Kitchenware and home goods retailer Williams-Sonoma (NYSE: WSM) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 2.7% year on year to $1.84 billion. Its GAAP profit of $2 per share was 11.4% above analysts’ consensus estimates.

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Company Overview

Started in 1956 as a store specializing in French cookware, Williams-Sonoma (NYSE: WSM) is a specialty retailer of higher-end kitchenware, home goods, and furniture.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $7.83 billion in revenue over the past 12 months, Williams-Sonoma is a mid-sized retailer, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Williams-Sonoma’s sales grew at a tepid 5.1% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it closed stores.

This quarter, Williams-Sonoma grew its revenue by 2.7% year on year, and its $1.84 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last six years. This projection is underwhelming and suggests its products will face some demand challenges.

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Store Performance

Number of Stores

A retailer’s store count influences how much it can sell and how quickly revenue can grow.

Williams-Sonoma listed 509 locations in the latest quarter and has generally closed its stores over the last two years, averaging 2% annual declines.

When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability.

Same-Store Sales

The change in a company's store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales provides a deeper understanding of this issue because it measures organic growth at brick-and-mortar shops for at least a year.

Williams-Sonoma’s demand has been shrinking over the last two years as its same-store sales have averaged 2.8% annual declines. This performance isn’t ideal, and Williams-Sonoma is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales).

In the latest quarter, Williams-Sonoma’s same-store sales rose 3.7% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Key Takeaways from Williams-Sonoma’s Q2 Results

We were impressed by how significantly Williams-Sonoma blew past analysts’ earnings expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 2.7% to $203 immediately after reporting.

Indeed, Williams-Sonoma had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.