Williams-Sonoma Announces Operating Results for First Quarter

May 21, 2026  by Karen Parrish in Business Strategy, Industry   

“We are off to a strong start in 2026. In Q1, our comp came in at 4.8%, and we delivered an operating margin of 16.2% with earnings per share of $1.93. Every brand delivered a positive comp in the quarter, driven by the strength of our portfolio, our channels, and our teams,” said Laura Alber, president and CEO.

Alber concluded, “We continue to outperform on both the top and bottom lines. We are delivering compounding results year-after-year despite the cyclical swings of the housing market and other macroeconomic events. We believe our strong brands, our proven ability to execute our vision, and our relentless focus on customer service will allow us to accomplish our goals in 2026 and beyond.”

FIRST QUARTER 2026 HIGHLIGHTS

- Comparable brand revenue +4.8%.

- Gross margin of 44.0% -30bps to LY driven by (i) lower merchandise margins of -100bps, partially offset by (ii) supply chain efficiencies of +50bps and (iii) occupancy leverage of +20bps. Occupancy costs of $204 million, +3.0% to LY.

- SG&A rate of 27.8% +30bps to LY driven by (i) higher employment expense of +30bps and (ii) higher general expenses of +10bps, partially offset by (iii) advertising expense leverage of -10bps. SG&A of $502 million, +5.6% to LY.

- Operating income of $292 million with an operating margin of 16.2%. -60bps to LY.

- Diluted EPS of $1.93 per share. +4.3% to LY.

- Merchandise inventories +9.0% to the first quarter LY to $1.46 billion, including incremental tariff costs of approximately $60 million.

- Maintained strong liquidity position of $652 million in cash and $156 million in operating cash flow enabling the company to deliver returns to stockholders of $373 million through $288 million in stock repurchases and $85 million in dividends.

OUTLOOK

- We are reiterating our fiscal 2026 and long-term guidance.

- In fiscal 2026, we expect annual net revenues in the range of +2.7% to +6.7%, with comps in the range of +2.0% to +6.0%; and an operating margin between 17.5% to 18.1%.

- Our guidance assumes (i) oil prices will remain elevated for fiscal 2026, (ii) no refund of tariffs paid, (iii) the impact of tariffs will be front-loaded in the first half of fiscal 2026 as the tariffs flow through our weighted average cost of goods sold, and (iv) all tariff rates currently in place remain for fiscal 2026, including the Section 232 tariffs, the current Section 301 tariffs and the Section 122 tariffs.

- For fiscal 2026, we expect annual interest income to be approximately $25 million and our effective tax rate to be approximately 25.5%.

- Over the long term, we continue to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens.

CONFERENCE CALL AND WEBCAST INFORMATION

Williams-Sonoma, Inc. will host a live conference call today, May 21, 2026, at 7:00 A.M. (PT). The call will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.