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what it is
Williams-Sonoma sells home goods through Pottery Barn, West Elm, and its own stores and website.
how it gets paid
Last year Williams-Sonoma made $7.7B in revenue. Pottery Barn was the main engine at $3.2B, or 41% of sales.
why growth slowed
Revenue fell 0.5% last year. The broader assumption that macroeconomic conditions will stabilize means that growth should resume in fiscal 2026 as tariff pressures ease and pricing and sourcing adjustments.
what just happened
Williams-Sonoma posted $5.4B of revenue, $5.82 EPS, and 45.8% gross margin in the latest quarter.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
70/100 earnings predictability — reasonably predictable
23.3x trailing p/e — priced about right
1.4% dividend yield — cash in your pocket every quarter
21.0% return on capital — every dollar works hard here
xvary composite: 70/100 — average
What they do
Williams-Sonoma sells home goods through Pottery Barn, West Elm, and its own stores and website.
Omnichannel → stores plus website → so what: your cart follows you across both. Pottery Barn alone is 41% of revenue, and West Elm adds 24%. You are buying five brands, not one store, so leaving means replacing your room, registry, and repeat buys.
How they make money
$7.7B
annual revenue · their business grew -0.5% last year
Pottery Barn
$3.2B
West Elm
$1.8B
Williams Sonoma
$1.2B
Pottery Barn Kids and Teen
$1.1B
Other
$0.4B
The products that matter
flagship home furnishings brand
Pottery Barn
$3.2B · 41% of revenue
it's the largest business inside the company at $3.2B, so any slowdown in big-ticket furniture demand shows up here first.
41% of sales
modern design brand
West Elm
$1.8B · 24% of revenue
this is a $1.8B brand and nearly one-quarter of company revenue, which makes it too large to be a side story and too small to carry the whole company.
24% of sales
kitchen and registry traffic driver
Williams Sonoma
$1.2B · 16% of revenue
at $1.2B, the namesake brand still matters, but it's a smaller earnings lever than the furniture banners.
16% of sales
Key numbers
$9.45
fy2027 eps est
$8B
fy2027 rev est
23.3x
trailing p/e
1.4%
dividend yield
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- net profit margin 13.7% — keeps 14 cents of every dollar in revenue
- return on equity 21% — $0.21 profit for every $1 investors have put in
A+ — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in WSM 3 years ago → it's now worth $34,470.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Williams-Sonoma posted $5.4B of revenue, $5.82 EPS, and 45.8% gross margin in the latest quarter.
The quarter shows strong pricing and cost control. Gross margin at 45.8% is the number that keeps the model working when tariffs get louder.
$5.4B
revenue
$5.82
eps
45.8%
gross margin
the number that mattered
45.8% gross margin mattered because it shows the company still has room to absorb tariff pressure.
-
the incremental tariff rate was reportedly more than doubling to 29% in the january interim.these higher duties will begin to fully flow through margins as front-loaded inventory benefits fade.
-
sg&a will also run higher due to incentive compensation and stepped-up digital advertising.
-
housing turnover remains historically low, limiting large-ticket demand.
-
these factors will probably make for underwhelming operating results in the fourth quarter.
-
while these headwinds may continue in fiscal 2026, we expect growth to gain momentum.the broader assumption that macroeconomic conditions will stabilize means that growth should resume in fiscal 2026 as tariff pressures ease and pricing and sourcing adjustments lend margin support. demand should benefit from more favorable housing activity, improving consumer confidence, and easier comparisons. what’s more williams-sonoma’s strong brand positions, expanded product innovation and increased digital reach should support share gains. cost discipline and improved freight and supply chain efficiencies should further lift profitability, enabling a return to steady sales and earnings growth.
source: company earnings report, 2026
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What could go wrong
the top threat is tariff-driven margin compression on imported home furnishings.
high
tariff cost inflation
the incremental tariff rate reportedly more than doubled to 29% in january. for a business sourcing roughly 60–70% of products internationally, that is a direct hit to merchandise cost.
if management cannot offset those costs, the current premium margin structure gets squeezed fast.
med
housing market stagnation
housing turnover remains historically low, and that matters because furniture demand follows moves, remodels, and life events. fewer transactions usually mean fewer large-ticket orders.
Pottery Barn alone is 41% of revenue, so a soft furniture cycle is not a side issue.
med
cost creep
SG&A is running higher because of incentive compensation and stepped-up digital advertising. if demand stays merely okay, those costs become a margin problem.
a 14.0% net profit margin is strong. it also gives the market something very obvious to punish if it slips.
WSM is a strong business, but the risk stack is simple: imported goods cost more, selling them costs more, and the customer backdrop is not helping.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
tariffs versus pricing power
29% interim tariffs and 60–70% international sourcing is the cleanest read on whether margins are temporary pressure or a new reality.
metric
EPS progression above $9.00
the stock can live with a premium multiple if earnings move clearly above the FY2026 $9.00 estimate. if not, valuation starts doing the talking.
earnings
next margin commentary
listen for how management talks about freight, sourcing, and ad spend. the quarter was fine. the guidance language matters more now.
trend
housing activity
WSM does not need a housing boom, but it does need something better than historically low turnover if big-ticket furniture demand is going to reaccelerate.
Analyst rankings
short-term outlook
average
outlook rank 3 — in human-speak, analysts see a stock behaving like the market, not one with a strong near-term signal.
risk profile
average
risk rank 3 — this is not a bunker stock, but it is not a balance-sheet accident either.
chart momentum
average
momentum rank 3 — no technical fireworks here. the chart is waiting for the fundamentals to make the next argument.
earnings predictability
70 / 100
70 / 100 means the business is readable, but not clean enough to remove surprises. that's normal for premium retail.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 332 buyers vs. 364 sellers in 4q2025. total institutional holdings: 0.1B shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$150
$336
$201
current price
$243
target midpoint · +21% from current · 3-5yr high: $336
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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