast-growing niche brands create multiple durable revenue streams beyond core retail comps.

Strong cash generation and capital returns

Robust operating cash flow and consistent free cash generation provide financial flexibility to fund e‑commerce and store investments while sustaining buybacks and an expanding dividend. Large cashflows support strategic reinvestment and shareholder-return optionality over the medium term.

Negative Factors

Stalled top-line growth

Revenue has flattened to mildly negative TTM growth, constraining operating leverage and the payback on investments in stores and digital. Without a sustained lift in core demand or material share gains, scale benefits may be harder to capture and margin expansion limited.

Tariff-driven margin risk and inventory embed

Elevated inventory with embedded tariff costs creates ongoing margin volatility and working-capital drag. Tariff exposure is policy‑dependent and front‑half weighted in guidance, meaning margins and cash conversion can be persistently pressured if trade measures persist or escalate.

Weaker cash conversion and expense deleverage

A meaningful decline in FCF and lower cash conversion versus net income signals weakening operational liquidity and greater sensitivity to working-capital swings. Combined with SG&A and general expense deleverage, this reduces margin durability if sales slow or costs reaccelerate.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-Sonoma, Inc. operates as an omni-channel specialty retailer of various products for home. It offers cooking, dining, and entertaining products, such as cookware, tools, electrics, cutlery, tabletop and bar, outdoor, furniture, and a library of cookbooks under the Williams Sonoma Home brand, as well as home furnishings and decorative accessories under the Williams Sonoma lifestyle brand; and furniture, bedding, lighting, rugs, table essentials, and decorative accessories under the Pottery Barn brand. The company also provides home decor products under the West Elm brand; kids accessories under the Pottery Barn Kids brand; and an organic bedding to multi-purpose furniture under the Pottery Barn Teen brand. In addition, it offers made-to-order lighting, hardware, furniture, and home decors inspired by history under the Rejuvenation brand; and women's and men's accessories, travel, entertaining and bar, home décor, and seasonal items under the Mark and Graham brand, as well as operates a 3-D imaging and augmented reality platform for the home furnishings and décor industry. The company markets its products through e-commerce websites, direct-mail catalogs, and retail stores. It operates 544 stores comprising 502 stores in 41states, Washington, D.C., and Puerto Rico; 20 stores in Canada; 19 stores in Australia; 3 stores in the United Kingdom; and 139 franchised stores, as well as e-commerce websites in various countries in the Middle East, the Philippines, Mexico, South Korea, and India. Williams-Sonoma, Inc. was founded in 1956 and is headquartered in San Francisco, California.

How the Company Makes Money

WSM primarily makes money by selling merchandise under its brand portfolio through an omnichannel model (e-commerce and brick-and-mortar stores). The core revenue stream is retail product sales across categories such as kitchenware/cookware, furniture, home decor, textiles, and other home-related goods, with transactions occurring both online and in stores. The company also generates revenue from services tied to its retail offering, most notably design and related customer services associated with home furnishing purchases (e.g., helping customers plan and select products), where applicable. Key factors influencing earnings include product mix (including higher-ticket furniture purchases), pricing and promotional strategy, sourcing and inventory management, and fulfillment/logistics performance for direct-to-consumer shipping. Information about specific third-party partnerships or licensing arrangements is null.

Williams-Sonoma Financial Statement Overview

Summary

Fundamentals remain solid on profitability (TTM gross margin ~46% and net margin ~13.9%) and very strong returns (TTM ROE ~51%), but growth has stalled (TTM revenue growth -1.33%) and operating leverage has cooled (TTM EBIT margin ~12.3% vs ~18.5% in 2025). Cash generation is still positive, yet free-cash-flow momentum and conversion have weakened (TTM FCF down ~33%; FCF ~62% of net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue is essentially flat to slightly down versus recent years (TTM revenue growth -1.33% and 2024–2025 modest declines), but profitability remains a key strength. Gross margin is strong at ~46% in TTM, and net margin remains healthy at ~13.9%. That said, operating profitability has softened versus 2025 (TTM EBIT margin ~12.3% vs ~18.5% in 2025), pointing to higher costs and/or increased promotional intensity. Overall: high-margin model with resilient earnings, but near-term growth and operating leverage have cooled.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.70 in TTM, improved from higher levels earlier in the period. Equity has grown versus 2023, and returns on equity are exceptionally high (TTM ~51%), supporting the quality of the earnings profile. The main watch-out is that the company still runs with meaningful debt relative to equity for retail, so results are more sensitive if demand weakens. Overall: solid and improving leverage picture with very strong shareholder returns, but not a low-debt balance sheet.

Cash Flow

Cash generation remains positive (TTM operating cash flow ~$1.19B; free cash flow ~$0.74B), but momentum has weakened materially. TTM free cash flow fell ~33% versus the prior period, and cash conversion is less robust than last year (TTM free cash flow is ~62% of net income vs ~84% in 2025). Operating cash flow also covers a smaller share of accounting earnings than in stronger years, suggesting more working-capital drag and/or less favorable cash timing. Overall: still generating solid cash, but conversion and trend have turned into the key concern.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	7.81B	7.71B	7.75B	8.67B	8.25B
Gross Profit	3.60B	3.58B	3.30B	3.68B	3.63B
EBITDA	1.65B	1.66B	1.48B	1.71B	1.65B
Net Income	1.09B	1.13B	949.76M	1.13B	1.13B
Balance Sheet
Total Assets	5.41B	5.30B	5.27B	4.66B	4.63B
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.21B	1.26B	367.34M	850.34M
Total Debt	1.46B	1.35B	1.39B	1.44B	1.28B
Total Liabilities	3.33B	3.16B	3.15B	2.96B	2.96B
Stockholders Equity	2.08B	2.14B	2.13B	1.70B	1.66B
Cash Flow
Free Cash Flow	1.06B	1.14B	1.49B	698.71M	1.14B
Operating Cash Flow	1.31B	1.36B	1.68B	1.05B	1.37B
Investing Cash Flow	-260.58M	-221.21M	-188.26M	-353.95M	-226.25M
Financing Cash Flow	-1.25B	-1.18B	-598.31M	-1.18B	-1.49B

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 182.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WSM, the sentiment is Negative. The current price of 182.58 is below the 20-day moving average (MA) of 192.29, below the 50-day MA of 202.91, and below the 200-day MA of 189.12, indicating a bearish trend. The MACD of -6.98 indicates Positive momentum. The RSI at 32.08 is Neutral, neither overbought nor oversold. The STOCH value of 32.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	67 Neutral	$21.30B	23.88	51.45%	1.37%	5.10%	7.59%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BBWI	56 Neutral	$3.90B	7.11	-44.22%	4.16%	-1.04%	-20.88%
ETSY	55 Neutral	$5.09B	33.41	-15.36%	―	1.98%	-20.98%
W	54 Neutral	$9.46B	-41.81	11.30%	―	3.35%	42.99%
BBY	51 Neutral	$13.13B	12.85	38.54%	5.46%	-0.95%	-48.28%
RH	45 Neutral	$2.40B	22.31	-140.97%	―	9.74%	55.13%

Williams-Sonoma Corporate Events

Williams-Sonoma Boosts Dividend After Strong Fiscal 2025

Williams-Sonoma reported strong results for the fourth quarter and fiscal year 2025, ended February 1, 2026, with Q4 comparable brand revenue up 3.2%, an operating margin of 20.3% and diluted EPS of $3.04, despite a tougher comparison due to a 53rd week in the prior year. For the full year, comparable brand revenue rose 3.5%, operating margin was 18.1% and diluted EPS reached a record $8.84, supported by robust demand, disciplined cost management and continued market share gains.

The company generated $1.3 billion in operating cash flow and returned nearly $1.2 billion to shareholders in fiscal 2025 through stock buybacks and dividends, while ending the year with $1.0 billion in cash and a remaining $1.3 billion repurchase authorization. Reflecting its confidence in future performance, Williams-Sonoma’s board approved a 15% increase in the quarterly dividend to $0.76 per share in March 2026, underscoring a commitment to shareholder returns amid ongoing investments in growth and customer service.

The most recent analyst rating on (WSM) stock is a Buy with a $230.00 price target. To see the full list of analyst forecasts on Williams-Sonoma stock, see the WSM Stock Forecast page.