Williams-Sonoma's 'Most Difficult' Margin Comparison Is Behind It. Comps Are Accelerating

Shares of Williams-Sonoma Inc (NYSE:WSM) rallied in early trading on Thursday, after the company reported upbeat second-quarter results.

Here are some key analyst takeaways:

• KeyBanc Capital Markets analyst Bradley Thomas maintained an Overweight rating, while raising the price target from $250 to $270.
• Guggenheim Securities analyst Steven Forbes reaffirmed a Neutral rating on the stock.

Check out other analyst stock ratings.

KeyBanc Capital Markets: Williams-Sonoma continues to gain market share despite a challenging industry backdrop, Thomas said in a note. He highlighted the following from the company’s second-quarter print:

• Comps accelerated sequentially, with all brands and both furniture and non-furniture categories generating positive comps.
• Pottery Barn comps improved to 5.1%
• Williams-Sonoma and West Elm brands are posting comps of more than 6%.
• Emerging and B2B businesses generated double-digit growth.
• Tariff-related headwinds to merchandise margins peaked in the quarter.

Management raised their 2026 outlook, reflecting revenue growth of 4.7%-7.2%, with implied earnings growth of 4.3%-9.1%, the analyst stated.

"We continue to believe that WSM is among the best positioned in our coverage to capitalize on AI opportunities with respect to revenue, cost optimization, marketing, and agentic search," he further wrote.

Guggenheim Securities: Williams-Sonoma reported solid quarterly results, with broad-based comp strength, Forbes said. This was the company’s "most difficult selling margin comparison," due to last year’s tariff-related pricing actions, he noted.

While Williams-Sonoma’s adjusted gross margin came in slightly below expectations, "we view the absolute performance favorably," the analyst wrote, highlighting:

• Positive contributions from occupancy expense leverage
• Supply chain efficiencies

Management raised their 2026 outlook for:

• Net sales growth to 4.7%-7.2%, from 2.7%-6.7%
• Comps of 4.0%-6.5%, from +2.0-6.0%
• Adjusted EBIT margin to 17.80%-18.20%, from 17.50%-18.10%

This implies earnings of $9.20-$9.65 per share, up from $8.95-$9.60 per share, he added.

WSM Price Action: Shares of Williams-Sonoma had risen by 4.14% to $247.27 at the time of publication on Thursday.

Photo: Shutterstock