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Williams-Sonoma (NYSE: WSM) lifts 2026 outlook after tariff refund reshapes margins

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

WILLIAMS-SONOMA, INC. (WSM) reported strong results for the second quarter ended August 2, 2026, with net revenues of $1.96 billion, up 6.7% year over year, and comparable brand revenue growth of 6.2%. GAAP operating margin was 22.9% and GAAP diluted EPS was $2.84, while non-GAAP operating margin was 17.3% and non-GAAP diluted EPS was $2.10, up 5.0% versus last year.

GAAP gross margin rose to 51.6%, aided by a one-time $167.8 million IEEPA tariff refund and related items, which the company excludes from non-GAAP results, yielding a non-GAAP gross margin of 45.5%, down 160 bps year over year due to lower merchandise margins from tariff costs. Operating cash flow for the first half of 2026 was $695.9 million, supporting cash of $1.03 billion and $90 million returned to stockholders via dividends.

The company raised its full-year 2026 outlook, now expecting annual net revenue growth of 4.7%–7.2%, comparable brand revenue growth of 4.0%–6.5%, and a non-GAAP operating margin of 17.8%–18.2%. Guidance assumes existing tariff regimes and no further benefit from tariff refunds or related interest.

Positive

  • Net revenues grew 6.7% year over year in Q2 2026 to $1.96 billion, with comparable brand revenue up 6.2%, indicating broad-based top-line growth.
  • GAAP diluted EPS increased 42.0% to $2.84, and non-GAAP diluted EPS rose 5.0% to $2.10, reflecting improved earnings performance.
  • Operating cash flow reached $695.9 million for the first 26 weeks of 2026, significantly above the prior year’s $401.7 million, strengthening liquidity.
  • The company raised its full-year 2026 guidance to net revenue growth of 4.7%–7.2% and non-GAAP operating margin of 17.8%–18.2%, signaling confidence in continued performance.

Negative

  • Non-GAAP gross margin declined 160 bps year over year to 45.5%, and non-GAAP operating margin fell 60 bps to 17.3%, driven mainly by lower merchandise margins from tariff costs.

Filing Explained

Six-month common-stock repurchases were $287,805 thousand, while shares outstanding stood at 117,779 thousand on August 2, 2026.

This Form 8-K furnishes preliminary second-quarter results for the period ended August 2, 2026; the related Form 10-Q has not yet been filed, so the results may change.

It also reports $287,805 thousand of six-month common-stock repurchases and 117,779 thousand shares issued and outstanding at August 2, 2026, compared with 118,770 thousand at February 1, 2026.

The financing statement identifies the repurchase figure as cash actually used for common-stock repurchases, while the balance sheet provides the corresponding reported share counts.

The tariff-refund process was substantially collected by August 2, 2026, with a remaining $3.2 million receivable; $29.3 million of refund income remained deferred in inventory and was anticipated for recognition in the third quarter.

The subsequent Form 10-Q—the quarterly report for interim financial statements and liquidity updates—is the named filing to check for changes to these preliminary results and the deferred refund amount.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Q2 2026 Net revenues $1,959,757 thousand Thirteen weeks ended August 2, 2026; up 6.7% vs Q2 2025
Q2 2026 Comparable brand revenue growth 6.2% Second quarter 2026 vs second quarter 2025 total comparable brand revenue
Q2 2026 GAAP diluted EPS $2.84 Thirteen weeks ended August 2, 2026; 42.0% above prior-year GAAP diluted EPS of $2.00
Q2 2026 Non-GAAP diluted EPS $2.10 Thirteen weeks ended August 2, 2026; 5.0% above prior-year non-GAAP diluted EPS of $2.00
Tariff refund income recorded in Q2 2026 $167,778 thousand Reduction to cost of goods sold related to IEEPA tariff refunds in Q2 2026
Operating cash flow 26 weeks 2026 $695,862 thousand Net cash provided by operating activities for the twenty-six weeks ended August 2, 2026
Fiscal 2026 net revenue growth guidance 4.7% to 7.2% Updated full-year 2026 annual net revenue growth outlook on a non-GAAP basis
Fiscal 2026 non-GAAP operating margin guidance 17.8% to 18.2% Updated full-year 2026 expected non-GAAP operating margin range
comparable brand revenue financial
"2nd Quarter Net Revenues and Comparable Brand Revenue Growth 1"
International Emergency Economic Powers Act regulatory
"refund of previously paid International Emergency Economic Powers Act (“IEEPA”) tariffs."
A U.S. law that gives the president broad authority to control trade, financial transactions, and assets during a declared national emergency, such as by imposing sanctions, freezing property, or restricting exports and imports. For investors it matters because those powers can suddenly block deals, cut off access to markets or funds, and change the value of companies or securities much like an emergency brake that can stop or reroute economic activity overnight.
non-GAAP financial
"non-GAAP operating margin of 17.3%"
Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.
tariff refund financial
"During Q2 2026, we recognized a reduction to cost of goods sold of $167.8 million related to a refund of IEEPA tariffs."
A tariff refund is a government payment that returns customs duties or import taxes a company already paid, for example when goods are re-exported, duties were charged in error, or a policy rebate applies. Like getting a sales-tax rebate after a purchase, the refund reduces a company’s net cost and can improve cash flow, margins, and competitiveness, so investors watch them as potential one-time boosts to profits or indicators of lower ongoing costs.
occupancy leverage financial
"driven by (i) IEEPA tariff refunds ... and (ii) occupancy leverage of +40bps"
Section 301 tariffs regulatory
"including the Section 232 tariffs, the existing Section 301 tariffs, the new Section 301 tariffs"
Section 301 tariffs are extra import duties a government can impose on goods from another country after it finds unfair trade practices, like forced technology transfer or discriminatory rules. Think of them as a penalty fee added to certain foreign products; they matter to investors because they can raise costs, disrupt supply chains, change competitive positions, and affect corporate profits, pricing and market access across affected industries.
Net revenues $1.96 billion in Q2 2026 Up 6.7% vs $1.84 billion in Q2 2025
Comparable brand revenue 6.2% growth in Q2 2026 Up vs 3.7% in Q2 2025
GAAP diluted EPS $2.84 in Q2 2026 Up 42.0% vs $2.00 in Q2 2025
Non-GAAP diluted EPS $2.10 in Q2 2026 Up 5.0% vs $2.00 in Q2 2025
GAAP gross margin 51.6% in Q2 2026 Up 450 bps vs prior year, aided by tariff refund
Non-GAAP gross margin 45.5% in Q2 2026 Down 160 bps vs prior year, driven by lower merchandise margins
Operating cash flow $695.9 million for 26 weeks 2026 Up vs $401.7 million for 26 weeks 2025
Guidance

For fiscal 2026, WSM expects annual net revenue growth of 4.7%–7.2%, comparable brand revenue growth of 4.0%–6.5%, non-GAAP operating margin of 17.8%–18.2%, approximately $25 million of non-GAAP interest income, and an effective non-GAAP tax rate of about 26%.

FAQ

How did WSM’s Q2 2026 revenue perform compared to last year?
WSM reported Q2 2026 net revenues of $1.96 billion, up 6.7% from $1.84 billion in Q2 2025. Comparable brand revenue grew 6.2% versus 3.7% a year earlier, with every major brand contributing to growth.

What were WSM’s Q2 2026 earnings and margins on a GAAP and non-GAAP basis?
In Q2 2026, WSM delivered GAAP diluted EPS of $2.84 and GAAP operating margin of 22.9%. On a non-GAAP basis, diluted EPS was $2.10 and operating margin 17.3%, down 60 bps from 17.9% in Q2 2025.

How did tariff refunds affect WSM’s Q2 2026 results?
In Q2 2026, WSM recorded a $167.8 million reduction to cost of goods sold from IEEPA tariff refunds and $6.3 million of related interest income, partly offset by $47.5 million in vendor reimbursements and a $10.0 million employee 401(k) contribution. These items are excluded from non-GAAP results.

What is Williams-Sonoma’s updated full-year 2026 outlook?
For fiscal 2026, WSM now expects net revenue growth of 4.7%–7.2%, comparable brand revenue growth of 4.0%–6.5%, and a non-GAAP operating margin of 17.8%–18.2%. Guidance assumes current tariffs stay in place and excludes future tariff refund benefits.

What was WSM’s liquidity and cash flow position as of Q2 2026?
As of August 2, 2026, WSM held $1.03 billion in cash and cash equivalents. Net cash provided by operating activities for the first 26 weeks of 2026 was $695.9 million, supporting dividend payments of $175.4 million and ongoing share repurchases.

How did WSM’s merchandise inventories change in Q2 2026?
Merchandise inventories were $1.45 billion at August 2, 2026, up 1.0% from the prior-year quarter, net of $29.3 million of deferred tariff refund income recorded as a reduction of inventory.

Which WSM brands drove Q2 2026 revenue growth?
In Q2 2026, Pottery Barn net revenues were $770.8 million with comps up 5.1%; West Elm revenues were $496.3 million, comps up 6.4%; Williams Sonoma revenues were $268.8 million, comps up 7.6%; and Pottery Barn Kids and Teen revenues were $297.4 million, comps up 3.5%.

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Understanding 8-K Material Events →
False000071995500007199552026-08-262026-08-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

 CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 26, 2026


Williams-Sonoma, Inc.
(Exact name of registrant as specified in its charter)


Delaware001-1407794-2203880
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
3250 Van Ness Avenue, San Francisco, California
94109
(Address of principal executive offices)(Zip code)

Registrant’s telephone number, including area code (415) 421-7900

N/A
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading
Symbol(s)		Name of each exchange
on which registered
Common Stock, par value $.01 per shareWSM
New York Stock Exchange, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐



Item 2.02.    Results of Operations and Financial Condition

On August 26, 2026, Williams-Sonoma, Inc. (the “Company”) issued a press release announcing the Company’s financial results for its second quarter ended August 2, 2026. A copy of the Company’s press release is attached as Exhibit 99.1. The attached exhibit is provided under Item 2.02 of Form 8-K and is furnished to, but not filed with, the Securities and Exchange Commission.

Item 9.01.    Financial Statements and Exhibits

(d)List of Exhibits:
99.1
Press Release dated August 26, 2026 announcing Williams-Sonoma, Inc.’s Second Quarter 2026 Financial Results.
104Cover Page Interactive Data File (embedded within the Inline XBRL document)

    
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

WILLIAMS-SONOMA, INC.
Date: August 26, 2026
By:/s/ Jeffrey E. Howie
Jeffrey E. Howie
Chief Financial Officer
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Exhibit 99.1
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Williams-Sonoma, Inc. announces strong second quarter 2026 results
Q2 comparable brand revenue +6.2%
GAAP operating margin of 22.9%; non-GAAP operating margin of 17.3%
GAAP diluted EPS of $2.84; non-GAAP diluted EPS of $2.10
Raises full-year 2026 outlook
San Francisco, CA, August 26, 2026 – Williams-Sonoma, Inc. (NYSE: WSM) today announced operating results for the second quarter ended August 2, 2026 versus the second quarter ended August 3, 2025.
“We delivered a very strong second quarter. In Q2, our comp came in at 6.2%, with total revenue growth of 6.7%, and we drove an operating margin of 17.3% with earnings per share of $2.10. Every brand delivered again in the quarter, driven by strong execution across our brands, our channels, and our team,” said Laura Alber, President and Chief Executive Officer.

Alber concluded, “Our strategies continue to gain momentum, and our results reflect the power of our execution. We gained market share, continued to outperform the industry, and raised our annual outlook on both the top and bottom lines. We are delivering compounding results despite the housing market and other macroeconomic events, and we remain confident in our priorities and plans for the remainder of 2026 and beyond.”
SECOND QUARTER 2026 HIGHLIGHTS
•Comparable brand revenue +6.2%.
•Gross margin of 51.6% on a GAAP basis, +450bps to LY driven by (i) IEEPA tariff refunds, net of tariff-related vendor concessions, of +610bps, (ii) occupancy leverage of +40bps, and (iii) supply chain efficiencies of +30bps, partially offset by (iv) lower merchandise margins of -230bps primarily driven by tariff costs. Occupancy costs of $208 million, +3.3% to LY.
•Gross margin of 45.5% on a non-GAAP basis, -160bps to LY driven by (i) lower merchandise margins of -230bps primarily driven by tariff costs, partially offset by (ii) supply chain efficiencies of +30bps, and (iii) occupancy leverage of +40bps. Occupancy costs of $208 million, +3.3% to LY.
•SG&A rate of 28.7% on a GAAP basis, -50bps to LY driven by (i) employment expense leverage, net of a one-time tariff-related employee recognition cost in the form of a discretionary 401(k) contribution, of -70bps, partially offset by (ii) higher general expenses of +10bps, and (iii) higher advertising expenses of +10bps. SG&A of $563 million, +5.0% to LY on a GAAP basis.
•SG&A rate of 28.2% on a non-GAAP basis, -100bps to LY driven by (i) employment expense leverage of -120bps, partially offset by (ii) higher general expenses of +10bps, and (iii) higher advertising expenses of +10bps. SG&A of $553 million, +3.1% to LY on a non-GAAP basis.
•Operating income of $449 million with an operating margin of 22.9% on a GAAP basis; or $338 million with an operating margin of 17.3% on a non-GAAP basis. +500bps to LY on a GAAP basis and -60bps to LY on a non-GAAP basis.
•GAAP diluted EPS of $2.84 per share, or $2.10 on a non-GAAP basis. +42.0% to LY on a GAAP basis and +5.0% to LY on a non-GAAP basis.
•Merchandise inventories +1.0% to the second quarter LY to $1.45 billion, net of $29.3 million of deferred tariff refund income recorded as a reduction of inventory.
•Maintained strong liquidity position of $1.0 billion in cash and $696 million in operating cash flow, inclusive of the collection of $200.2 million of tariff refunds and the related interest, enabling the company to deliver returns to stockholders of $90 million through dividends.
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TARIFF REFUND
During the second quarter of fiscal 2026, we recognized income from the refund of previously paid International Emergency Economic Powers Act (“IEEPA”) tariffs. During the quarter, we recorded (i) a reduction of cost of goods sold of $167.8 million related to refunds received for tariffs that have been previously expensed and (ii) related interest income of $6.3 million. This income was partially offset by (i) a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions and (ii) a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees. As of August 2, 2026, we deferred $29.3 million of the tariff refund income as a reduction of merchandise inventories, which we anticipate recognizing as a reduction to cost of goods sold in the third quarter of fiscal 2026. Substantially all of our initial refund claim of $197.8 million has been collected as of August 2, 2026, with a remaining tariff refund receivable of $3.2 million. We have adjusted all of these tariff-related items as non-GAAP adjustments. See Exhibit 1 for our GAAP to non-GAAP reconciliation.
OUTLOOK
•We are raising our fiscal 2026 guidance to reflect our year-to-date strong performance.
•In fiscal 2026, we now expect annual net revenues in the range of +4.7% to +7.2%, with comps in the range of +4.0% to +6.5%; and an operating margin, on a non-GAAP basis, between 17.8% to 18.2%.
•Our guidance assumes (i) all tariffs currently in place will remain for fiscal 2026, including the Section 232 tariffs, the existing Section 301 tariffs, the new Section 301 tariffs announced on July 23rd, and the latest tariffs between Canada and the United States, (ii) oil prices will remain elevated for the remainder of the year, and (iii) no benefit from tariff refunds or related interest.
•For fiscal 2026, we expect annual interest income of approximately $25 million and an effective tax rate of approximately 26%, both on a non-GAAP basis.
•Over the long term, we continue to expect mid-to-high single-digit annual net revenue growth with an operating margin in the mid-to-high teens.
CONFERENCE CALL AND WEBCAST INFORMATION
Williams-Sonoma, Inc. will host a live conference call today, August 26, 2026, at 7:00 A.M. (PT). The call will be open to the general public via live webcast and can be accessed at http://ir.williams-sonomainc.com/events. A replay of the webcast will be available at http://ir.williams-sonomainc.com/events.
CONTACT INFORMATION
Jeff Howie EVP, Chief Financial Officer – (415) 402 4324
Jeremy Brooks SVP, Chief Accounting Officer & Head of Investor Relations – (415) 733 2371
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SEC REGULATION G — NON-GAAP INFORMATION
This press release and our accompanying earnings call include non-GAAP financial measures. Exhibit 1 provides reconciliations of these non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). We have not provided a reconciliation of non-GAAP measures to the most directly comparable GAAP measures on a forward-looking basis as we cannot do so without unreasonable efforts due to the potential variability and limited visibility of excluded items; these excluded items may include exit costs, reduction-in-force initiatives, impairment, early termination charges and other non-recurring or non-operational income or expenses. For the same reasons, we are unable to address the probable significance of any such excluded items. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of current period performance on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. In addition, certain other items may be excluded from non-GAAP financial measures when the company believes this provides greater clarity to management and investors. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to the GAAP financial measures presented in this press release and our financial statements and other publicly filed reports. Such non-GAAP measures may not be comparable to similarly titled measures used by other companies.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or are proven incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements include, among other things, statements in the quotes of our President and Chief Executive Officer, our fiscal year 2026 outlook and long-term financial targets, and statements regarding our industry trends and business strategies.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: our ability to provide products that are designed and built for durability and longevity at competitive prices; changes in and the related impact of U.S. (federal, state and local) and international tax laws, trade policies and regulations; our ability to mitigate current and future tariffs; factors, including but not limited to general economic conditions, inflationary pressures, consumer disposable income, rising fuel prices, recession and fears of recession, unemployment, war and fears of war, adverse weather, availability of consumer credit, conditions in the housing market, elevated interest rates, and consumer confidence in current and future economic conditions that can affect consumer spending; the plans, strategies, initiatives and objectives of management for future operations; our ability to execute strategic priorities and growth initiatives; our beliefs about our competitive advantages and areas of potential future growth in the market; the impact of periods of decreased home purchases; our ability to anticipate consumer preferences and buying trends; factors, including but not limited to fuel costs, labor disputes, union organizing activity, geopolitical instability, and acts of terrorism and war, that can affect the global supply chain; effective inventory management; timely and effective sourcing and delivery of merchandise from our suppliers; our ability to respond to the growing use of and to adopt new technologies, including artificial intelligence; our belief in the reasonableness of the steps taken by us and our suppliers to protect the security and confidentiality of the information we collect; multi-channel and multi-brand complexities; our brands, products, retail and related initiatives, including our ability to introduce new products, product lines, brands and brand extensions, and bring in new customers; challenges associated with our global presence and expansion efforts; our ability to control employment, advertising, occupancy, and other operating costs; payment of dividends; our ability to drive long-term sustainable returns; our capital allocation strategy in fiscal 2026; our planned use of cash in fiscal 2026; projections of earnings, revenues, growth and other financial items; and other risks and uncertainties described more fully in our public announcements, reports to stockholders and other documents filed with or furnished to the SEC, including our Annual Report on Form 10-K for the fiscal year ended February 1, 2026 and all subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. We have not filed our Form 10-Q for the quarter ended August 2, 2026. As a result, all financial results described here should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time we file the Form 10-Q. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
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ABOUT WILLIAMS-SONOMA, INC.
Williams-Sonoma, Inc. is the world’s largest digital-first, design-led and sustainable home retailer. The company’s brands — Williams Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Williams Sonoma Home, Rejuvenation, Mark and Graham, GreenRow, and Dormify — represent distinct merchandise strategies that are marketed through e-commerce, direct-mail catalogs, retail stores, and business-to-business. These brands collectively support The Key Rewards, our loyalty and credit card program that offers members exclusive benefits. We operate in the U.S., Puerto Rico, Canada, Australia and the United Kingdom, and have unaffiliated franchisees that operate stores in Mexico, South Korea, India and the Philippines.
WSM-IR
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Condensed Consolidated Statements of Earnings (unaudited)
 
For the Thirteen Weeks Ended
For the Twenty-six Weeks Ended
August 2, 2026August 3, 2025August 2, 2026August 3, 2025
(In thousands, except per share amounts)$% of Net
revenues		$% of Net
revenues		$% of Net
revenues		$% of Net
revenues
Net revenues$1,959,757 100.0 %$1,836,760 100.0 %$3,765,213 100.0 %$3,566,873 100.0 %
Cost of goods sold947,809 48.4 972,137 52.9 1,959,839 52.1 1,936,441 54.3 
Gross profit1,011,948 51.6 864,623 47.1 1,805,374 47.9 1,630,432 45.7 
Selling, general and administrative expenses563,153 28.7 536,564 29.2 1,064,891 28.3 1,011,660 28.4 
Operating income448,795 22.9 328,059 17.9 740,483 19.7 618,772 17.3 
Interest income, net
12,412 0.6 9,080 0.5 19,319 0.5 18,613 0.5 
Earnings before income taxes461,207 23.5 337,139 18.4 759,802 20.2 637,385 17.9 
Income taxes123,098 6.3 89,577 4.9 190,331 5.1 158,560 4.4 
Net earnings$338,109 17.3 %$247,562 13.5 %$569,471 15.1 %$478,825 13.4 %
Earnings per share (EPS):
Basic$2.87 $2.03 $4.82 $3.91 
Diluted$2.84 $2.00 $4.77 $3.86 
Shares used in calculation of EPS:
Basic117,765122,121118,075 122,614 
Diluted118,892123,595119,375 124,163 

2nd Quarter Net Revenues and Comparable Brand Revenue Growth 1
Net revenuesComparable brand revenue
growth
(In thousands, except percentages)Q2 26Q2 25Q2 26Q2 25
Pottery Barn$770,808 $724,579 5.1 %1.1 %
West Elm496,251 468,550 6.4 3.3 
Williams Sonoma 2
268,828 249,053 7.6 5.1 
Pottery Barn Kids and Teen297,438 286,749 3.5 5.3 
Other 3
126,432 107,829 N/AN/A
Total 4
$1,959,757 $1,836,760 6.2 %3.7 %
1See the Company’s 10-K for the definition of comparable brand revenue, which is calculated on a 13-week basis, and includes business-to-business revenues.
2Includes Williams Sonoma Home net revenues.
3Primarily consists of net revenues from Rejuvenation, Mark and Graham, our international franchise operations, GreenRow and Dormify.
4Total comparable brand revenue growth includes Rejuvenation, Mark and Graham, and GreenRow.

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Condensed Consolidated Balance Sheets (unaudited)

As of
(In thousands, except per share amounts)
August 2,
2026
February 1, 2026
August 3,
2025
Assets
Current assets
Cash and cash equivalents$1,028,936 $1,019,801 $985,823 
Accounts receivable, net146,219 126,821 115,509 
Merchandise inventories, net1,447,423 1,462,849 1,433,605 
Prepaid expenses105,583 80,053 100,622 
Other current assets18,385 23,663 19,961 
Total current assets2,746,546 2,713,187 2,655,520 
Property and equipment, net1,121,677 1,095,158 1,029,526 
Operating lease right-of-use assets1,322,644 1,270,272 1,221,792 
Deferred income taxes, net74,433 99,161 95,797 
Goodwill77,369 77,398 77,374 
Other long-term assets, net163,637 156,736 148,359 
Total assets$5,506,306 $5,411,912 $5,228,368 
Liabilities and stockholders' equity
Current liabilities
Accounts payable$703,822 $637,985 $601,661 
Accrued expenses207,857 314,588 202,914 
Gift card and other deferred revenue618,926 602,940 578,192 
Income taxes payable62,098 78,943 74,329 
Operating lease liabilities217,032 221,356 222,572 
Other current liabilities88,843 98,318 86,641 
Total current liabilities1,898,578 1,954,130 1,766,309 
Long-term operating lease liabilities1,310,914 1,235,549 1,171,675 
Other long-term liabilities155,900 139,674 140,688 
Total liabilities3,365,392 3,329,353 3,078,672 
Stockholders' equity
Preferred stock: $0.01 par value; 7,500 shares authorized, none issued
— — — 
Common stock: $0.01 par value; 253,125 shares authorized; 117,779, 118,770, and 121,790 shares issued and outstanding at August 2, 2026, February 1, 2026 and August 3, 2025, respectively
1,178 1,188 1,219 
Additional paid-in capital543,931 587,433 544,244 
Retained earnings1,611,605 1,509,129 1,622,191 
Accumulated other comprehensive loss(14,142)(13,176)(15,943)
Treasury stock, at cost(1,658)(2,015)(2,015)
Total stockholders' equity2,140,914 2,082,559 2,149,696 
Total liabilities and stockholders' equity$5,506,306 $5,411,912 $5,228,368 
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Retail Store Data
(unaudited)
Beginning of quarterEnd of quarterAs of
May 3, 2026OpeningsClosingsAugust 2, 2026August 3, 2025
Pottery Barn180 2 (1)181 181 
Williams Sonoma153 — — 153 154 
West Elm116 1 — 117 119 
Pottery Barn Kids43 — — 43 44 
Rejuvenation13 — — 13 11 
GreenRow1 — — 1 — 
Total506 3 (1)508 509 


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Condensed Consolidated Statements of Cash Flows (unaudited)

For the Twenty-six Weeks Ended
(In thousands)August 2, 2026August 3, 2025
Cash flows from operating activities:
Net earnings$569,471 $478,825 
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization112,683 113,165 
Loss on disposal/impairment of assets1,108 3,599 
Non-cash lease expense127,380 121,936 
Deferred income taxes12,884 14,658 
Tax benefit related to stock-based awards11,650 11,423 
Stock-based compensation expense61,530 46,974 
Other(898)(1,275)
Changes in:
Accounts receivable(19,495)2,411 
Merchandise inventories15,000 (98,562)
Prepaid expenses and other assets(27,704)(37,959)
Accounts payable49,314 (48,962)
Accrued expenses and other liabilities(89,166)(78,142)
Gift card and other deferred revenue16,197 (7,069)
Operating lease liabilities(127,247)(125,977)
Income taxes payable(16,845)6,633 
Net cash provided by operating activities695,862 401,678 
Cash flows from investing activities:
Purchases of property and equipment(116,434)(110,293)
Other62 (1,195)
Net cash used in investing activities(116,372)(111,488)
Cash flows from financing activities:
Repurchases of common stock(287,805)(289,108)
Payment of dividends(175,444)(155,994)
Tax withholdings related to stock-based awards(99,095)(67,903)
Debt issuance costs— (1,187)
Other (7,658)(6,941)
Net cash used in financing activities(570,002)(521,133)
Effect of exchange rates on cash and cash equivalents(353)3,789 
Net increase (decrease) in cash and cash equivalents9,135 (227,154)
Cash and cash equivalents at beginning of period1,019,801 1,212,977 
Cash and cash equivalents at end of period$1,028,936 $985,823 
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Exhibit 1
2nd Quarter GAAP to Non-GAAP Reconciliation
(unaudited)
For the Thirteen Weeks Ended
For the Twenty-six Weeks Ended
August 2, 2026August 3, 2025August 2, 2026August 3, 2025
(In thousands, except per share data)$% of Net
revenues		$% of Net
revenues		$% of Net
revenues		$% of Net
revenues
Gross profit$1,011,948 51.6 %$864,623 47.1 %$1,805,374 47.9 %$1,630,432 45.7 %
Tariff refund income1
(167,778)— (167,778)— 
Tariff refund-related vendor concessions2
47,464 — 47,464 — 
Non-GAAP gross profit$891,634 45.5 %$864,623 47.1 %$1,685,060 44.8 %$1,630,432 45.7 %
Selling, general and administrative expenses$563,153 28.7 %$536,564 29.2 %$1,064,891 28.3 %$1,011,660 28.4 %
Tariff refund-related employee recognition3
(10,000)— (10,000)— 
Non-GAAP selling, general and administrative expenses$553,153 28.2 %$536,564 29.2 %$1,054,891 28.0 %$1,011,660 28.4 %
Operating income$448,795 22.9 %$328,059 17.9 %$740,483 19.7 %$618,772 17.3 %
Tariff refund income1
(167,778)— (167,778)— 
Tariff refund-related vendor concessions2
47,464 — 47,464 — 
Tariff refund-related employee recognition3
10,000 — 10,000 — 
Non-GAAP operating income$338,481 17.3 %$328,059 17.9 %$630,169 16.7 %$618,772 17.3 %
Interest income, net$12,412 0.6 %$9,080 0.5 %$19,319 0.5 %$18,613 0.5 %
Interest income on tariff refund4
(6,346)— (6,346)— 
Non-GAAP interest income, net$6,066 0.3 %$9,080 0.5 %$12,973 0.3 %$18,613 0.5 %
Earnings before income taxes$461,207 23.5 %$337,139 18.4 %$759,802 20.2 %$637,385 17.9 %
Tariff refund income1
(167,778)— (167,778)— 
Tariff refund-related vendor concessions2
47,464 — 47,464 — 
Tariff refund-related employee recognition3
10,000 — 10,000 — 
Interest income on tariff refund4
(6,346)— (6,346)— 
Non-GAAP earnings before income taxes$344,547 17.6 %$337,139 18.4 %$643,142 17.1 %$637,385 17.9 %
  
$Tax rate$Tax rate$Tax rate$Tax rate
Income taxes$123,098 26.7 %$89,577 26.6 %$190,331 25.1 %$158,560 24.9 %
Tariff refund income1
(41,428)— (41,428)— 
Tariff refund-related vendor concessions2
11,720 — 11,720 — 
Tariff refund-related employee recognition3
2,469 — 2,469 — 
Interest income on tariff refund4
(1,567)— (1,567)— 
Non-GAAP income taxes$94,292 27.4 %$89,577 26.6 %$161,525 25.1 %$158,560 24.9 %
Diluted EPS$2.84 $2.00 $4.77 $3.86 
Tariff refund income1
(1.06)— (1.06)— 
Tariff refund-related vendor concessions2
0.30 — 0.30 — 
Tariff refund-related employee recognition3
0.06 — 0.06 — 
Interest income on tariff refund4
(0.04)— (0.04)— 
Non-GAAP diluted EPS5
$2.10 $2.00 $4.03 $3.86 
1During Q2 2026, we recognized a reduction to cost of goods sold of $167.8 million related to a refund of IEEPA tariffs.
2During Q2 2026, we recorded a provision of $47.5 million to reimburse certain merchandise vendors that previously provided tariff-related concessions.
3During Q2 2026, we recorded a one-time tariff-related employee recognition cost of $10.0 million, in the form of a discretionary 401(k) contribution to all eligible employees.
4During Q2 2026, we recognized interest income of $6.3 million related to interest received on IEEPA tariff refunds.
5Per share amounts may not sum due to rounding to the nearest cent per diluted share.
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SEC Regulation G – Non-GAAP Information
These tables include non-GAAP gross profit, gross margin, selling, general and administrative expense, operating income, operating margin, interest income, earnings before income taxes, income taxes, effective tax rate and diluted EPS. We believe that these non-GAAP financial measures provide meaningful supplemental information for investors regarding the performance of our business and facilitate a meaningful evaluation of our quarterly actual results on a comparable basis with prior periods. Our management uses these non-GAAP financial measures in order to have comparable financial results to analyze changes in our underlying business from quarter to quarter. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
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