WSM - Earnings call transcript Q3 2025

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Operator

Welcome to the Williams-Sonoma, Inc.

Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Jeremy Brooks, Chief Accounting Officer and Head of Investor Relations. Please go ahead.

Jeremy Brooks

Good morning, and thank you for joining our third quarter earnings call. Technology with Howie, our and our our Digital morning Executive and Sameer this Chief Jeff Officer; Chief and here Laura President Alber, Chief Hassan, I'm Officer. Financial Officer;

believe like best fiscal Before we call, will long-term 'XX including events and forward-looking make our remind estimates. future We that with to financial during our we respect to these statements and get our this you raised statements I'd reflect started, performance, guidance outlook. for

assurances these may to any revise will materialize, our However, The may results make we these no reflect or statements and actual circumstances that publicly arise differ expectations. statements cannot or any of update from after significantly events obligation today's company undertakes to call.

non-GAAP GAAP we be conjunction to filings appears should These be comparable to certain considered financial A and GAAP in the should that measures with Additionally, measures. considered directly this together for it reconciliation should we not be with our detailed the X read call SEC. earlier results. This refer measures issued with Exhibit replacements measures also non-GAAP will of most release our press the morning. to

of our available will call Relations website. Investor replay be A Finally, this on

to call like turn Now I'd over to the Laura.

Laura Alber

bottom morning, and Good line we call. At expectations. continue you everyone, Williams-Sonoma Jeremy. you, top for Thank Inc., exceeding performance, to thank and joining both the have strong

and share was The profit. gains market quarter driven third strong trends, in by improvement sales continued our

million stock outstanding this Our quarter, in of per Also, X% earnings so X.X% purchased back we $X.XX. comp XX.X%, delivering shares of an year. our this in came share at X% our increase far have down $XXX a with and of margin to operating bought

we've and in about operational difficult year environment, continue initiatives results improvements optimistic on Even of momentum, strength our and we been operating our all Our to a business. our margin are profile. confident the focused reflect the gain and that

we full expect XX.X% in XX We to has at points are our come our basis operating to be year are down perform environment, stock raising in full we business and to now result, year a in raising and a on range almost X.X%, our revenues guidance to due As model range confidence an X% our our guidance. of to down repurchase any and the additional ability $X Board our in approved to authorization. billion XX.X% of margin

to earnings. customer our continue world-class driving X returning priorities: growth; third, service; on be focused key first, to elevating second, and We our

returning Let's growth. start with first to

ran in top the improved negative Our trend line and outperformed this quarter. QX, industry decline we over of though we X% even QX,

better-than-industry design in-house our our Our our performance to on from capabilities competition focus with vertically and our set is design apart a of services. ourselves result We innovation the from products unique compelling high-quality at price our activity. sourcing to us is organization, allows balance ability continue price the gives offer products value integrated points. It significantly that reduce promotional to this us which to

or style of our front, launched the online. customers Style In Shop in design for to allowing boards been and developing any launched customers also and of innovating generation have we design that home. tools move Barn, with design create On size our have we preparing the services. forward design share next The for assist and and Pottery new plans October, we By

The our channel strategy next our to key experiences. component to improving growth commitment our of is return

e-commerce technology. continuously are We investing proprietary in our

e-commerce in the our strong experience. And with final pleased is like capabilities e-mails chain personalized mile, actively are supply homepages our are care our selection thinking and about and content, we to incorporating and stores. discovery from product AI in how into team personalization, performance the customer areas and We evolve constantly our to decision-making and retail elevate best-in-class

events. levels inventory our continued improve new services inspiring to and in-store products, in-stock with and improved have next-level experience We design

working. is strategy optimization retail Our

locations. are Our to we most continued be and locations good in positioned opportunity store inspiring our new the and fleet, profitable and driving to store designs transform see ROI

our Now let's on talk progress third second through and key priorities.

turn, and earnings operating to strong We continue results. service, contributes improving make world-class to progress customer our which, drives our in

service our all-time improved and record customer since have levels. metrics QX Our

reduce and Our limiting margin ahead customer and supply to chain out drill see made, areas lowering despite team additional reducing and continues cost and on market combinations, we shipments, have reducing already replacements. And down continue we as efficiency. to we multiple opportunity for by of optimization returns progress damages more the

is areas its and key like in business. that the fall and industry, saw Pottery us kids been during responding marking update collections fall with the the lifestyle our positions strength for key widespread has and growth last competitive this ran we the performance in relevant Now introductions product The quarter our to is negative our across see and the year, textiles the performance brands. were to furniture saw with our easy positive seasonal The seasonal no decorating new SKU Barn drove in improvement divisions We by of offering QX, offerings. in our Pottery quarter. significant Children's assortments brand, growth. especially comp ran representing comps offer improved comps. in product In seasonal comp Pottery uniquely on for third market compelling are delivering in offerings a products new quarter. brand in a the year, home. X.X% ours. This that update a consecutive Thanksgiving launched offerings we We to quarter, fourth core. have continues newness and positive Also, and you the highly to are launches our in Also, In in to driven all of of additions innovation new and strength is quarter a decorating Holiday of the I'd X.X% Barn the there Barn business In of comp holiday and comp proprietary brands QX, to decor. Innovation portion the furniture the delivering in strength business the of like particular of the biggest for pleased QX. with entertaining reads. and advantage customer our early believe we up

We are furniture, particular products strategic which success and was success a One highlight product celebrate kid-friendly has seeing our been bedding new collaboration, focus. fresh holidays. the with with to

have Pottery grown partners with key collections We to our Chris to and brands. delighted all successful line the are Julia Loves our of expand span Barn

trending We partnership. also strength our Fancy continued in see LoveShack

a look fuel to robust continued ahead, the we exciting As of innovation we and pipeline to in channel have partnerships products, new holiday quarters growth.

comp a let's Now West X.X% negative in from significant a West review ran improvement Elm QX, QX. Elm.

proving season for always will and Elm drove product of furniture to intros Holiday, impact which this innovative is comp furniture. textiles, a overall also Fall start products furniture, double-digit with seasonal off strong. and Elm's West is is year newness, that demand good While was macroeconomic in factors continue biggest to resonate. kids newness positive strong particular, positive new consumer in double-digit West comp

Fashion West Additionally, customers kids New novelty following. the bright, sales. author Ricci Elm launched articles a secured fashion The Architectural publications a driving Children's and Chen dwell.com Cat Halloween our and social pieces with ], who are also Tastemaker actress' with brand has Christina exciting Press, colors, September. and launched [ in Digest, collection York This Forbes large collection, and with very Magazine. The popular Full is Eva multifunctional collab collaboration Book furniture and like

Elm especially exciting the positive newness in with the collaborations. thrilled are momentum we're seeing in business, the trends West We and

items about Now electric, the continues At product let's mixers. brand is especially Strength essentially The to new, was offerings. celebrate in quality. tabletop exclusive strong. in The brand, talk innovative Williams-Sonoma. high-ticket in focus design brand flat QX. machines Williams-Sonoma on stand espresso we great and and Williams-Sonoma continues and Also,

of KitchenAid We Mixer. the are thrilled and media the Evergreen new consumer to to the see response launch

world year's GreenPan Ina which several Thanksgiving partnership exclusive the of for QX, business on evolution quick launch key tips. new launch our the of embrace to a wood our KitchenAid new Our at an additions hosting Williams-Sonoma the catalog Stanley and is the the the and an Ina benefited design the food cover item features with menus, collaboration customers launches in and also to chef Tucci popular of brand. The iconic Jean-George a green-based recipes including cookware were famous this of Thanksgiving Thanksgiving collection, mixer to full with Garten. look from collaboration

also supporting a Ina on be book bookseller the to team X-city proud exclusive as Our tour. is

In hosting top QX, addition events to influencers Eva her chefs, Longoria tour, Williams-Sonoma and held more like popular in than cookbook Bobby in stores. XX celebrities Roker and signings and our Al Flay,

party. up business customers I art table, in said, for the QX people As a also has at content home. eating and host to and a keeping stock robust drive set gearing Williams-Sonoma growth were season at designed bar holiday campaign by marketing of prioritizing tabletop the entertainment a launched as our a was strong

collaboration for recently Young improvement the across by encouraged with products designers, artists with Williams-Sonoma business Josh provisional and features Williams-Sonoma We Home also the popular are a categories. collection beautiful products Home art. by We inspired of expanded launched whose

JW along Now with QX in grew Living Las Pappagallo, partner Spring and companies, in XX% growing The delivering I'd represented initiatives. with to while contract update history grew X% its largest on X%. business like momentum, other its Business-to-business continued The our today. you of business XX%, trade quarter contract Vegas, quarter. this for Senior business related Sony, quarter Carlton with Hill include Ritz our Hanover work the office wins Marriott, Project and projects BXB and Google Sunrise continued Suites. the

with to be on ramping we moving our QX, FY strategic focusing and gifting development growth into move along our into pipeline our beyond. we to excited up As and opportunities program, 'XX are growth continued support corporate

In about strong brands Thanksgiving results BXB markets, Now performance in global our pleased successful business, I'd design India. driven to and report like across and key across our season. to talk business. Canada, We're all strong including was Mexico Canada, our

and We're In store brands for to new positioned holiday presence in unique to Elm, for Kids XXXX. offerings, Barn market to our Barn West with and we excited product share Pottery a due in X well strong Mexico, season. are gain and Pottery openings early continue expand our our service Mexico

the is India have present Elm in of We'll forward Kids products enhancing services and decorating market Mason and the holiday around also partnerships X U.K., the this quarter sales Elm opening India be and globe. and Initial marketing Lewis XXXX. In to for business season. West brand our the look West our inside season. we opportunities demonstrating in increase and design additional John Williams-Sonoma strength festive our and the for we Pottery selling be awareness also Portman during first in partnership renewed the during promising, are Our Barn growing, these an this with in stores and we're proud to brand in

emerging Lastly, update Rejuvenation I'd to quarter you strong performance on of with double-digit continued like another brands. growth. our to have

continues, launched our decor. online to collection GreenRow coming to In months. with our its continues partnerships at bathroom and to refresh your home Graham home finally, customers. of we Graham strong gifting and Also, trend sourced and for which for look In new Graham, with bright, inspire and increased our Please launched exclusively with well products and with fall show first unique X Inc. success continue these strong the Shop to gifts particularly in their Rejuvenation. trade Mark the furniture businesses seeing optimistic in material We're products our kitchen of are GreenRow or its go in-house seeing and innovative both GreenRow, customers forward both We out. And furnishings. in summary, holiday Mark to. brand, and Williams-Sonoma, new The proud of and are & upcycle remodel designed of and check the new use categories. We're in presence with designed and we're and just vintage-inspired gifts results and textile Kids collection out launched The At we season, consumer to of it high-quality, Graham incremental and in-store handcrafted October, and of and & to excited Wedding thoughtfully offers the brand and pet responded continues holiday all Bark collection grow roll thrilled have growth outperformance brand lovers. assortments its brand success also Mark many our at and of colors. our updates, collection continued new we newest

of Our strategy returning our enhancing to working. service and driving earnings focusing world-class on growth, is customer

are we As we the and head into the confident. year, last quarter of optimistic

the to smell are the the and are you and wish we a stores come when year you shine, This is can location set. The we of week. holidays. aroma twinkling we your very you music the Our and is family happy of up on, to visit welcome Thanksgiving time and next the lights sincerely any

vendors say continued to contributions a hand performance. want dedication our team, to I and I for to Before their our over our minute it all of also thank partners company's to to and Jeff, you take our

Jeff of it you. you grateful detail. over more for that, numbers turn through outlook I and will walk are to the in And with our all We to

Jeff Howie

to top line share morning, Thank gains surpass top both Laura, good that and and earnings marked by you, the on line, everyone. improvement in bottom expectations the report We're trends, robust proud and ongoing market performance. sequential results

results key quarter X this our profitability. Our reinforced drivers the underpinning

sales revenues. of at total with mix margin sustained XX% our e-commerce First, higher its operating

Second, our strategy, occupancy expense additional inclusive supply retail investments. less optimization X% technology year, than delivering and last of chain

fifth, last improvement chain to contributing selling ability on we manage ongoing our margin, to cost in point our producing efficiency, Fourth, to our our costs Third, emphasis from to line point last full year profitability. And merchandise share. selling even XXX XXX a improvement bottom control in margin. price to gain opportunity as savings basis our year supply to basis achieve market

flexibility, this earnings quarter of deliver almost and operating to the strength results environment. market our drive any and share in durability highly demonstrate Our gains model profitable

We into dive with numbers. coming $X.X the outperformed share quarter. let's results reduce a in with then X.X%. we which and promotions declined 'XX. above industry, the we gained Now update as as overall the on for negative finished provide even by of at approximately of guidance I'll in comp our market revenue expectations, continued our Net an QX billion level X%, start to

choppy, cadence the in improved uncertain continued our the growth our across in backdrop. reflecting of comps nonfurniture From furniture category. quarter QX trends were reflective a Our macroeconomic in and performance better QX, perspective,

Moving There efficiencies costs. statement. margin chain last XXX exceeded basis at year. down points behind in XX.X%, higher and drivers the to Gross coming improvement. this X income than occupancy margins, expectations were supply Merchandise

our with which driven margins, selling. was improved by and points full price start commitment input Let's XXX costs, lower to This to basis year. improvement merchandise last

in basis to XXX the Next, supply contributed year-over-year chain margin. points efficiencies, improvement gross

from expense. chain, We at continue by in driven cost delivery operations are in less consistent warehousing selling. to realize These more manufacturing, savings the reflected across savings efficiencies supply improved and promotional

operational occupancy X% are finally, these our than gains costs, and including level. And shipping last importantly, as returns, key per a percent replacements, year enhancing damages, deliveries all More of out-of-market down which accommodation, flat and better metrics, are prepandemic multiple from customer service. revenue. order were

higher our this expectations. chain. supply leverage investments our in continue retail strategy, offset We and gross optimization to world-class margin see quarter our occupancy our technology retail deliver in our by exceeded Overall, our

benefit from partially now higher basis to SG&A, expenses. advertising which employment at Turning lower higher from during Employment basis invest incentive in higher the strong expense general expense we to mostly by XX.X% revenue spend, of came or our higher from XXX expense points performance-based than quarter. Advertising XXX deleveraged points continue compensation higher offset performance XX due ad EPS higher points last and year was in basis year-over-year, employee costs levels to spend. of and as the

advertising Our is powerful advantage. a competitive model

incremental basis approach in-house. General maximizes effectiveness while our the of leveraged portfolio timing insights points expenses. ROAS our spending, administrative allows keep of our expenses investments the and of test valuable XX to Our multi-brand from us hands-on

bottom or expectations. exceeded $XXX million, than was margin the year. $X.XX share to at basis XX.X%, finished last at XX up income X% came above our earnings year. year. $X.XX On last Diluted X% of points per last line, Operating earnings in which better was Operating

This with repurchases shareholders quarter million our we a to after quarterly supporting sheet, million $XXX growth and invested debt both cash balance million ended in the $XXX the was and of with through no returned capital On dividends. share $XX we outstanding. our long-term expenditures balance we

or billion, Merchandise X.X% our up we quarter shares. outstanding Year-to-date, to year. inventory repurchased repurchases. $XXX $X.XX the share of of at last X% ended million have Speaking

for QX to in these at well Williams-Sonoma upcoming results. time like work another and our expectations. of XX% revenues team up to have quarter inventory that are exceptional levels results delivered We're up dedicated exceeded support results. with our inventory Our talented, proud XXXX, to levels Inc. to that our the thank are season holiday positioned period. Summing I'd their only achieving compared up over XX%

to let's 'XX our Now outlook. turn

year is Williams-Sonoma, XX-week 'XX reminder. Inc. for The a a fiscal First, year

fourth quarter So weeks. XX consist the will of

comparable weeks. weeks We will versus contribute report points XXX on margin, XX comparisons will which versus week week in week other All We will of embedded are year XX XX basis. XX points a guidance. and anticipate revenue to this basis basis XX year-over-year on comp additional be to operating annual the both our

Now let's talk guidance. through our updated

about year. and to results QX optimism our raising seasonal our are reflect full all our products furniture guidance with improving our performance the QX year trends We strong and of strong

range market, calendar guidance Holiday and a of the considering shifts, our economic uncertainty, possible housing slow contemplates outcomes. However,

line, we revenue in net down 'XX guidance of range to On top down X.X% comps our with to X.X% between X%. the to year full the X% raising down are be down

guide of from a midpoint guide end of season our environment We potential QX high trends guide the the into for macroeconomic believe the implies QX The reflects end a QX. continuation reflects of and strong the our on the impact our low greater of holiday results. our

On raising guidance, 'XX full margin basis a in our margin a from QX XX.X% benefit of points the will based the operating increase, from the operating XX.X% 'XX are the will range now QX out-of-period impact our the full basis which year point the we XX performance. full XX.X%. range of year operating basis in upon out-of-period now XX QX XX.X% adjustment, to adjustment. our to be bottom year year point full line, be XX includes margin our Without With

anticipate with operating quarter. in XXrd on materially without line week the of benefit be will to continue margin QX XXXX the results We the our

be year our to $XX income to be expect full our million year rate tax XX%. Additionally, effective interest approximately we approximately full and

expenditures to of capital our investing XXXX strengthening amount, capital we our growth supply and million our XX% efficiency. Of enhancing will business. the $XXX on e-commerce allocation long-term support trend, be focused to this in our leadership anticipate Turning chain

to our excess to shareholders through dividends and repurchases. quarterly, communicated As we've cash we're returning committed share

our continue has repurchase authorization, today, both will authorization dividend release billion expectations we results and pay Board our We additional of returns repurchase the available existing have earnings our on my comments billion of deliver share repurchase announced Directors QX, to shareholders. Wrapping Combined in now opportunistically $X.X our conjunction stock on we deliver proud our quarterly $X.XX top approved we're our for share. nearly to to In authorization. with $X share up line. bottom with per that Laura's and the to exceeding an

For key business the we're elevating strength market environment. of share on service and highly almost 'XX driving X and in durability the confident our remainder our profitable model drive will and focused world-class earnings growth, of our returning gains priorities: flexibility, to earnings. customer We're deliver any

we we for as beyond in 'XX per 'XX, provide fiscal As will look practice. guidance standard year March our

to Looking deliver reiterating operating that long-term growth, are mid- single-digit further high in growth shareholder the to our and into consistent. outperform high teens. these remain to mid- for guidance revenue X we the future, confident continue We're of with our reasons peers margins we'll

in Our share and sheet. With first resiliency not The fragmented I'll our our strategy. of ability of of for digital ongoing but growth quarters balance strength our that, of furnishings advantage strength design, call industry, the open the the market home digital gain to our competitive initiatives the questions. proprietary in-house omnichannel the

Operator

of Fernández first Group. Cristina [Operator line Instructions] will Advisory the from Telsey question with come Our

Cristina Fernandez

seasonal ticket is in ask commented saw to and working it well. you it Furniture, seemed small was the I really about better. wanted Laura, furniture, particularly you quarter, like the that slightly trends in

is bit that there? what any can big-ticket talk to a to items. about on you're consumer spend you signs seeing more starting So the want And furniture

Laura Alber

the also we've a the is at really as consumer. hard And than talked seasonal it assortments, optimistic which holidays better Barn less It's that's a partially seen the like have going seen us. We probably and all related brand more Look we're and in off those for across a seeing we Christina. our this we consumer. really everybody going comps, in lifestyle Elm see bit because our to bring collection exciting brands, best us exactly business. our those works Thanks, West we're know it item. results the we're little our good furniture board. with lot on only life-stage for of great the newness about, And maybe and And brands. generally results slightly in when which that what's improve is is news Kids really work, to quarter course, year just furniture especially housing, But so businesses thinks, we've opinion in into new are Pottery we're bring Sure. on you X about also why furniture and our did than

good that you whole will can for see come. just newness So you table. expand a And sell, collection you the might out into bring noncomp look, of coffee that in a that years yield to when franchise really

Cristina Fernandez

Jeff. And then for is my follow-up

the the the On It guided would the in why in margin, lot a this quarter, to And quarter better upside? flat. sales was you fourth better. outlook? operating continue came Where not with that

Jeff Howie

and look, Christina reasons. mind. for thanks probably of X on question. But know everybody's exceeded expectations margin for asking operating that top QX it's I

First, deleveraged in thing breadth sign the way why anticipated quarter customer attacked full efficiencies, and gone the the I've and complement the our second, we smoothing op QX. beat costs chain for really a on out the the touched their talking diligence on we consistent I came is and on cost and driven peaks stronger delivery which than the in product and troughs after consistent significant more on were all activity. really third newness focus service supply offer. And input QX better our entire we about merchandise margin to the lower price savings. And delivering than and we that cost attributable for of to savings manufacturing, have organization and price been operations in supply across in really year, supply really selling. chain pricing expenses by focus is they've our response and see commitment this, Laura also warehousing and selling, to continue by our promotional these positive think and to expense full we advertising the less really This driven And chain margins to assortment our

We continue spend that adjust effectiveness. evaluate weekly to we see as and the

think -- the QX really for tough profitability the to testimony deliver environment we continue it's strong home a I to how is despite results furnishings.

part continue wouldn't As Our your into guidance question that of why QX? is, -- you, far second the thank QX. as

guidance there's Our based trends today. in that upon is factors the make we facts know very And few a and it QX unusual.

potential one you holiday first might the that levers it an flexibility the in to to other the gives results. operating gives and in respond flows. to quarters us take flexibility in business it The the year, but we to is us as as be and business this the leverage talk about shorter extent hear any lapping the greater the then the changes really the reduction finally, in business shifts today, market. and might here's seen prior second the we guide housing there us there's it in the QX calendar promos and margin But that and reading so to and you've in ebbs economic quarters. the in we'll look see guide a the thing. upside line holiday line upside is with bottom because We that than And environment others the we makes on Thanksgiving where And our top late period reflects the impact piece less difficult. And was the pull for deliver shopping started offset slow to revenues line, one pull know

Cristina Fernandez

holiday season. And best of luck this

Operator

next line Our from Peter Benedict with comes the of question Baird.

Peter Benedict

kind on lot just and been at First, my season. that least late. competitors responding little tactical what to have just And year? how on very comes first to holiday and going maybe planned events last curious little from consumers getting and a guys bit strategic pronounced some maybe from you relative they're of maybe promotions seeing with that's you're for and in promotions promotions. you know to your of we're more this the responding, but question. approach it more how from hearing more a you in this a space I'm I this been a are marketing holiday time, holiday, guys to of that's have folks, when That's use

Laura Alber

Peter. the Year, but nobody Okay. And going things the people Christmas, have entertaining, from in there's you've Halloween, to Great. from the that show Thanks, is as decorating, we're the or gift holiday about does New part Christmas, huge in to we fully That one customer that there when headquarters that those how know as the as who recover in and and the is stores the in been go has on it's as incredible is malls, flex it giving, something go we Thanksgiving we continue Thanksgiving but beginning and exist we have the malls this year to going that. holidays. our your are don't who if I category, year Hanukkah, And not just advantage holiday to big in very no excited top competitive a put furniture a and core thought. wasn't is to Easter likely that soon of of to that you foundation house. And business the said online we the we now and X that earlier assortment have the integrated you we it's saw that year, of but all things together. a furniture we knew still deal, already and of very relevant, early, to particularly

promotions. pricing just to pricing, versus relates call As out it let's

sourcing an platform. have We incredible

prices. We ourselves get a with worked better result, for design them decades. goods, as have we And our vendors with we own We source overseas. our people

lots loyalty. have of We

you stop over And last has working. the reducing loop, you're been many promotions, We you and great we times that learned in from decision, prices you and good have this that. We've years, several Once it, can't the have it it. the we constant in we level made comp to this know pricing and been to in and promotion. approachable that know, bad stop with business reducing have of And business, up-down reducing quality. in as and

have know weeks. So doesn't on to give if X incumbent that that the to time make better they're price sure like that the customer retailers to the see sofa the the also to in on for we have price is They going wait us a it's first great customers. value price. But

competitively same we which anyone and we every And been reducing level very have to with the we Jeff design are promotional. it us think allows all be quarter. said, So quality, priced as in versus of still less very,

also the there's buying still we less as results. to have because opportunity We reduce newness winners lap great quarters, but these to and seeing maximizing better in we're of a job selling it do

And back when buy those our better another so things getting and margins into strategy. of we in, is part key back buying

Peter Benedict

helpful. the It talking opportunities if for the about see additional forward, efficiency put maybe opportunity. the the aside, going that how out we most that see demand and helps for optimization to me as of smoothing you you kind you're where buckets leads Jeff. are smoothing other or supply some That's chain. maybe out on of what look demand most mentioned you and -- you the next Jeff, mean I question further my

leg curious all You've great job kind a done that? next such lie. the so on savings might of of Just where far

Laura Alber

Well, talk that. just to about

in be And service. tremendous customer record specific delivering brand to efficient. where go still have room been has built service But this we loyalty. have We to we more areas need even customer

Sonoma our conversion furniture deal. that that beginning to is did hub, Arizona we at the drilling in out cycle. -- we're are supply a in out one new full we big down chain a of remember, every DC this of And that our in CMO another. the year into area. Cove. building, So just did And of That's every We facility

of And we believe with are in done lot efficiency. So supply there's chain some areas. that of we a those efficiency don't

also continued and centers from well. We are better in really quite old some continuing footprint. retail remodels. occupancy, reduce cases, is less have close we others. And to our where that have profitable brands we've new honing our and our really also in opportunity been our back, stores are increase we execution and Retail stores centers, some and doing move some are good And seen results retail to in them lifestyle and

with going same the we we and can in of that also sellers to leverage. We per is more box, example help another can occupancy square size foot? believe do that's our So us

ad this customers the term and use of competitively to a the driving traffic driving our customers both that into doing with is brands influencers is to The new gain long bringing and we And terms that area of work term. gain costs, in and heat strength In stores. an we're for it and brand is short ours. collaborators share

buckets. we're in opportunity higher, to and the obviously, So efficient continue that drive to to driving, both areas are believe another actually our early us to at we which there's really to then areas of in the be sales. Those big drive cost very bucket. are continue there. And to in large see more is collaborations also company, and Payroll sales good also other you're fund testing but going innings

Operator

Goldman Our next question comes with from Kate the McShane of line Sachs.

Katharine McShane

when you can introduction, a furniture to given have if follow just earlier muted just innovation product Cristina's view and wanted grow the you've new that, turnover of furniture could sales with ask XXXX? again, sales on to if were up and on housing I regards remain furniture seen some in sales success with and stabilize question to

Laura Alber

We're improved total doesn't what improve believe on furniture, to to us we There's comps there's doubt, improved furniture hard yield muted, no to working have better assuming the so continue -- housing why seen for newness it, seeing, our business to will comps mind. We turnover percent in based the is we're improve. And too. that been which despite them housing okay? in newness us if you've have opportunity to we've that our our improve continue my remains consecutively of and even results

our will it's not our collapse collapses. huge a that's swan our operational in contemplated we can not black a normalized us improve things that something business. that's if really housing think -- Now a help something. But the if or and or environment, furniture it's execution Obviously, event we control

On we'll the furniture. results see you side, very flip housing get big rebound, in good

housing don't date I I your as of for you. that as is sorry have I'm mine guess But turns wish did. a So when around. I good

Katharine McShane

if just you anticipation some grew second know was I of you any And in we We pull like going then wondered with that noise quarter. was of about And you did inventory. Okay. the It our in election. strike. And the but question environment? lot port forward a now are there on around that remind X.X% still uncertainty the was looks you're higher us the operating in to how Could much through there's of regards that a around tariff thinking how tariffs, about mitigate? can inventory

Jeff Howie

inventory forward in and positioned factor X% up was with we're positioned inventory guidance in can in question we're Yes, really XXXX up big That on ranges activity? and a about And stock, of And you've revenue about Kate. our well we've for of And port end This holiday at last did your the compared strike if growth really for is over any see we of being the are pull our wasn't terms holiday, Thanks, notably, you the us. the for only that's in website, regarding XX% our stores, XX% year. been that reflected of the levels provided. for quarter even and time. stock. versus some of in well that getting that Yes.

has last China our changes We've that in and what's want In remind just to time on a uncertainty to lot been environment. first, came not time the there's everyone this and terms of leader happening of the a of with this. And our proactively at there. And tariffs always a that, first outlook changed trade it's up. responding lot terms but in

to First, China-sourced reduced years. goods the from XX% few our we've XX% over significantly last

significantly is than last less the exposure in XXXX this we activity. our So time that saw

domestically talk facilities The and enough already manufactured that hub about. Much is for upholstery something Second, Inc. our U.S. major don't I is this is Mississippi. our manufacturing Carolina North in in a and we of Williams-Sonoma think

in of the favorite Our the lighting year Bark, time Francisco portion the is our this and In San Oregon is made everyone's SKU Rejuvenation large here is Area. a of from manufactured in Williams-Sonoma Bay produced domestically. assortment Peppermint

mapped conditions our the tariffs. prepared warrant, tariffs quantifying to plan a increase. and We've to if out further we're exports to we're category-by-category if reduce China currently from Third, evaluating reduce China additional and impact sourcing

wide have of mitigation We options. a range

and But countries everything point there we goods. other some the sure will probably on that I'm uncertainty pay is 'XX may to We're fact, supply a away, as that that exclusively be move would is big the now. of advantage. made table. vertically it's vendors in own the And the a own a overseas our working want sourcing to that. is boots here's lot designed managing competitive for at right some the best-in-class our operation and the our In really to sell that I things sourcing on XX% strategy and brands. integrated of may some our some, some shipping. through the global We'll production take and consumers thing we really you landscape as front-load is proprietary and pivot. But decisions, chain XX drove We offices, in-house operate are well. changes, we with strategic ground scale have products

changes, have We to States are scale importer landscape in the scale XXth being largest not. so as strategy container the relationships others Punchline do tariff pivot. and United we have the and the we

Operator

of Jonathan Our Matuszewski next with comes from question the Jefferies. line

Jonathan Matuszewski

magnitude And first I magnitude the for The them the [indiscernible] new my of maybe introduce to contributing newness relative question. any it's last? one year to 'XX? on in bring newness. of the of kind aspirations hear sales first frame [indiscernible] That's collections this you that was

Laura Alber

we've they've has the you important parts at West particularly return to that in in to assortments, in And furniture Furniture the say, and non-furniture also compare in see percent before a the of West of newness. them. I've all And XXXX, categories, of substantially the the from Thank Elm And should to newness scale XXXX big is West Elm. department they've you seen Elm to some growth amount and strategy Jonathan. which newness Great, increased then seen benefiting new across of our an Barn's total, and you Yes, you. area of look and their introductions. when a holiday been clear opportunity innovation to strong for double-digit is really positive increase I opportunity also product and opportunity. in really beyond. areas Pottery response are key mentioned comps business in the

and seen from premium pushing also that really newness been is seeing and the response in found electrics, in in have results Sonoma and decorating, brought new and and newness, Barn dorm been seeing seasonal tremendous collaborations have kids LoveShackFancy and they great there. Pottery really big collaborations exciting seeing pop on the So building that's cookware consumer lineup holiday newness the in we we've that the good and team especially Williams-Sonoma, response. And we've baby in. seasonal newness brought and and our in furniture only we there,

So of it's very they And in numbers, the It's to terms a of although important indicative competitive quantifying It's newness. how across this, quality on it it's may increases. area. double-digit the us, of more categories. be the is

of making bring have getting it's balancing reason staying key that market. And assorted. to we're to our it's and and going think that and power not pricing design to So I us continually work newness that it's own a them we well, be incremental part over just and products sure going that truly really to ahead to believe giving and

Jonathan Matuszewski

inroads. update digits make this is mid-single on there how a to approach Maybe That's up really your helpful. trade. just us continuing and Looks you question category could X%. like down And on quarter, your business

business are you anything terms lately future? And designers for your doing working in of so to the plan and their with get

Jeff Howie

Yes. Thanks, Jonathan.

Our we of doing trade a local retail designer to grow credit, seeing in a ask designers a in out teams that the our year X% to interior to trade trade did quarter been taken of this X% a they're year. And works performance retail done all business really pop with and it's teams engaging early little stores. the good set the really interior goal have retail the explains it's job. within up community. designer that reengage with community. And we're outstanding teams increase our that And A our lot is our the the trade really why and quarter store on that business bit. this their with that really that And and have function

business $XX And accounts our scale a variety our market, disruptor the the bringing the volume advantage, favorably of we where we that it's of the another trade chain business-to-business XX% it's XX% really contract have really really of the QX. overall that business, important share. compete while And about. supply the in a think And really lot about brand, gain to growing our for to is that a of opportunity we of we in side this and note quarter. billion becoming a I market competitive where are excited and had think component it's have quarter, in BXB that outstanding of and assortment,

Operator

next [Operator of with from Simeon Stanley. question line Instructions] Gutman our take the Morgan We'll

Simeon Gutman

have us about this I ask selling. if but we don't be on will quantifiable, a product know you'll going how go? is price don't asking type ceiling, is is -- what think does it certain what tell should if sold to much clearance, I And the to is, run I'm full that rate accelerating? suppose? mix gets we the more rate ever business And And have of ceiling I do that some that reach of accelerating? a amount run

Laura Alber

from continued start just have year. And without stance reduce I'll the pricing. we the business of last running absolutely by we're the amount promotional to committed saying to

always We take markdowns. do we'll have take said markdowns. We

And better sales so us have you'd markdowns. a in environment, of course,

You have actually scarcity. might

So could happen there time we're chasing actually where less see goods clearance over you that and are goods.

too. priced regular clearance improvements comps, We in is great which great our are our is inventory in shape, and definitely seeing

go said, some liked. less cut And we've will than go earnings to and That others there like said choose before, to that the does promotional to Pottery Barn roll-off made pricing. going up-down said As after I clearance operating sales. not that are we have mean like inventory is had as that than and to And more more we the in always decision, there's would we're Jeff pretty just brands And had we've out comp clean. that. point to QX, we

of easier to we've that expect go the understand substantially, is behavior, forward this so And lot and us. because do kind all reduced cleaner I of to be a going for

Operator

next from TD Cowen. Max with of Rakhlenko line come Our question the will

Maksim Rakhlenko

did think past, that regular just the business was think occur from that. And that learnings Great. business. Curious, this again? you've discounted key your why and your I price you promoted is Laura, that phenomenon occurring the outcomping do noted in or this quarter once

Laura Alber

have sure. Regular we And reduced is Yes, the it. to substantially. as much because promotional we're year Yes, reduce the true. last continued reducing as before, to the that's outperforming year price

so I said, And for on trust good customer them the because as can we us pricing for margins, it's They integrity. actually the don't have having good it's wait. to

Operator

next of Gordon come question will Haskett. Our from the line Grom Chuck with

Charles Grom

much the here in If unpack that curious much of sticky? you year, line, than sort you I'm to hope third start where X,XXX words, structural? about if next see of cost can how the how all to you points other possible In that as be see were click of roughly on think top as in improve, your quarter, better goods of we it's double we sold I XX%, is the third line you're basis which quarter which of XXXX.

Jeff Howie

can within confident operating what's happening I really XX% Chuck, pretty mix margin. And the think we talk our at I E-commerce about of sticky. We're it X really sustaining. goes lot drivers gross in it back to and is sales be think margin. a

with XXX merchandise focus team, strength results selling compared have supply less That a that pricing in. expense the chain to big the that elevating full improvement is the second design knows of about products. That of our substantially benefit in-house higher comes proprietary in has the operating optimization the profitability of with our retail are our consumers. the resonating chain of of e-commerce XXXX A everyone power. comes our about the obviously, of less price is retail on and basis been competition margin we our from since And and that margin that Again, I a and the last points think And part occupancy for given our accounts driver X,XXX. our kicking also efficiencies. business. The big strategy, our also occupancy.

we of mile. of our own are our I levels. at You've X-minute heard And Laura performing look better here, how this about that the prepandemic KPIs is all or and than metrics talk internal version

human X-minute able as even a that was that mile. It the If a soon thing mile. Well, one X-minute break for it us. everyone familiar for thought run to to there's beings way with And happen. you're can person not said no same run story, able was as years, was couldn't that's was that it,

do said, years, KPIs those, a why ran. supply For chain try and question at think And we simple those even not we they soon that." those that's those opportunity thought here." So team's we said, levels. better. let's at they to an us. our we're a they know only about back metrics more do level to levels, get for are these our pandemic, we as is bring. we "Yes, ongoing to credit, certain well, we levels, actually and do Laura had go to see think as can And I excited achieve And through you And this that of that ask what way what, there's those "You they post said, but run as the business just can

level. transformed since key the can profitability think a we've operating at these is our XXXX, I sustain point higher and here margins

Operator

question line Brian next Our Oppenheimer. come will with of Nagel from the

Brian Nagel

a prior to want just back of questions So regard to the go to with couple sales. I

the quarters. So phenomenal you've difficult through been job done a has business managing now I environment a look, demand several mean, what for

down data in here, you're the looking in in categories. sales wins suggest QX So better your if starting QX. But aggregate, in see to at the I'm versus X.X% some down comps were they X.X% this some comments certain

on it But like stack is there. any business better slightly basis, actually seems the decelerated. mean I So

will I you articulate, second, starting am of I then But So to to better -- twofold, trends at weak? data offset see correctly? sort those you're what's sales question looking as what's keeping sales what's the my guess be the offset -- keeping the these

Laura Alber

talking still weak. we categories as improvements are And is that first you lower comping them weak, us is have not the been sales. sales gave call some we're answer. but furniture, in And could you furniture will, just positive, some definitely then relatively quality that say that what I'd promos forward, secondly, the about has much right? So Well, as that and we're furniture pull

the would the up. And and on which but about are picks used areas the business stage our our coil word pieces we've be furniture happens is focused of been this life so the holiday We've spring we And can opportunity. stronger, imagine decorating, you platform. knew what when

on We've been sales picks operating this margin we've down have up, when that been We said doing. with environment. focused a

of negatives cost So tariffs there's if can margin if improvements year, are if imagine next other increases, have there you sales even leverage even kind even something, could operating up, pick if operating the us be some should on margin. cost we there that sales

Operator

the Our with of final line will question Wintermantel come Oliver from Evercore.

Oliver Wintermantel

leverage, what leverage sales to out get to how need years, on your kind your over some would comp taken Laura, point, the that compare pre-pandemic? sales And SG&A? to to with just see few last cost do Maybe you of that

Laura Alber

not that Yes. number There's relationship. not of I the comes it's one box a choices. mean, a out in goes a number lot like other there's linear and because

you a for of so and got didn't know can't something to you've next always different in variables, have life the like all game thing it's deal that predict you've And you with there's expect you -- and and to have growth, you invest opportunities. that new seen a with you

costs. You more can on competitive be ad

say lot our have that buy the different We so they most lot all on brands is and them what come these back. us a online. of brands the best a mean they all best this heavier. being And what customers, our ticket. the brands them operating think not to goodwill the customer eye can't been trigger results environment. fit with vote we day And they consumers. push our on smaller trust same that they is stages, stores have all see in And the results. Because the built important think margin. of I sofa, a we here our we give for product. mind's may there's the competitive have that online they talk sit the our they And something of best So better do important votes, designs to sweet we're of love years right? which pull value. of excellence doing, get few with a that. But what things in to see and lot we our can we've at is. customer I'd want that We decide over quality, about the on end service, spot the makes can the They we thing industry of of driving these the it that in calls why shop so our and A on up to their people channel even tough of that's And because say them price we people big loyalty based built and because is will have not our much that I

Operator

call I to will over now turn the Laura back for closing remarks. Alber

Laura Alber

Thank We'll a like go talk to Thank you. this at March. you holiday morning. again thank shopping. all course, you. you as here please our of say, in I season. us for Williams-Sonoma enjoyable And happy Well, And call joining stores Okay. and all into of very again our wish

Operator

for conclude joining. today's Thank call. you will That all

You may now disconnect.

Williams-Sonoma (WSM) 20 Nov 242025 Q3 Earnings call transcript