Aug 26, 2026 earnings call — Raised annual outlook after strong Q2
Raised full-year comparable brand revenue growth to 4% to 6.5% and operating margin to 17.8%–18.2%.
Revenue $2.0B (est $1.9B) · EPS $2.10 (est $2.08)
Key quotes
"Across all of our brands, we have prioritized incremental newness innovative, higher quality product lines, and more inspiring photography, floor sets, and storytelling."
"We are pleased to have received a refund of $200 million."
"Since the beginning of the year, engagement with Oliver is up 700%. Revenue is up 620%. And customers who engage with Oliver convert at 3x a higher rate."
Analyst Q&A 9
new product plans and holiday offering
Q (Kate McShane · Goldman Sachs): Asked about the pipeline of product innovations and collaborations for the second half, and how the Holiday 2026 merchandise compares to last year.
A: Management said product newness and collaborations are driving growth and they keep improving product quality and competitive pricing. They expect to target more categories in the back half and have collaborations each season, and they are also improving storytelling and channel execution to lift core product.
"And we have really been focused on making sure that the quality is higher than our competition and that we are at better and competitive pricing to our competition." — Laura J. Alber (CEO)
drivers of raised EBIT margin guidance
Q (Baird): Asked what drove the increase in EBIT margin guidance — sales leverage only or other factors — and the puts and takes behind gross margin.
A: Management raised operating margin guidance to 17.8 to 18.2% and said the raise reflects strength and momentum, not just top-line leverage. They highlighted three gross margin factors for the back half: tariffs comping, higher fuel costs being embedded in guidance, and an upcoming anniversary of a shrink accrual benefit.
"I wanna remind everyone of the impact of shrink accrual benefit from last year." — Jeffrey E. Howie
use of tariff refund money
Q (BofA): Asked how the company plans to deploy residual tariff refunds beyond vendor reimbursements and increased 401(k) contributions, and whether they will fund revenue-driving initiatives.
A: Management said they returned money to employees and reimbursed vendors as the right thing to do, strengthening partnerships. They said they always invest where ROI is attractive, have no special new plans now, and the refunds give them more flexibility but no other deployment decisions have been made.
"We are so appreciative to have the money back and to be able to reward our employees with part of it." — Laura J. Alber (CEO)
gross margin and model for 2027
Q (Michael Lasser · UBS): Asked whether gross margin will degrade in the back half and where model expansion might come in 2027 — pricing, costs, or other levers.
A: Management declined to give 2027 guidance but said growth strategies are working and there is large runway in home furnishings and market share opportunity. They pointed to inventory accuracy, supply chain, AI, better pricing, and operating leverage as future margin opportunities; they also noted the midpoint of the raised guide is slightly above last year's operating margin for the back half.
"If you take a look at the midpoint of our higher guide, you will notice it is actually slightly above last year's operating margin for the back half." — Jeffrey E. Howie
comp cadence and store expansion plans
Q (Chuck Grom · Gordon Haskett): Asked about the cadence of comps through the quarter, which banners will drive unit growth to 1–3%, and timing of store growth at Rejuvenation.
A: Management said they won't give monthly cadence but comps accelerated from Q1 to Q2 and they've had consecutive positive comps. They said store count will finish the year essentially flat with 70 basis points growth from new stores, and they expect to grow store count 1 to 3% per year starting fiscal 2027 across many banners; Rejuvenation will be built out slowly and methodically.
"Pivoting to the store count question, the store count overall will end this year essentially flat, but we will see as we mentioned in our prepared remarks, 70 basis points of growth from new stores throughout the year." — Jeffrey E. Howie
why Sonoma outperformed
Q (Jefferies): Asked whether demand drivers in the cookware/kitchen category are shifting and whether Sonoma's outperformance is from new customers or higher wallet share.
A: Management said Sonoma saw broad improvement across kitchen categories and Williams Sonoma Home showed meaningful results, including furniture and 'littles' that help acquire customers. They cited ongoing product innovation, collaborations (Hill House, Oakville Grocery, Le Creuset), and being present in customer communities and events as reasons for the brand's momentum.
"In terms of product and innovation, we have a lot more, exciting launches to come." — Laura J. Alber (CEO)
importance of collaborations
Q (Cristina Fernandez · Telsey): Asked to size the impact of collaborations: change in number or percent of sales year over year and their importance to the business.
A: Management called collaborations "the icing on the cake": they bring notice, attract collaborator followings, drive traffic, social buzz, new customer acquisition, and sales, but are not the bulk of comps. They said some businesses, like kids and teen, have bigger collaboration impact, while other brands are just starting their collaboration programs.
"They get to we get to attract their customer base because the collaborators have a following that may not necessarily be our following." — Laura J. Alber (CEO)
second half sales outlook and scenarios
Q (Steven Zaccone · Citi): Asked for more detail on second half sales outlook and the puts and takes that make the high end of guidance imply a decel in the back half.
A: Management raised full-year comp guidance to 4% to 6.5% and said the midpoint assumes continuation of current 1- and 2-year trends. The high end assumes continued acceleration and a strong holiday; the low end assumes less traction and a softer holiday, and they reiterated the business accelerated from Q1 to Q2.
"The midpoint of our range reflects a continuation of our current 1 and 2 year trends." — Jeffrey E. Howie
B2B growth and AI results
Q (Max Rakhlenko · TD Cowen): Asked whether the B2B $2 billion target timing is being moved and whether contract and trade growth were reported this quarter.
A: Management said B2B delivered 14.5% growth this quarter, the largest volume quarter to date, with contract up 20% and trade up 12%. They see a clear path to $2 billion over the next several years but have not given a timeline; separately, they highlighted strong AI results such as Oliver engagement up 700% and higher conversion with AI tools.
"Since the beginning of the year, engagement with Oliver is up 700%." — Sameer Hassan