Williams-Sonoma (WSM) AI Stock Analysis

• Market Cap: $23.95B
• Dividend Yield: 1.24%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 21.6
• Beta (1Y): 1.45
• Revenue Growth: 3.28%
• EPS Growth: 9.29%
• Country: US
• Employees: 19,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 2.00
• Shares Outstanding: 121,790,340
• 10 Day Avg. Volume: 949,660
• 30 Day Avg. Volume: 1,320,450
• PEG Ratio: 1.08
• Price to Book (P/B): 12.05
• Price to Sales (P/S): 3.35
• P/FCF Ratio: 22.67
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 3.01
• Enterprise Value/Gross Profit: 6.59
• Enterprise Value/Ebitda: 14.10
• 1Y Price Target: $206.40
• Price Target Upside: 4.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 76 Outperform
• Price Target: $213.00 ▲(7.44% Upside)

Williams-Sonoma's strong financial performance and strategic initiatives, including AI integration and financial flexibility improvements, are key strengths. While technical indicators show mixed signals, the company's solid earnings growth and strategic focus on innovation and customer service provide a positive outlook. Challenges such as tariff pressures and macroeconomic uncertainties are notable risks.

Positive Factors

Omnichannel Strategy

Williams-Sonoma's omnichannel approach enhances customer reach and flexibility, supporting sustained revenue growth by integrating retail, e-commerce, and catalog sales.

AI Integration

AI integration improves operational efficiency and customer service, driving cost savings and productivity gains, which are crucial for long-term competitiveness.

Financial Flexibility

Enhanced financial flexibility through credit agreement amendments supports growth objectives and provides a buffer against economic uncertainties.

Negative Factors

Tariff Challenges

Rising tariffs increase costs, pressuring margins and potentially impacting pricing strategy, which could affect competitiveness and profitability.

Macroeconomic Uncertainty

Economic uncertainties, including housing market weakness and high interest rates, may dampen consumer spending, affecting sales and growth prospects.

Flat Operating Margin Guidance

Unchanged operating margin guidance amid rising tariffs suggests limited ability to pass costs to consumers, potentially squeezing profitability.

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

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 exhibits strong financial health with robust profitability, efficient cash flow management, and a stable balance sheet. The company has effectively managed its operations and finances, positioning itself well within the specialty retail industry. While leverage is moderate, the high return on equity and consistent cash flow generation underscore its financial strength.

Income Statement

Williams-Sonoma demonstrates strong profitability with a consistent gross profit margin around 45% and a net profit margin exceeding 14% in the TTM. The company has shown resilience with a positive revenue growth rate in the latest TTM, recovering from a slight decline in the previous annual period. EBIT and EBITDA margins are robust, indicating effective cost management and operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio under 0.65, suggesting moderate leverage. Return on equity is impressive at over 53% in the TTM, indicating strong profitability relative to shareholder equity. The equity ratio is healthy, showing a balanced asset structure.

Cash Flow

Cash flow analysis reveals strong free cash flow growth in the TTM, with a free cash flow to net income ratio close to 0.80, indicating efficient cash generation relative to earnings. Operating cash flow to net income ratio is also solid, reflecting good cash conversion from operations.

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	1.67B	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: 198.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 198.25 is above the 20-day moving average (MA) of 197.89, above the 50-day MA of 192.74, and above the 200-day MA of 179.51, indicating a bullish trend. The MACD of 1.47 indicates Positive momentum. The RSI at 51.54 is Neutral, neither overbought nor oversold. The STOCH value of 38.48 is Neutral, 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	76 Outperform	$23.95B	21.61	51.75%	1.24%	3.28%	9.29%
BBY	69 Neutral	15.18B	20.32	28.65%	5.25%	-2.21%	-37.30%
BBWI	63 Neutral	5.17B	7.82	-47.03%	3.19%	-0.18%	-18.95%
ETSY	59 Neutral	6.44B	51.98	-14.58%	―	2.38%	-38.88%
W	57 Neutral	11.58B	-37.23	17.86%	―	0.87%	54.67%
RH	53 Neutral	4.21B	41.79	-261.20%	―	9.56%	205.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

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.