Williams-Sonoma (WSM)
NYSE:WSM
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Williams-Sonoma
(NYSE:WSM)
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Rating:67Neutral
Price Target:
$200.00
▲(9.93% Upside)
Action:DowngradedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Williams-Sonoma (WSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.72B
Dividend Yield1.37%
Average Volume (3M)1.28M
Price to Earnings (P/E)23.9
Beta (1Y)1.42
Revenue Growth5.10%
EPS Growth7.59%
CountryUS
Employees19,600
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)3.04
Shares Outstanding119,380,714
10 Day Avg. Volume1,829,445
30 Day Avg. Volume1,283,243
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/Revenue2.82
Enterprise Value/Gross Profit6.10
Enterprise Value/Ebitda14.21
Forecast
1Y Price Target
$209.58Price Target Upside15.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)9.27
Revenue Forecast (FY)$8.15B
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 libra...
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, furni...
Williams-Sonoma Earnings Call Summary
Earnings Call Date:Mar 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call presented a net-positive picture: management delivered record EPS, strong cash generation, broad-based comp gains across brands, robust B2B and emerging-brand momentum, and a confident fiscal 2026 plan including store investments and continued capital returns. Counterbalancing this are meaningful margin headwinds from tariffs, a YoY gross- and operating-margin decline, inventory exposed to embedded tariff costs, and a notable Q4 weakness at Pottery Barn. On balance the financial strength, cash returns, brand and channel momentum, and explicit guidance that anticipates growth outweigh the near-term margin and tariff challenges.Positive Updates
Record EPS and Strong Profitability
Full-year diluted EPS reached a record $8.84, up 1% year-over-year; Q4 diluted EPS was $3.04. Full-year operating margin finished at 18.1% and Q4 operating margin was 20.3%, demonstrating continued profitable execution.
Negative Updates
Tariff-Driven Margin Pressure
Merchandise margins were adversely impacted by tariffs: Q4 saw a 170 basis point decline in merchandise margins and full-year merchandise margin reduction (tariff-related). Management expects tariff impact to be front-half weighted in fiscal 2026 and guidance assumes current tariffs remain in place.
Read all updates
Q4-2025 Updates
Positive
Negative
Record EPS and Strong Profitability
Full-year diluted EPS reached a record $8.84, up 1% year-over-year; Q4 diluted EPS was $3.04. Full-year operating margin finished at 18.1% and Q4 operating margin was 20.3%, demonstrating continued profitable execution.
Read all positive updates
Company Guidance
The company guided fiscal 2026 to comp brand revenue growth of 2%–6% (midpoint 4%) and total net revenue growth of 2.7%–6.7%, with operating margin expected to be 17.5%–18.1% (midpoint 17.8%); the outlook assumes no meaningful housing recovery, does not include OB3 tax benefits, and embeds tariff assumptions (Section 232, current Section 301, and Section 122 at ~15%, with no UFLPA refund) with the tariff hit expected to be front‑half weighted. Capital plans call for roughly $275 million of capex (≈95% to e‑commerce, retail and supply‑chain), a near‑doubling of retail investment, 20 new store openings and ~19 repositions in 2026 (embedded ≈70 basis points of non‑comp growth from real estate), with store count roughly flat in 2026 and then targeted growth of ~1%–3% annually thereafter. Shareholder return priorities include a 15% dividend increase to $0.76 per quarter and $1.3 billion remaining on the repurchase authorization, and management reiterated a long‑term outlook of mid‑ to high‑single‑digit revenue growth and operating margins in the mid‑ to high‑teens.Williams-Sonoma Financial Statement Overview
Summary
Income Statement
80
Positive
Balance Sheet
74
Positive
Cash Flow
66
Positive
| 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
Negative
181.93
Price Trends
201.82
Negative
194.09
Negative
189.50
Negative
Market Momentum
-6.22
Positive
38.80
Neutral
35.27
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 181.93 is below the 20-day moving average (MA) of 188.63, below the 50-day MA of 201.82, and below the 200-day MA of 189.50, indicating a bearish trend. The MACD of -6.22 indicates Positive momentum. The RSI at 38.80 is Neutral, neither overbought nor oversold. The STOCH value of 35.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
67 Neutral | $21.72B | 23.88 | 51.45% | 1.37% | 5.10% | 7.59% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $3.66B | 7.11 | -44.22% | 4.16% | -1.04% | -20.88% | |
55 Neutral | $4.64B | 33.41 | -15.36% | ― | 1.98% | -20.98% | |
54 Neutral | $10.43B | -41.81 | 11.30% | ― | 3.35% | 42.99% | |
51 Neutral | $12.63B | 12.85 | 38.54% | 5.46% | -0.95% | -48.28% | |
45 Neutral | $2.57B | 22.31 | -140.97% | ― | 9.74% | 55.13% |
* Consumer Cyclical Sector Average
WSM
Williams-Sonoma
181.93
20.02
12.36%
BBY
Best Buy Co
60.40
-10.47
-14.78%
BBWI
Bath & Body Works
18.19
-12.60
-40.92%
RH
RH
136.94
-106.48
-43.74%
W
Wayfair
79.75
44.14
123.95%
ETSY
Etsy
48.23
1.31
2.79%
Williams-Sonoma Corporate Events
Stock BuybackDividendsFinancial Disclosures
Williams-Sonoma Boosts Dividend After Strong Fiscal 2025
Positive
Mar 18, 2026
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 53r...
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.