01—Abstract
Summary
Summary of the 10-Q filed August 28, 2026. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. reported net revenues of $1.96 billiona for the thirteen weeks ended August 2, 2026, up from $1.84 billion in the second quarter of fiscal 2025, with net earnings of $338.1 million and diluted earnings per share of $2.84, compared to $2.00 a year earlier.
Results were materially aided by IEEPA tariff refunds: the company recorded a $167.8 millionb reduction to cost of goods sold for refunds on previously expensed tariffs, plus $6.3 million of related interest income, partly offset by a $47.5 million vendor reimbursement provision and a $10.0 million one-time employee recognition cost. Gross margin rose to 51.6% from 47.1%, with the filing attributing 610 basis points of the increase to tariff refunds net of vendor reimbursements. For the first half of fiscal 2026, net earnings were $569.5 million and diluted EPS was $4.77, versus $3.86.
Company comparable brand revenue grew 6.2% in the quarter and 5.5% in the first half, with e-commerce comp growth of 6.5% and retail comp growth of 5.5% in the quarter. Net cash provided by operating activities was $695.9 millionc for the first half, up from $401.7 million, and included $200.2 million of collected tariff refunds and interest. Cash and cash equivalents were $1.03 billion at August 2, 2026, and the company had no borrowings under its $600 million revolving Credit Facility.
Capital returns continued during the period: the company repurchased $287.8 milliond of common stock and paid $175.4 million in dividends in the first half. No shares were repurchased in the second quarter, and about $1.1 billion remained under the total repurchase authorization.
The company declared dividends of $0.76 per share for the quarter, compared with $0.66 a year earlier. The filing states management expects tariff and macroeconomic uncertainty to continue throughout fiscal 2026, and it notes that $29.3 million of tariff refund income is deferred in inventories, expected to reduce cost of goods sold in the third quarter.
02—Key points
Key Highlights
- Net revenues of $1,959.8 million in Q2 fiscal 2026, up from $1,836.8 million; company comp growth of 6.2%.
- Gross margin rose to 51.6% from 47.1%, with IEEPA tariff refunds net of vendor reimbursements contributing 610 basis points.
- Diluted EPS of $2.84 in Q2 versus $2.00; the quarter included $1.06 of tariff refund income and $0.30 of vendor reimbursements.
- Net earnings of $569.5 million for the first half of fiscal 2026, versus $478.8 million a year earlier.
- Operating cash flow of $695.9 million in the first half, including $200.2 million of collected tariff refunds and interest.
- Cash and cash equivalents of $1.03 billion at August 2, 2026, with no borrowings under the $600 million Credit Facility.
- Returned $463.2 million to stockholders through repurchases and dividends in the first half; approximately $1.1 billion remains under the repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2027, Williams-Sonoma kept $0.17.
- Revenue$1.96B100.0%
- Cost of revenue−$947.8M48.4%
- Gross profit$1.01B51.6%
- Operating costs−$563.2M28.7%
- Operating income$448.8M22.9%
- Interest, other & tax−$110.7M5.6%
- Net income$338.1M17.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2027filed August 28, 2026Financial Statements
Q2 FY2027 against Q2 FY2026
| Line item | Q2 FY2027Q2 FY2026 | Change |
|---|---|---|
| Revenue | $1.96B$1.84B | +6.7% |
| Cost of Revenue | $947.81M$972.14M | −2.5% |
| Gross Profit | $1.01B$864.62M | +17.0% |
| SG&A Expenses | $563.15M$536.56M | +5.0% |
| Operating Income | $448.80M$328.06M | +36.8% |
| Net Income | $338.11M$247.56M | +36.6% |
| EPS (Basic) | $2.87$2.03 | +41.4% |
| EPS (Diluted) | $2.84$2.00 | +42.0% |
| Shares Outstanding (Basic) | 117.77M122.12M | −3.6% |
| Shares Outstanding (Diluted) | 118.89M123.59M | −3.8% |
05—Questions
Frequently Asked Questions
How much of the quarter's earnings growth came from tariff refunds?
The filing reports that the quarter's diluted EPS of $2.84 included $1.06 of tariff refund income recognized as a reduction to cost of goods sold and $0.04 of interest income on tariff refunds, partially offset by $0.30 of reimbursements to certain merchandise vendors and a $0.06 one-time tariff-related employee recognition cost.
What drove the underlying sales growth?
Net revenues increased $123.0 million, or 6.7%, driven by company comp growth of $109.4 million, or 6.2%, with e-commerce comp growth of 6.5% and retail comp growth of 5.5%. Williams Sonoma brand comp was 7.6%, West Elm 6.4%, Pottery Barn 5.1% and Pottery Barn Kids and Teen 3.5%.
Did the company repurchase shares during the quarter?
No. The filing states that during the thirteen weeks ended August 2, 2026, the company did not repurchase any shares. In the first half, it repurchased 1,608,253 shares at an average cost of $178.96 for an aggregate $287.8 million, and $50.8 million remained under the September 2024 authorization.
What are the company's liquidity and debt positions?
The company held $1.03 billion in cash and cash equivalents, of which $40.7 million was held by international subsidiaries. It had no borrowings under its $600 million unsecured revolving Credit Facility, which matures June 26, 2030, and it stated it was in compliance with its financial covenants.
What outlook did management provide?
Management said the current uncertain macroeconomic environment, including war, higher oil prices, the evolving tariff and trade policy landscape, and a stagnant housing market, could continue to affect the business, and it expects tariff-related uncertainty to continue throughout fiscal 2026. It also noted $29.3 million of deferred tariff refund income expected to reduce cost of goods sold in the third quarter of fiscal 2026.
06—Continue