01—Abstract
Summary
Summary of the 10-Q filed May 22, 2026. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported net revenues of $1.81 billiona for the first quarter of fiscal 2026 (13 weeks ended May 3, 2026), up from $1.73 billion a year earlier, driven by company comparable brand revenue growth of $78.6 million, or 4.8%.
Gross margin declined to 44.0% from 44.3%, mainly from tariffs flowing into cost of goods sold, and SG&A rose to 27.8% of net revenues from 27.5%. Operating income was $291.7 millionb versus $290.7 million, and diluted earnings per share rose to $1.93 from $1.85. Net earnings were $231.4 million, essentially flat with the prior year.
The company generated $156.3 millionc of operating cash flow and ended the quarter with $651.6 million in cash and cash equivalents and no borrowings under its $600 million revolving credit facility. It returned $373.4 million to stockholders through repurchases of $287.8 million and dividends of $85.6 million, and the quarterly dividend was raised 15% to $0.76 per share. Remaining authorization under the stock repurchase program was approximately $1.1 billion.
The company filed for refunds of $197.8 milliond in IEEPA tariffs on April 20, 2026, but has not recorded any receivable for them because collection is not yet probable. Management cites an uncertain macroeconomic environment and continued tariff uncertainty for fiscal 2026. Total stockholders' equity fell to $1.87 billion from $2.08 billion at fiscal year-end, largely reflecting share repurchases and dividends.
02—Key points
Key Highlights
- Net revenues rose $75.3 million, or 4.4%, to $1,805.5 million, with company comparable brand revenue growth of 4.8%.
- Gross margin decreased to 44.0% from 44.3%, reflecting a 100 basis point hit from tariffs flowing into cost of goods sold, partly offset by 50 basis points of supply chain efficiencies.
- Diluted EPS increased to $1.93 from $1.85, while net earnings were $231.4 million compared with $231.3 million a year earlier.
- Stock repurchases totaled $287.8 million at an average cost of $178.96 per share, and $1.1 billion of repurchase authorization remained.
- The quarterly cash dividend was increased 15%, from $0.66 to $0.76 per share.
- Potential benefit of $197.8 million in IEEPA tariff refunds filed April 20, 2026, is not recorded in the financial statements.
- Pottery Barn comparable brand revenue grew 1.0%, West Elm 8.5%, Williams Sonoma 5.0%, and Pottery Barn Kids and Teen 4.5%; the Pottery Barn President departed and Jennifer Kellor was named successor.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2027, Williams-Sonoma kept $0.13.
- Revenue$1.81B100.0%
- Cost of revenue−$1.01B56.1%
- Gross profit$793.4M43.9%
- Operating costs−$501.7M27.8%
- Operating income$291.7M16.2%
- Interest, other & tax−$60.3M3.3%
- Net income$231.4M12.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2027filed May 22, 2026Financial Statements
Q1 FY2027 against Q1 FY2026
| Line item | Q1 FY2027Q1 FY2026 | Change |
|---|---|---|
| Revenue | $1.81B$1.73B | +4.4% |
| Cost of Revenue | $1.01B$964.30M | +4.9% |
| Gross Profit | $793.43M$765.81M | +3.6% |
| SG&A Expenses | $501.74M$475.10M | +5.6% |
| Operating Income | $291.69M$290.71M | +0.3% |
| Net Income | $231.36M$231.26M | 0.0% |
| EPS (Basic) | $1.95$1.88 | +3.7% |
| EPS (Diluted) | $1.93$1.85 | +4.3% |
| Shares Outstanding (Basic) | 118.39M123.11M | −3.8% |
| Shares Outstanding (Diluted) | 119.89M124.79M | −3.9% |
05—Questions
Frequently Asked Questions
How did Williams-Sonoma perform in the first quarter of fiscal 2026?
Net revenues increased 4.4% to $1.81 billion, and diluted EPS rose to $1.93 from $1.85. Operating income was $291.7 million, roughly flat with $290.7 million a year earlier, as higher gross profit was offset by higher SG&A expenses.
What drove the change in gross margin?
Gross margin fell to 44.0% from 44.3%. The filing attributes a 100 basis point decrease to lower merchandise margins from tariffs flowing into cost of goods sold, partially offset by 50 basis points of supply chain efficiencies, including a lower shrink accrual, and 20 basis points of occupancy cost leverage.
How much cash did the company return to shareholders and how much liquidity does it have?
The company returned $373.4 million through $287.8 million of stock repurchases and $85.6 million of dividends. It held $651.6 million in cash and cash equivalents and had no borrowings under its $600 million revolving credit facility as of May 3, 2026.
What is the status of the tariff refund claim?
The company filed on April 20, 2026 for refunds of $197.8 million in IEEPA tariffs. Because collection was not yet considered probable, no receivable was recorded, and the benefit will be recognized in cost of goods sold when collection is deemed probable.
Were there any leadership changes disclosed?
Monica Bhargava, a named executive officer and President of the Pottery Barn brand, departed effective May 21, 2026. Jennifer Kellor was named President of Pottery Barn. Ms. Bhargava's separation agreement includes cash payments of $1,571,400 and accelerated vesting of certain equity awards.
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