Q2 2026 Williams-Sonoma Inc Earnings Call Transcript
Key Points
- Strong Q2 performance with comp sales up 6.2% and total revenue growth of 6.7%, exceeding expectations.
- All brands delivered positive comps, including significant improvement at Pottery Barn (5.1% comp) and continued strength at West Elm (6.4% comp).
- B2B segment grew 14.5% with record-breaking demand, driven by strength in both contract and trade.
- Raised full-year guidance for both top-line and bottom-line, reflecting confidence in momentum and execution.
- AI initiatives, such as the Olive and Otto shopping assistants, are driving higher engagement and conversion rates, with Olive engagement up 700% and revenue up 620%.
- Gross margin declined 160 basis points year-over-year due to tariff impacts, with merchandise margins down 230 basis points.
- Higher oil prices continue to pressure transportation and supplier costs, impacting overall profitability.
- The company faces ongoing macroeconomic uncertainty, including war, rising interest rates, and a stagnant housing market.
- Q4 will face a challenging comparison due to a 150 basis point benefit from a shrink accrual last year, which will partially offset tariff relief.
- Inventory levels are up only 1% despite revenue growth of 6.7%, indicating potential supply constraints and inability to fully meet demand.
Welcome to the Williams-Sonoma Inc. Second quarter fiscal 2026 earnings conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the conclusion of the prepared remarks. I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead.
Good morning and thank you for joining our second quarter earnings call.
Before we get started, I'd like to remind you that during this call, we will make forward-looking statements with respect to future events and financial performance, including our updated annual guidance for fiscal '26 and our long-term outlook.
We believe these statements reflect our best estimates. However, we cannot make any assurances that these statements will materialize, and actual results may differ significantly from our expectations.
The company undertakes no obligation to publicly update
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