Williams-Sonoma(WSM) - 2026 Q3 - Quarterly Results

Financial Performance - Q3 comparable brand revenue increased by 4.0%, with an operating margin of 17.0% and diluted EPS of $1.96, reflecting a 4.8% year-over-year growth [2] - The company raised its full-year operating margin guidance to a range of 17.8% to 18.1% [12] - Gross margin improved to 46.1%, up 70 basis points year-over-year, driven by higher merchandise margins and supply chain efficiencies [6] - Q3 2025 net revenues reached $1,882,814, a 4.0% increase from Q3 2024's $1,800,668 [20] - Net earnings for the thirty-nine weeks ended November 2, 2025, were $720,417, slightly up from $714,533 in the same period last year [27] Expenses and Liabilities - Selling, general and administrative (SG&A) expenses increased by 7.0% year-over-year to $549 million, with an SG&A rate of 29.1% [6] - Total liabilities increased to $3,243,423 from $3,159,188 in the previous quarter [23] - Operating lease liabilities decreased to $220,239 from $234,180 in the previous quarter [23] Inventory and Cash Flow - Merchandise inventories rose by 9.6% year-over-year to $1.5 billion, influenced by incremental tariff costs and strategic pull forward of receipts [6] - Merchandise inventories rose to $1,530,896 from $1,332,429 in the previous quarter [23] - Cash and cash equivalents at the end of the period were $884,663, down from $1,212,977 at the beginning of the period [27] - The company maintained a strong liquidity position with $885 million in cash and $316 million in operating cash flow, returning $347 million to stockholders through stock repurchases and dividends [6] Stock Repurchase and Authorizations - A new stock repurchase authorization of $1 billion was approved, effective once the current authorization is fully utilized [5] - The company repurchased common stock worth $555,703 during the financing activities [27] Future Outlook - The company expects annual net revenues for fiscal 2025 to grow between 0.5% and 3.5%, with comparable sales in the range of 2.0% to 5.0% [12] - Long-term expectations include mid-to-high single-digit annual net revenue growth and operating margins in the mid-to-high teens [12] Market Performance - Pottery Barn's comparable brand revenue grew by 1.3% in Q3 2025, while West Elm saw a 3.3% increase [20] - The number of retail stores increased to 513, with 5 openings and 1 closure during the quarter [25] Strategic Focus - The company continues to prioritize innovation, product design, and exceptional customer service to capture additional market share [3]