Williams-Sonoma Reports Strong Q1 2025 Results, Reaffirms Full-Year Outlook Despite Tariff Headwinds

Williams-Sonoma, Inc. (NYSE: WSM) announced solid first quarter fiscal 2025 results, with strong profitability and better-than-expected revenue growth, while reaffirming its full-year guidance.

Q1 2025 Highlights:
• Comparable brand revenue growth: +3.4%
• Net revenues: $1.73 billion, up 4.2% year-over-year
• Operating margin: 16.8%
• Diluted EPS: $1.85 (up 8.8% excluding a prior year freight adjustment)
• SG&A expenses: $475 million, or 27.5% of revenues (down 130bps from last year)
• Gross margin: 44.3% (adjusted -60bps YOY after excluding a prior year adjustment)
• Net income: $231 million
• Merchandise inventories: Up 10.3% to $1.3 billion, strategically pulled forward due to tariff concerns
• Cash position: $1.05 billion, despite $165 million returned to shareholders through buybacks and dividends

Brand Performance (Comparable Revenue Growth):
• Williams Sonoma: +7.3%
• Pottery Barn Kids and Teen: +3.8%
• Pottery Barn: +2.0%
• West Elm: +0.2%
• Total: +3.4%
Outlook:
• Full-year FY25 guidance reaffirmed:
o Net revenue range: -1.5% to +1.5%
o Comparable sales: flat to +3.0%
o Operating margin: 17.4% to 17.8%
• Guidance incorporates significant tariff impacts (30% on China, 25% on Mexico/Canada/steel/aluminum, 10% global reciprocal tariffs)
• Long-term goals remain unchanged: mid-to-high single-digit annual revenue growth and operating margins in the mid-to-high teens

Additional Notes:
• Q1 results include a retrospective adjustment from FY24 related to over-recognized freight expenses totaling $49 million, which impacted prior year comparables.
• A 2-for-1 stock split took effect on July 9, 2024; all share data reflects the split.
• The company ended Q1 with 508 stores, a net reduction of four locations during the quarter.

CEO Laura Alber cited strong performance across all brands and reaffirmed confidence in the company’s ability to adapt amid ongoing macroeconomic uncertainty.