Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $24.35B
• Dividend Yield: 1.28%
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 1.45
• Revenue Growth: 3.28%
• EPS Growth: 9.29%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 79
• Industry: Specialty Retail
• EPS (TTM): 2.00
• Shares Outstanding: 122,998,060
• 10 Day Avg. Volume: 1,584,455
• 30 Day Avg. Volume: 1,354,614
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 3.01
• Enterprise Value/Gross Profit: 6.59
• Enterprise Value/Ebitda: 14.59
• 1Y Price Target: $205.93
• Price Target Upside: 9.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 74 Outperform
• Price Target: $215.00 ▲(14.33% Upside)

Williams-Sonoma's strong financial performance and strategic initiatives are key strengths, but valuation concerns and macroeconomic challenges temper the outlook. Technical indicators are mixed, and while corporate events bolster confidence, they do not significantly alter the overall risk profile.

Positive Factors

Brand Performance

WSM reported F2Q EPS and comp ahead of Street forecasts, with positive comps across brands.

Financial Guidance

WSM raised its FY25 top-line guidance on encouraging YTD trends and continued momentum in the business, expecting positive comp on net sales growth.

Sales Growth

WSM posted stronger-than-expected sales growth and profits, showing its ongoing ability to flex costs in both directions relative to gross profit dollar performance.

Negative Factors

Operating Margins

The price/cost relationship becomes more challenging, with 2H25e operating margin expectations in a range of 17.4% to 18.2%, vs consensus’ 18.8% and 19.6% in 2H24, implying ~180bps of y/y pressure.

Tariff and Macro Environment

Uncertain tariff and macro environment is a concern for the company.

Tariff Impact

Furniture tariffs add a layer of uncertainty to the company's future performance.

Williams-Sonoma Business Overview & Revenue Model

Company Description

Williams-Sonoma, Inc. (WSM) is a leading specialty retailer of high-quality products for the kitchen and home. Founded in 1956, the company operates several brands, including Williams Sonoma, Pottery Barn, West Elm, and Rejuvenation, catering to diverse customer needs across various lifestyle segments. The company offers a wide range of products, including cookware, furniture, home decor, and outdoor items, focusing on design, quality, and sustainability.

How the Company Makes Money

Williams-Sonoma generates revenue primarily through the sale of its products across multiple channels, including retail stores, e-commerce platforms, and catalog sales. The company operates a robust omnichannel strategy, allowing it to reach customers both online and offline. Key revenue streams include direct-to-consumer sales, which account for a significant portion of total revenue, as well as wholesale sales to third-party retailers. Additionally, Williams-Sonoma benefits from strategic partnerships with designers and influencers, enhancing brand visibility and driving sales. The company's loyalty programs and subscription services also contribute to customer retention and repeat purchases, further bolstering its financial performance.

Williams-Sonoma Financial Statement Overview

Summary

Williams-Sonoma demonstrates strong profitability with high margins and robust cash flow management. The balance sheet is healthy, though recent declines in revenue and slight reductions in assets and equity warrant attention.

Income Statement

Williams-Sonoma has demonstrated strong profitability and revenue stability. The TTM Gross Profit Margin stands at 46.23%, and the Net Profit Margin is 14.35%, indicating efficient cost management and strong bottom-line performance. EBIT and EBITDA Margins are also solid at 18.39% and 20.90% respectively. However, revenue growth has been slightly inconsistent, with a negative trajectory in recent periods compared to the peak in 2023.

Balance Sheet

The company maintains a healthy balance sheet with an Equity Ratio of 41.92%, showcasing a strong equity position. The Debt-to-Equity Ratio is 0.63, indicating moderate leverage. Return on Equity is impressive at 51.66%, signifying effective use of shareholders' equity to generate profits. However, total assets and stockholders' equity have slightly decreased over time, indicating potential future risks if the trend continues.

Cash Flow

Williams-Sonoma exhibits robust cash flow management, with a Free Cash Flow of $1.01 billion in the TTM period. The Operating Cash Flow to Net Income Ratio is 1.12, indicating strong alignment between cash generation and profitability. Although the Free Cash Flow Growth Rate has declined due to previous high levels, the company still maintains a positive cash flow trajectory, providing flexibility for future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.83B	7.71B	7.75B	8.67B	8.25B	6.78B
Gross Profit	3.58B	3.58B	3.30B	3.68B	3.63B	2.64B
EBITDA	1.62B	1.66B	1.48B	1.71B	1.65B	1.10B
Net Income	1.11B	1.13B	949.76M	1.13B	1.13B	680.71M
Balance Sheet
Total Assets	5.23B	5.30B	5.27B	4.66B	4.63B	4.66B
Cash, Cash Equivalents and Short-Term Investments	985.82M	1.21B	1.26B	367.34M	850.34M	1.20B
Total Debt	1.39B	1.35B	1.39B	1.44B	1.28B	1.53B
Total Liabilities	3.08B	3.16B	3.15B	2.96B	2.96B	3.01B
Stockholders Equity	2.15B	2.14B	2.13B	1.70B	1.66B	1.65B
Cash Flow
Free Cash Flow	1.03B	1.14B	1.49B	698.71M	1.14B	1.11B
Operating Cash Flow	1.29B	1.36B	1.68B	1.05B	1.37B	1.27B
Investing Cash Flow	-261.74M	-221.21M	-188.26M	-353.95M	-226.25M	-168.88M
Financing Cash Flow	-1.31B	-1.18B	-598.31M	-1.18B	-1.49B	-343.02M

Williams-Sonoma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 188.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 188.06 is below the 20-day moving average (MA) of 199.90, above the 50-day MA of 182.74, and above the 200-day MA of 175.82, indicating a neutral trend. The MACD of 3.05 indicates Positive momentum. The RSI at 43.76 is Neutral, neither overbought nor oversold. The STOCH value of 15.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WSM.

Williams-Sonoma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSM	74 Outperform	$24.35B	22.41	51.75%	1.28%	3.28%	9.29%
BBY	70 Outperform	$15.57B	18.00	30.21%	5.01%	-3.23%	-28.11%
BBWI	66 Neutral	$6.63B	8.32	-52.83%	2.54%	-0.18%	―
RH	64 Neutral	$4.14B	52.58	-38.18%	―	8.31%	14.65%
Sector *	61 Neutral	$17.78B	13.97	-5.49%	3.03%	1.50%	-15.71%
W	57 Neutral	$9.46B	―	17.86%	―	0.87%	54.67%
ETSY	57 Neutral	$5.57B	44.96	-39.97%	―	2.38%	-38.88%

Williams-Sonoma Corporate Events

Williams-Sonoma Amends Credit Agreement with Bank of America

On June 26, 2025, Williams-Sonoma, Inc. announced an amendment to its credit agreement with Bank of America, extending the maturity date of its revolving loan facility to 2030 and increasing its aggregate commitments to $600 million. This strategic financial move, which also involves transitioning to the Term SOFR standard and adjusting interest rates and fees, is expected to enhance the company’s financial flexibility and support its growth objectives, while maintaining certain covenants and guarantees from its U.S. subsidiaries.

Williams-Sonoma Elects Directors at Annual Meeting

On June 11, 2025, Williams-Sonoma, Inc. held its 2025 Annual Meeting of Stockholders, where all director nominees were elected, and proposals regarding executive compensation and the selection of Deloitte & Touche LLP as the independent accounting firm were approved. These decisions reflect the company’s continued commitment to strong governance and financial transparency, potentially impacting its operational strategies and stakeholder confidence positively.