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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on WSM

Williams-Sonoma's recent performance faces challenges due to macro headwinds and sluggish housing market conditions. Despite strong execution, with broad-based comp growth and margin expansion, concerns linger about the sustainability of demand. The company's pricing power and brand resilience are notable, but sales growth appears largely driven by price rather than volume. Additionally, rising tariffs pose a challenge, although its diversified model supports growth. Ahead of its Q3 earnings release, analysts revise forecasts, expecting potentially lower earnings.

1.c. Company Highlights

2. Williams-Sonoma's Q3 Earnings Shine with 4% Comp Growth and Margin Expansion

Williams-Sonoma, Inc. reported a strong third quarter of 2025, with net revenue reaching $1.88 billion and earnings per share (EPS) of $1.96, representing a 5% year-over-year growth. The company's operating margin expanded by 10 basis points to 17%. The EPS beat analyst estimates of $1.87, coming in at $1.96. The company's gross margin stood at 46.1%, a 70 basis point increase from the previous year, driven by higher merchandise margins and supply chain efficiencies.

Publication Date: Nov -20

📋 Highlights
  • Strong Q3 Performance:: 4% comp growth, $1.88B net revenue, and $1.96 EPS (5% YoY growth), with operating margin expanding 10 bps to 17%.
  • Retail Channel Growth:: 8.5% comp increase driven by 14 remodeled/repositioned stores (7 more planned in Q4) and improved in-store experiences.
  • Gross Margin Expansion:: 46.1% gross margin (+70 bps YoY) from higher merchandise margins and supply chain efficiencies, offsetting tariff headwinds.
  • Guidance Update:: Full-year operating margin raised to 17.8–18.1% (40 bps increase), with comp growth guidance maintained at 2–5%.
  • Emerging Brands & B2B Growth:: Double-digit comp growth in Rejuvenation, Mark & Graham, and GreenRow; B2B business up 9% driven by trade and contracts.

Segment Performance

The retail channel was a significant contributor to the company's success, with an 8.5% comp growth in Q3, driven by improvements in in-store experience, inventory availability, and design services. The company's brands, including Pottery Barn, West Elm, and Williams-Sonoma, all delivered positive comps, with notable strength in furniture, Dorm, and back-to-school categories. Emerging brands, such as Rejuvenation, Mark and Graham, and GreenRow, continued to perform exceptionally well, with double-digit comp growth.

Tariff Mitigation and Supply Chain Efforts

The company has been actively managing the impact of tariffs through its 6-point mitigation plan, which has more than offset the headwinds. The company noted that the tariff landscape has been volatile, with an incremental tariff rate of 29% today, up from 14% earlier in the year. Williams-Sonoma believes its efforts enable it to mitigate a large portion of the tariffs, which is embedded in its guidance. The company has also made significant improvements to its supply chain, which is expected to be a key factor in its success going forward.

Guidance and Valuation

The company is reiterating its outlook for the full year comparable brand revenue growth to be in the range of 2% to 5% and has raised its bottom line guidance to an operating margin of 17.8% to 18.1%. With a current P/E Ratio of 19.18 and an ROE of 51.88%, the company's valuation appears reasonable, considering its growth prospects. Analysts estimate next year's revenue growth at 3.1%, indicating a stable outlook.

Operational Highlights

The company's e-commerce business has seen significant growth, and its new distribution center, AZ DC, is performing well, which will help improve its supply chain and deliver products more smoothly and on time. The company is also leveraging AI initiatives, including AI-powered customer service automation, to drive sales, engagement, and loyalty while reducing costs.

3. NewsRoom

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Williams-Sonoma, Inc. $WSM Holdings Raised by Fisher Asset Management LLC

Dec -04

Source: defenseworld.net

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BLI Banque de Luxembourg Investments Acquires Shares of 14,900 Williams-Sonoma, Inc. $WSM

Dec -01

Source: defenseworld.net

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1,410 Shares in Williams-Sonoma, Inc. $WSM Bought by Berry Wealth Group LP

Nov -29

Source: defenseworld.net

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Ameritas Investment Partners Inc. Has $1.58 Million Stock Holdings in Williams-Sonoma, Inc. $WSM

Nov -27

Source: defenseworld.net

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Wall Street Loves Williams-Sonoma Right Now—Here's Why the Stock Could Soar in 2026

Nov -23

Source: marketbeat.com

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Williams-Sonoma's Tariff Bill Is Set To Jump, Analyst Warns

Nov -20

Source: benzinga.com

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Williams-Sonoma CEO says next quarter will see a bigger tariff impact

Nov -19

Source: cnbc.com

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Williams-Sonoma Inc (WSM) Q3 2025 Earnings Call Highlights: Strong Growth Amid Tariff Challenges

Nov -19

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.54%)

6. Segments

Pottery Barn

Expected Growth: 4.83%

Pottery Barn's 4.83% growth is driven by its strong brand recognition, successful e-commerce platform, and strategic marketing efforts. Additionally, the company's focus on home furnishings and decor, which are less discretionary, has helped it navigate economic uncertainty. Furthermore, Williams-Sonoma's omnichannel approach and investments in digital capabilities have enhanced the customer experience, contributing to the segment's growth.

West Elm

Expected Growth: 7.88%

West Elm's 7.88% growth is driven by its strong brand reputation, increasing demand for modern home furnishings, and successful e-commerce platform. Additionally, the brand's focus on sustainability, quality, and customer experience has led to increased customer loyalty and retention, contributing to its growth.

Williams Sonoma

Expected Growth: 4.83%

Williams Sonoma's 4.83% growth is driven by its strong brand reputation, increasing e-commerce sales, and strategic expansion into new markets. The company's focus on experiential retail, loyalty programs, and targeted marketing efforts also contribute to its growth. Additionally, its diversification into new product categories, such as outdoor furniture and cookware, further supports its revenue expansion.

Pottery Barn Kids and Teen

Expected Growth: 4.65%

Strong brand recognition, increasing online presence, and strategic marketing efforts drive Pottery Barn Kids and Teen's 4.65% growth. Additionally, the segment's focus on quality, safety, and style resonates with parents seeking premium children's furniture. Expanding product lines, such as nursery and decor, also contribute to the segment's growth.

Other

Expected Growth: 4.83%

Williams-Sonoma's 4.83% growth in 'Other' segment is driven by increasing demand for e-commerce and digital marketing services, expansion of West Elm and Pottery Barn brands, and strategic investments in supply chain and logistics. Additionally, the company's focus on experiential retail and loyalty programs has contributed to the growth.

7. Detailed Products

Cookware

High-quality pots, pans, and cooking utensils from brands like Le Creuset and All-Clad

Cutlery and Knives

Premium cutlery and knives from brands like Wüsthof and Shun, designed for precision and durability

Dinnerware and Glassware

Elegant dinnerware and glassware from brands like Spode and Riedel, perfect for formal and casual dining

Electrics and Gadgets

Innovative kitchen electrics and gadgets from brands like Breville and Cuisinart, designed to simplify cooking and food preparation

Home Decor and Bedding

Luxurious home decor and bedding products from brands like Pottery Barn and West Elm, designed to enhance the beauty and comfort of any room

Kitchen Electrics and Appliances

High-performance kitchen electrics and appliances from brands like KitchenAid and Sub-Zero, designed for heavy-duty cooking and food preparation

Outdoor and Patio

Stylish and durable outdoor and patio furniture and decor from brands like Williams-Sonoma and Pottery Barn, designed for alfresco dining and entertaining

Tabletop and Bar

Elegant tabletop and barware products from brands like Waterford and Riedel, perfect for formal and casual entertaining

8. Williams-Sonoma, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Williams-Sonoma, Inc. faces moderate threat from substitutes due to the presence of alternative home furnishings and cooking products from other retailers.

Bargaining Power Of Customers

Williams-Sonoma, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and high-quality products limit customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Williams-Sonoma, Inc. relies on a diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for certain products may give them some bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the home furnishings and cooking products market. New entrants would need to invest heavily in brand development, marketing, and distribution networks to compete with established players like Williams-Sonoma, Inc.

Intensity Of Rivalry

The home furnishings and cooking products market is highly competitive, with many established players competing for market share. Williams-Sonoma, Inc. faces intense rivalry from companies like Bed Bath & Beyond, IKEA, and Amazon, which may lead to pricing pressures and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.52%
Debt Cost 3.95%
Equity Weight 60.48%
Equity Cost 12.43%
WACC 9.08%
Leverage 65.35%

11. Quality Control: Williams-Sonoma, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

179.22$

Current Price

179.22$

Potential

-0.00%

Expected Cash-Flows