WSM | Q1 2025

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Overview

• Non-GAAP EPS of $1.85 beats by $0.09.

• Revenue of $1.73B (+4.2% Y/Y) beats by $60M.

Takeaways

Williams-Sonoma (WSM) kicked off 2025 with a strong first quarter, posting 3.4% comp growth and $1.85 in EPS—up nearly 9% from last year when you strip out a one-time accounting benefit.

Every brand saw positive growth, furniture sales finally turned positive for the first time in nine quarters, and the company gained market share while the broader home furnishings industry shrank 3%.

Despite continued pressure from tariffs, higher freight costs, and a soft housing market, management is still confident about its full-year outlook: comps between flat and +3%, and operating margins between 17.4% and 17.8%.

That confidence comes from a six-point plan to offset tariffs—renegotiating vendor costs, shifting sourcing out of China, tightening SG&A, optimizing the supply chain, expanding U.S.-made products, and raising prices where it makes sense. Most of those savings haven’t even hit the financials yet.

Interestingly, retail outperformed e-commerce this quarter, helped by better in-stock levels, more take-home inventory, and improved store experiences. Meanwhile, full-price selling remains strong. The company isn’t chasing sales with promotions, and instead is leaning into exclusive products, smart pricing, and design-forward assortments.

Brand-wise, Pottery Barn and Williams-Sonoma led the way, thanks to killer collaborations and seasonal wins. Pottery Barn Kids and Teen notched their fifth straight quarter of comp growth, West Elm was flat but saw momentum in categories like lighting and textiles, and emerging brands like Rejuvenation, Mark and Graham, and GreenRow are all growing nicely.

Plus, B2B keeps expanding, with new projects across hospitality, education, and entertainment.

With $1 billion in cash, no debt, and continued investments in digital and supply chain efficiency, Williams-Sonoma is still looking very strong. They also continue to be very rewarding to shareholders with a 16% dividend increase for the year and more buybacks on deck.

The bottom line is that even with a lot of uncertainty in the economy, WSM is delivering and is doing it without gimmicks. It looks to me like they’re doing an excellent job focusing on the things that they can control: high-value products, high-value service, and efficient execution.

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