01—Abstract
Summary
Summary of the 8-K filed August 26, 2026. Cited figures are marked; the original filing is the authoritative source.
Williams-Sonoma, Inc. (NYSE: WSM) reported second-quarter fiscal 2026 results for the thirteen weeks ended August 2, 2026, with net revenues of $1.96 billiona, up from $1.84 billion a year earlier, and comparable brand revenue growth of 6.2%.
GAAP operating income was $448.8 millionb, a 22.9% operating margin, and GAAP diluted EPS was $2.84. Results were boosted by the recognition of IEEPA tariff refund income of $167.8 million in cost of goods sold. On a non-GAAP basis, which excludes tariff-related items, operating income was $338.5 million, a 17.3% operating margin, and diluted EPS was $2.10, compared with $2.00 a year earlier.
The company raised its fiscal 2026 outlook, now expecting net revenue growth of 4.7% to 7.2%, comparable growth of 4.0% to 6.5%, and a non-GAAP operating margin of 17.8% to 18.2%. The guidance assumes no benefit from tariff refunds or related interest, as well as current tariffs remaining in place and elevated oil prices for the rest of the year. Liquidity remained solid, with $1.03 billionc in cash and cash equivalents and operating cash flow of $695.9 million for the twenty-six weeks, which included collection of $200.2 million of tariff refunds and related interest.
The company returned $90 milliond to stockholders through dividends in the quarter. The results are preliminary because the Form 10-Q for the quarter had not yet been filed. The press release is furnished under Item 2.02 and is not filed with the SEC.
02—Key points
Key Highlights
- Net revenues of $1,959.8 million in Q2 2026, up from $1,836.8 million in Q2 2025; comparable brand revenue grew 6.2%.
- GAAP gross margin of 51.6% (+450 bps) was lifted by IEEPA tariff refunds, net of vendor concessions, of +610 bps; non-GAAP gross margin was 45.5% (-160 bps) on lower merchandise margins from tariff costs.
- GAAP operating income of $448.8 million (22.9% margin) versus non-GAAP operating income of $338.5 million (17.3% margin), which excludes $167.8 million of tariff refund income, a $47.5 million vendor reimbursement provision and a $10.0 million one-time employee 401(k) contribution.
- GAAP diluted EPS of $2.84 versus non-GAAP diluted EPS of $2.10, compared with $2.00 in the prior-year quarter.
- Fiscal 2026 guidance raised: net revenue growth of 4.7% to 7.2%, comparable growth of 4.0% to 6.5%, and non-GAAP operating margin of 17.8% to 18.2%; guidance excludes any benefit from tariff refunds.
- Liquidity remained strong with $1.03 billion in cash and cash equivalents; operating cash flow for the twenty-six weeks was $695.9 million, including $200.2 million of tariff refund collections.
- Merchandise inventories were $1.45 billion, up 1.0% year over year, net of $29.3 million of deferred tariff refund income recorded as a reduction of inventory.
03—Questions
Frequently Asked Questions
How much of the quarter's GAAP profit came from tariff refunds?
The company recognized a $167.8 million reduction to cost of goods sold for IEEPA tariff refunds and $6.3 million of related interest income. These were partially offset by a $47.5 million vendor reimbursement provision and a $10.0 million one-time employee 401(k) contribution. All of these items are excluded from non-GAAP results.
Why is the non-GAAP margin lower than the GAAP margin?
The GAAP margin includes the net tariff refund benefit. Non-GAAP results remove that benefit, so the non-GAAP operating margin of 17.3% is well below the GAAP operating margin of 22.9%. Non-GAAP gross margin was 45.5%, reflecting lower merchandise margins from tariff costs.
Did the company change its fiscal 2026 outlook?
Yes, the company raised its fiscal 2026 guidance. It expects net revenue growth of 4.7% to 7.2%, comparable growth of 4.0% to 6.5%, and a non-GAAP operating margin of 17.8% to 18.2%. The guidance assumes no benefit from tariff refunds or related interest.
What assumptions underlie the guidance?
The guidance assumes all tariffs currently in place remain for fiscal 2026, including Section 232, existing and new Section 301 tariffs, and the latest tariffs between Canada and the United States. It also assumes oil prices stay elevated for the rest of the year. Non-GAAP interest income is expected to be about $25 million and the non-GAAP effective tax rate about 26%.
Are these results final?
Not yet. The company has not filed its Form 10-Q for the quarter ended August 2, 2026, and states that the results are preliminary and subject to change for any necessary adjustments or changes in accounting estimates identified before the 10-Q is filed.
04—Continue