Williams-Sonoma CEO says next quarter will see a bigger tariff impact

Core Insights - Williams-Sonoma's CEO Laura Alber provided an update on the impact of tariffs on the company's business, indicating that the next quarter will experience a more significant effect due to a larger percentage of inventory being subject to tariffs [1][2] - The company reported better-than-expected earnings but noted that the impact of tariffs on gross margins is taking longer to materialize than anticipated [1] - Shares of Williams-Sonoma closed down 3.39% following the announcement [1] Tariff Impact - Alber expressed hope for stability and predictability regarding tariffs by the end of the year, suggesting that they are unlikely to increase further [2] - The company is facing a greater impact in Q4 compared to Q3 as a larger portion of its inventory is now affected by tariffs [2] Mitigation Strategies - Williams-Sonoma is actively working to mitigate losses from tariffs by renegotiating vendor deals and reducing reliance on certain countries, particularly China [2] - The company is increasing domestic manufacturing, with a significant portion of its upholstered furniture already produced in Mississippi and North Carolina [2] Pricing Strategy - The company is "carefully increasing prices" and reviewing areas where products are underpriced, while also substantially reducing promotions to improve regular price selling [3] - Alber indicated that once tariffs are fully integrated into the cost structure, the company will move forward and focus on growth, viewing the situation as more short-term than long-term [3]