Williams-Sonoma (WSM)
NYSE:WSM
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Williams-Sonoma
(NYSE:WSM)
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Rating:71Outperform
Price Target:
$251.00
▲(26.33% Upside)
Action:Reiterated
Date:05/22/26
The score is driven primarily by strong financial performance (high margins, strong cash generation, manageable leverage) and a generally positive earnings update with continued market share gains and significant capital returns. This is tempered by mixed technical momentum (negative MACD and below longer-term averages) and a valuation that is not especially cheap (P/E ~22.5 with a modest ~1.43% yield), alongside near-term tariff and margin-cadence risks highlighted in guidance.
Positive Factors
High profitability and margins
WSM's persistently high gross and operating margins reflect durable pricing power, proprietary/private-label assortments and category mix advantages. These margins provide operating leverage and cash to fund reinvestment, shareholder returns and resilience through demand cycles, sustaining long-term profitability.
Negative Factors
Stagnant multi-year revenue growth
Revenue has shown only modest growth across recent periods, constraining scale benefits and placing more reliance on margin expansion and share gains to drive earnings. Sustained flat top-line growth limits upside and increases sensitivity to any margin headwinds or competitive share shifts over 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and margins
WSM's persistently high gross and operating margins reflect durable pricing power, proprietary/private-label assortments and category mix advantages. These margins provide operating leverage and cash to fund reinvestment, shareholder returns and resilience through demand cycles, sustaining long-term profitability.
Read all positive factors
Williams-Sonoma Key Performance Indicators (KPIs)
Williams-Sonoma (WSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$26.72B
Dividend Yield1.37%
Average Volume (3M)1.29M
Price to Earnings (P/E)24.7
Beta (1Y)1.38
Revenue Growth1.30%
EPS Growth1.14%
CountryUS
Employees19,600
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)9.06
Shares Outstanding117,746,610
10 Day Avg. Volume1,394,007
30 Day Avg. Volume1,289,640
Financial Highlights & Ratios
PEG Ratio42.56
Price to Book (P/B)12.48
Price to Sales (P/S)3.33
P/FCF Ratio24.63
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue3.41
Enterprise Value/Gross Profit7.40
Enterprise Value/Ebitda14.51
Forecast
1Y Price Target
$216.92Price Target Upside9.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)9.38
Revenue Forecast (FY)$8.16B
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
WSM generates revenue primarily by selling home and kitchen products directly to consumers across its brand portfolio. The company’s core revenue stream is merchandise sales through its e-commerce websites and mobile apps, supplemented by sales th...
Williams-Sonoma Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 26, 2026
Earnings Call Sentiment Positive
The call emphasized broad-based, profitable top-line momentum with every brand posting positive comps, strong B2B growth, significant supply chain offsets, and meaningful shareholder returns. Headwinds from tariffs, higher fuel costs and an inventory build with embedded tariff costs pressured merchandise margins and produced a cautious posture on guidance (no raise). Overall the company presented strong execution and confidence while acknowledging near-term macro and tariff risks.Positive Updates
Company-wide Comparable Sales Growth
Q1 comparable sales (comp) grew 4.8%, with both 1-year and 2-year comps accelerating; net revenues were $1.81 billion and every brand delivered a positive comp in the quarter.
Negative Updates
Merchandise Margin Pressure from Tariffs and Fuel
Merchandise margins declined ~100 basis points year-over-year and total gross margin was 44%, down approximately 30 basis points versus last year due to higher tariffs and ocean/domestic fuel costs.
Read all updates
Q1-2026 Updates
Positive
Negative
Company-wide Comparable Sales Growth
Q1 comparable sales (comp) grew 4.8%, with both 1-year and 2-year comps accelerating; net revenues were $1.81 billion and every brand delivered a positive comp in the quarter.
Read all positive updates
Company Guidance
The company reiterated fiscal 2026 guidance: comparable (brand) revenue growth of 2%–6% (midpoint 4%) and total net revenue growth of 2.7%–6.7%, with operating margin guided to 17.5%–18.1% (midpoint 17.8%); the outlook assumes no meaningful housing recovery, tariffs in place (front‑half weighted, no tariff refunds assumed), and higher oil prices at current levels embedded. Additional modeling inputs include full‑year interest income of ~$25 million, an effective tax rate of ~25.5%, and capital expenditures of ~$275 million (≈95% focused on e‑commerce, retail and supply chain); guidance also embeds ~70 basis points of non‑comp revenue from retail investments, a year‑end store count essentially flat to last year (then 1%–3% annual growth from FY27), and a long‑term outlook of mid‑to‑high single‑digit revenue growth with operating margins in the mid‑to‑high teens. The company reiterated its capital return priorities (quarterly dividend $0.76/share, +15% YoY; ~$1.1 billion remaining repurchase authorization) after returning $373 million in Q1 ($288M buybacks, ~1.4% of shares; $85M dividends).Williams-Sonoma Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
71
Positive
Cash Flow
76
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.88B | 7.81B | 7.71B | 7.75B | 8.67B | 8.25B |
| Gross Profit | 3.63B | 3.60B | 3.58B | 3.30B | 3.68B | 3.63B |
| EBITDA | 1.85B | 1.68B | 1.72B | 1.51B | 1.71B | 1.65B |
| Net Income | 1.09B | 1.09B | 1.13B | 949.76M | 1.13B | 1.13B |
Balance Sheet | ||||||
| Total Assets | 5.06B | 5.41B | 5.30B | 5.27B | 4.66B | 4.63B |
| Cash, Cash Equivalents and Short-Term Investments | 651.60M | 1.02B | 1.21B | 1.26B | 367.34M | 850.34M |
| Total Debt | 1.49B | 1.46B | 1.35B | 1.39B | 1.44B | 1.28B |
| Total Liabilities | 3.18B | 3.33B | 3.16B | 3.15B | 2.96B | 2.96B |
| Stockholders Equity | 1.87B | 2.08B | 2.14B | 2.13B | 1.70B | 1.66B |
Cash Flow | ||||||
| Free Cash Flow | 1.10B | 1.06B | 1.14B | 1.49B | 698.71M | 1.14B |
| Operating Cash Flow | 1.35B | 1.31B | 1.36B | 1.68B | 1.05B | 1.37B |
| Investing Cash Flow | -260.02M | -260.58M | -221.21M | -188.26M | -353.95M | -226.25M |
| Financing Cash Flow | -1.49B | -1.25B | -1.18B | -598.31M | -1.18B | -1.49B |
Williams-Sonoma Technical Analysis
Positive
198.69
Price Trends
194.65
Positive
195.35
Positive
193.03
Positive
Market Momentum
9.78
Negative
68.34
Neutral
74.60
Neutral
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 198.69 is below the 20-day moving average (MA) of 209.24, above the 50-day MA of 194.65, and above the 200-day MA of 193.03, indicating a bullish trend. The MACD of 9.78 indicates Negative momentum. The RSI at 68.34 is Neutral, neither overbought nor oversold. The STOCH value of 74.60 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $26.72B | 24.68 | 53.29% | 1.37% | 1.30% | 1.14% | |
67 Neutral | $15.75B | 13.76 | 40.05% | 5.46% | 0.99% | 31.91% | |
67 Neutral | $7.02B | 24.99 | -25.47% | ― | 1.78% | 75.71% | |
63 Neutral | $4.14B | 5.71 | -52.38% | 4.16% | -1.40% | -4.34% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $11.68B | -38.02 | 10.98% | ― | 6.80% | 18.24% | |
52 Neutral | $2.80B | 27.08 | 515.43% | ― | 4.84% | 21.25% |
* Consumer Cyclical Sector Average
WSM
Williams-Sonoma
226.92
71.31
45.83%
BBY
Best Buy Co
74.73
11.87
18.88%
BBWI
Bath & Body Works
20.56
-7.11
-25.69%
RH
RH
148.09
-38.13
-20.48%
W
Wayfair
88.52
39.65
81.13%
ETSY
Etsy
73.95
20.03
37.15%
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.