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Williams-Sonoma, Inc. Reports First Quarter 2025 Results

Furniture World News Desk on 5/22/2025


 

Williams-Sonoma, Inc. announced financial results for the first quarter ended May 4, 2025, compared to the same period last year.

“We are proud to deliver strong results in the first quarter of 2025, driven by a positive top-line comp and continued strength in our profitability. In Q1, our comp came in above expectations at +3.4%. And, we exceeded profitability estimates with an operating margin of 16.8% and earnings per share of $1.85 with earnings growth of 8.8%. In the quarter, we saw an acceleration of the positive comp trend coming out of Q4, with all brands running positive comps,” said Laura Alber, President and CEO.

“There is no doubt that existing macroeconomic and geopolitical uncertainties are a focal point for the market,” Alber added. “But volatility is not new in our industry, and we are confident in our ability to adapt and navigate whatever lies ahead. Therefore, we are optimistic about 2025 as we continue our focus on product innovation and customer service.”

Q1 2025 Financial Highlights

  • Comparable brand revenue: +3.4%
  • Gross margin: 44.3%, down 360bps year-over-year (YoY), impacted by a prior year +300bps freight adjustment. Excluding that, gross margin declined 60bps YoY due to lower merchandise margins, partially offset by supply chain and occupancy efficiencies.
  • SG&A expense: $475 million or 27.5% of revenue, down 130bps YoY due to reduced advertising and incentive compensation.
  • Operating income: $291 million; operating margin of 16.8%, down 230bps YoY (up 70bps YoY when excluding the prior year freight adjustment).
  • Diluted EPS: $1.85, down 7.0% YoY including prior year benefit; up 8.8% YoY excluding prior year freight adjustment.
  • Merchandise inventories: $1.3 billion, up 10.3% YoY, including a strategic pull forward of receipts to mitigate tariff risk.
  • Cash and liquidity: $1.0 billion in cash; $119 million in operating cash flow.
  • Returns to shareholders: $165 million through $90 million in share repurchases and $75 million in dividends.
  • Remaining stock repurchase authorization: $1.1 billion.

Freight Adjustment in Q1 FY24

In April 2024, the company recorded a $49 million out-of-period adjustment related to previously over-recognized freight expense. This correction was made in Q1 FY24 and is reflected in the prior year financial comparison.

Outlook for FY25

Williams-Sonoma reaffirmed its full-year 2025 and long-term guidance. The outlook incorporates the impact of tariffs currently in place, including:

  • 30% tariffs on China
  • 10% global reciprocal tariff
  • 25% tariffs on Mexico, Canada, steel, and aluminum

Fiscal 2025 Guidance:

  • Net revenue change: -1.5% to +1.5% (impacted by the 53rd week in FY24)
  • Comparable brand revenue: flat to +3.0%
  • Operating margin: 17.4% to 17.8%

Long-Term Guidance:

  • Mid-to-high single-digit annual net revenue growth
  • Operating margin in the mid-to-high teens

All FY25 comparisons are based on a 52-week year versus a 53-week year in FY24. Comps will be reported on a comparable 52-week basis.

 

 

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, and GreenRow — represent distinct merchandise strategies that are marketed through e-commerce, direct-mail catalogs and retail stores. 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 the Middle East, the Philippines, Mexico, South Korea and India. For more information, visit www.williams-sonoma.com.