Williams-Sonoma’s third quarter saw positive sales momentum and margin stability, yet the market reacted negatively following the company’s results. Management highlighted that growth was supported by strength in Furniture, back-to-school categories, and improved in-store experiences across all brands. CEO Laura Alber credited the success of new store remodels and enhanced customer service, saying the company “delivered strong results in 2025, with an accelerating positive top-line comp and continued outperformance in our profitability.” Management also pointed to effective tariff mitigation and supply chain efficiencies as key contributors to operating margin stability, despite ongoing macro headwinds.
Is now the time to buy WSM? Find out in our full research report (it’s free for active Edge members).
Williams-Sonoma (WSM) Q3 CY2025 Highlights:
- Revenue: $1.88 billion vs analyst estimates of $1.87 billion (4.6% year-on-year growth, 0.6% beat)
- Adjusted EPS: $1.96 vs analyst estimates of $1.87 (4.7% beat)
- Adjusted EBITDA: $376.7 million vs analyst estimates of $368.8 million (20% margin, 2.1% beat)
- Operating Margin: 17%, in line with the same quarter last year
- Locations: 513 at quarter end, down from 525 in the same quarter last year
- Same-Store Sales rose 4% year on year (-2.9% in the same quarter last year)
- Market Capitalization: $21.62 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Williams-Sonoma’s Q3 Earnings Call
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Max Rakhlenko (TD Cowen): Asked about price elasticity and its impact on transactions versus ticket growth. CEO Laura Alber responded that pricing power varies by category and is bolstered by exclusive products and enhanced service, noting, “Pricing is not just about the product itself, but also the service and the experience.”
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Peter Benedict (Baird): Questioned the company’s ability to maintain operating margins amid higher tariffs and inquired about the shift in unit growth strategy. CFO Jeff Howie cited the unpredictability of tariffs and emphasized that mitigation efforts are embedded in guidance, while store count changes will remain modest as repositioning continues.
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Cristina Fernandez (Telsey Advisory Group): Probed the wide range in Q4 revenue guidance and comp trends. CEO Laura Alber attributed this to a disciplined approach to promotions and the challenge of comparing to a strong prior year holiday season.
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Simeon Gutman (Morgan Stanley): Challenged the durability of tariff mitigation and whether industry prices might adjust if tariffs are repealed. Alber reiterated that while offsets have been effective, the Q4 margin impact will be greater and the company will adapt pricing as needed.
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Steven Zaccone (Citigroup): Inquired about Pottery Barn’s performance and competitive dynamics. Alber noted improved furniture sales, fewer promotions, and ongoing work to optimize category performance against competitors.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace and measurable impact of AI-driven efficiencies on both cost structure and customer experience, (2) the company’s ability to sustain retail channel outperformance through continued store refreshes and targeted expansions, and (3) any changes in tariff policy or housing market trends that could affect sales and margin trajectory. Execution on store repositioning and emerging brand growth will also be key indicators.
Williams-Sonoma currently trades at $179.61, in line with $180.75 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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