Here's What to Expect Ahead of Williams-Sonoma's Q2 Earnings Release

WSM is expected to post Q2 growth as brand strength, digital upgrades and cost savings offset housing and tariff pressures.

Zacks Equity Research

4 min read

Williams-Sonoma, Inc. WSM is scheduled to release its second-quarter fiscal 2026 results on Aug. 26, before the opening bell.

In the last reported quarter, the company’s earnings and net revenues topped the Zacks Consensus Estimate by 7.2% and 0.1%, respectively. Year over year, the metrics grew 4.3% and 4.4%, respectively.

Williams-Sonoma reported better-than-expected earnings in each of the last four quarters, the average surprise being 7.2%.

How are Estimates Placed for WSM Stock?

For the fiscal second quarter, the Zacks Consensus Estimate for earnings per share (EPS) has moved upward to $2.05 from $2.04 over the past 30 days. The estimated figure indicates an improvement of 2.5% from $2.00 per share reported in the year-ago quarter.

The consensus mark for net revenues is pegged at $1.91 billion, indicating year-over-year growth of 4.1% from $1.84 billion.

Williams-Sonoma, Inc. Price and EPS Surprise

Williams-Sonoma, Inc. price-eps-surprise | Williams-Sonoma, Inc. Quote

Factors at Play for Williams-Sonoma’s Q2 Results

Revenues

Williams-Sonoma’s top-line performance is expected to have improved year over year because of its diversified brand portfolio, strategic collaborations, focus on global expansion and digital upgrades. Moreover, incremental sales trends in furniture and non-furniture business lines, robust performance across its retail and e-commerce channels and integration of AI across digital platforms are expected to have supported growth in the upcoming period.

During the fiscal second quarter, WSM’s Pottery Barn (39.2% of the first quarter of fiscal 2026 net revenues) and West Elm (26.1% of the first quarter of fiscal 2026 net revenues) brands are likely to have gained on the back of refurbished holiday décor items and notable collaborations, alongside expansion in seasonal products and accessories. The home-furnishing company’s namesake brand, Williams-Sonoma (15% of the first quarter of fiscal 2026 net revenues), is expected to have witnessed demand growth across kitchen and related products, with the Pottery Barn Kids and Teen (13.3% of the first quarter of fiscal 2026 net revenues) brand likely to have gained on back-to-school sales.

Although the challenging environment because of continued weakness in the U.S. housing market is concerning, WSM’s in-house capabilities have more than offset these headwinds.

Segment-wise, our Zacks model predicts fiscal second-quarter revenues in the Pottery Barn and West Elm brands to be $741.2 million and $493.7 million, up 2.3% and 5.4%, respectively, from the prior-year quarter level. Revenues for the namesake brand and the Pottery Barn Kids and Teen brand are also expected to be up year over year by 5.8% to $263.4 million and 4.9% to $300.8 million, respectively.

Margins

In the quarter to be reported, Williams-Sonoma’s bottom line and margins are likely to have improved year over year because of supply-chain efficiencies and cost savings. Also, WSM’s efforts in clearing its inventory and minimizing marketing and promotional costs are expected to have aided the metric. However, tariff-related costs and ongoing geopolitical uncertainties are expected to have somewhat restricted the profitability prospects in the fiscal second quarter.

Our model expects selling, general and administrative expenses (as a percentage of net revenues) to contract 40 basis points year over year to 28.8% during the quarter to be reported.

Comps

Favorable impact from diversified product lines, new product introductions and collaborations is expected to have boosted comps growth across all Williams-Sonoma’s key brands.

We expect Pottery Barn’s comps to grow 2.3% year over year. The same inched up 1.1% a year ago and 1% in the previously reported quarter. Our model predicts West Elm’s comps to increase 5.8% year over year in the fiscal second quarter. The metric witnessed a 3.3% increase a year ago, with an 8.5% surge in the last reported quarter.

We expect the namesake brand’s comps to be up 6.1% year over year. The metric witnessed 5.1% growth a year ago and a rise of 5% in the previously reported quarter. Our model expects Pottery Barn Kids and Teen’s comps growth to be 4.9%. The metric witnessed a 5.3% increase a year ago and a rise of 4.5% in the previously reported quarter.

What Our Model Says for Williams-Sonoma

Our proven model conclusively predicts an earnings beat for Williams-Sonoma this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

WSM’s Earnings ESP: The company has an Earnings ESP of +3.05%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

WSM’s Zacks Rank: The stock currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With the Favorable Combinations

According to our model, the following peer companies also possess the right combination of elements to post an earnings beat in the upcoming quarter.

Macy's, Inc. M has an Earnings ESP of +20.8% and a Zacks Rank of 2 at present.

Macy's reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 211%. The company’s earnings for the second quarter of fiscal 2026 are expected to be down year over year by 9.8%.

Wayfair Inc. W currently has an Earnings ESP of +2.40% and a Zacks Rank of 3.

Wayfair’s earnings for the third quarter of 2026 are expected to increase 15.7% year over year. The company reported better-than-expected earnings in three of the last four quarters and met on the remaining occasion, the average surprise being 21.5%.

RH RH currently has an Earnings ESP of +127.49% and a Zacks Rank of 3.

RH reported better-than-expected earnings in one of the trailing four quarters and missed on the remaining three occasions, the average negative surprise being 12.8%. The company’s earnings for the second quarter of fiscal 2026 are expected to decline year over year by 85.7%.

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