Company-wide Comparable Sales Growth
Q1 comparable sales (comp) grew 4.8%, with both 1-year and 2-year comps accelerating; net revenues were $1.81 billion and every brand delivered a positive comp in the quarter.
Williams-Sonoma
· WSM
May 21st, 2026
Summary
- Earnings Call Date:
- 2026-05-21
- Change Since:
- +22.78%
- Next Earnings Date:
- 2026-08-26
Earnings Call Sentiment
PositiveThe call emphasized broad-based, profitable top-line momentum with every brand posting positive comps, strong B2B growth, significant supply chain offsets, and meaningful shareholder returns. Headwinds from tariffs, higher fuel costs and an inventory build with embedded tariff costs pressured merchandise margins and produced a cautious posture on guidance (no raise). Overall the company presented strong execution and confidence while acknowledging near-term macro and tariff risks.
Company Guidance
The company reiterated fiscal 2026 guidance: comparable (brand) revenue growth of 2%–6% (midpoint 4%) and total net revenue growth of 2.7%–6.7%, with operating margin guided to 17.5%–18.1% (midpoint 17.8%); the outlook assumes no meaningful housing recovery, tariffs in place (front‑half weighted, no tariff refunds assumed), and higher oil prices at current levels embedded. Additional modeling inputs include full‑year interest income of ~$25 million, an effective tax rate of ~25.5%, and capital expenditures of ~$275 million (≈95% focused on e‑commerce, retail and supply chain); guidance also embeds ~70 basis points of non‑comp revenue from retail investments, a year‑end store count essentially flat to last year (then 1%–3% annual growth from FY27), and a long‑term outlook of mid‑to‑high single‑digit revenue growth with operating margins in the mid‑to‑high teens. The company reiterated its capital return priorities (quarterly dividend $0.76/share, +15% YoY; ~$1.1 billion remaining repurchase authorization) after returning $373 million in Q1 ($288M buybacks, ~1.4% of shares; $85M dividends).
Operating Margin and EPS Outperformance
Delivered operating margin of 16.2% (ahead of expectations) and diluted EPS of $1.93, up 4% versus $1.85 in the prior year.
Strong Brand-Level Performance
West Elm comp +8.5%; Williams Sonoma comp +5%; Pottery Barn +1%; Pottery Barn Kids +4.5%; Rejuvenation and Mark and Graham posted double-digit comps; launched Dormify as a 10th brand and opened GreenRow's first store.
Balanced Channel Strength and Market Share Gains
E-commerce comp +4.8% and retail comp +4.7%; accelerated market share gains while the home furnishings market declined low single digits.
B2B and Contract Momentum
B2B grew 13.7% overall with trade up 9% and contract up 22%; delivered marquee projects (e.g., Delano Miami, Bernardus Resort) and received industry recognition at Hospitality Design Expo.
Supply Chain Efficiencies Partially Offsetting Cost Headwinds
Supply chain improvements (including lower shrink accrual) delivered approx. 50 basis points of gross margin benefit this quarter, helping offset higher tariffs and fuel costs.
Capital Allocation and Shareholder Returns
Returned $373 million to shareholders in Q1 (share repurchases $288M representing ~1.4% of shares outstanding; dividends $85M, a 15% YoY increase); about $1.1B remaining share repurchase authorization; Q1 capex $58M with FY26 capex guidance ~$275M.
Investments in Customer Experience and AI
Scaled personalization and AI across the customer journey (e.g., AI-driven room planner/design tools), optimized shopping/checkout and customer care automation to improve discovery and service.
Operator
Welcome to the Williams Sonoma Inc. First Quarter 26 Earnings Conference Call. A question-and-answer session will follow the conclusion of the prepared remarks. I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead.
Jeremy Brooks
Good morning, and thank you for joining our first quarter earnings call. Before we get started, I would like to remind you that during this call, we will make forward-looking statements. With respect to future events and financial performance. Including our annual guidance for fiscal 26 and our long term outlook. We believe these statements reflect our best estimates. However, we cannot make any assurances that these statements will materialize. And actual results may differ significantly from our expectations. The company undertakes no obligation to publicly update or revise any of these statements to reflect events or circumstances that may arise after today's call.
Additionally, we will refer to certain non GAAP financial measures. These measures should not be considered replacements for and should be read together with our GAAP results. This call should also be considered in conjunction with our filings with the SEC Finally, a replay of the call will be available on our Investor Relations website. Now I would like to turn the call over to Laura J. Alber, our president and chief executive officer.
Laura J. Alber
Thank you, Jeremy. Good morning, everyone, and thank you for joining the call. We are off to a strong start in fiscal 26. In Q1, our comp came in at 4.8%, reflecting strong execution across o...
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