01—Abstract
Summary
Summary of the 10-Q filed May 28, 2025. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported net revenues of $1.73 billiona for the thirteen weeks ended May 4, 2025, up from $1.66 billion in the prior-year quarter, with company comparable brand revenue growth of 3.4%.
Gross profit declined to $765.8 millionb from $795.2 million, with gross margin falling to 44.3% from 47.9%; the filing attributes the decline mainly to the prior-year out-of-period freight adjustment, lower merchandise margins from higher input costs, ocean freight and tariff mitigation costs, partially offset by supply chain efficiencies. SG&A fell to $475.1 million (27.5% of net revenues from 28.8%), and operating income was $290.7 million versus $317.1 million. Diluted earnings per share were $1.85, compared with $1.99 a year earlier, which included a $0.29 per share benefit from the out-of-period freight adjustment.
Net earnings were $231.3 millionc versus $260.4 million. Cash and cash equivalents totaled $1.05 billion at quarter end, with no borrowings under the $500 million revolving Credit Facility. Operating cash flow was $118.9 million, down from $226.8 million, and capital expenditures were $58.3 million.
The company returned $164.6 milliond to stockholders through repurchases of $90.0 million and dividends of $74.7 million. Repurchases covered 599,191 shares at an average cost of $150.15, and about $1.1 billion of total repurchase authorization remained. The quarterly cash dividend was raised 16%, from $0.57 to $0.66 per share.
Management lists its priorities as returning to growth, elevating customer service and driving earnings, and cites an uncertain macroeconomic environment, including evolving tariff and trade policy, a weak housing market, elevated interest rates and inflationary pressure, as risks to the business. The filing notes no material changes to risk factors from the fiscal 2024 Form 10-K.
02—Key points
Key Highlights
- Net revenues rose $69.8 million, or 4.2%, to $1.73 billion, with company comparable brand revenue growth of 3.4%.
- Gross margin declined to 44.3% from 47.9%, a 360 basis point decrease that includes 300 basis points from the prior-year out-of-period freight adjustment and 220 basis points from lower merchandise margins.
- Diluted EPS was $1.85 versus $1.99 a year earlier; the prior-year figure included a $0.29 per share benefit from the out-of-period freight adjustment.
- Operating income fell to $290.7 million from $317.1 million, while SG&A improved to 27.5% of net revenues from 28.8%.
- Operating cash flow was $118.9 million, down from $226.8 million, mainly due to lower net earnings adjusted for non-cash items, higher inventory spending and lower accrued expenses.
- Cash of $1.05 billion and no borrowings under the $500 million revolver; $164.6 million returned to stockholders through buybacks and dividends.
- The quarterly dividend was increased 16%, from $0.57 to $0.66 per share, and about $1.1 billion of repurchase authorization remained.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Williams-Sonoma kept $0.13.
- Revenue$1.73B100.0%
- Cost of revenue−$964.3M55.7%
- Gross profit$765.8M44.3%
- Operating costs−$475.1M27.5%
- Operating income$290.7M16.8%
- Interest, other & tax−$59.5M3.4%
- Net income$231.3M13.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 28, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.73B$1.66B | +4.2% |
| Cost of Revenue | $964.30M— | — |
| Gross Profit | $765.81M$795.17M | −3.7% |
| SG&A Expenses | $475.10M$478.06M | −0.6% |
| Operating Income | $290.71M$317.11M | −8.3% |
| Net Income | $231.26M$260.42M | −11.2% |
| EPS (Basic) | $1.88$2.03 | −7.4% |
| EPS (Diluted) | $1.85$1.99 | −7.0% |
| Shares Outstanding (Basic) | 123.11M128.41M | −4.1% |
| Shares Outstanding (Diluted) | 124.79M130.63M | −4.5% |
05—Questions
Frequently Asked Questions
How did Williams-Sonoma's brands perform in the first quarter of fiscal 2025?
Pottery Barn comparable brand revenue grew 2.0%, Pottery Barn Kids and Teen grew 3.8%, West Elm grew 0.2%, and Williams Sonoma grew 7.3%. Emerging brands Rejuvenation, Mark and Graham, and GreenRow delivered double-digit comparable brand revenue growth combined.
Why did gross margin decline in the quarter?
The filing attributes the 360 basis point decline to the prior-year out-of-period freight adjustment (300 basis points) and lower merchandise margins (220 basis points) from higher input costs, including ocean freight and tariff mitigation costs. These were partly offset by supply chain efficiencies (120 basis points) and occupancy cost leverage (40 basis points).
Is the company's liquidity position strong?
The company held $1.05 billion in cash and cash equivalents, had no outstanding borrowings under its $500 million Credit Facility, and was in compliance with its financial covenants. Management believes cash, operating cash flows and available credit will provide adequate liquidity for the next 12 months.
What did the company do with capital in the quarter?
Williams-Sonoma invested $58.3 million in capital expenditures and returned $164.6 million to stockholders through $90.0 million of share repurchases and $74.7 million of dividend payments. The quarterly dividend was raised to $0.66 per share from $0.57.
What risks does management highlight going forward?
Management cites the uncertain macroeconomic environment, including the evolving tariff and trade policy landscape, a weak housing market, elevated interest rates, layoffs, inflationary pressure, economic uncertainty and global geopolitical instability, as factors that could negatively affect the business. The filing states there were no material changes to risk factors from the fiscal 2024 Form 10-K.
06—Continue