Williams-Sonoma posts positive Q2 revenue growth, wary of furniture tariffs

The exterior sign of the Williams Sonoma retail store at Millenia Mall in Orlando, Florida.
Williams-Sonoma’s brands received the ‘good numbers’ due to the company’s ‘nudges’. (Source: Bigstock)

Williams-Sonoma reported a positive second-quarter performance across all its brands, ahead of tariffs likely to be imposed on furniture later this year.

The company said comparable store revenue rose 3.7 per cent, positively driven by both the furniture and non-furniture sectors across all its channels.

For the second quarter ended August 3, the company posted a 2.7 per cent increase in total sales compared to the same quarter last year.

According to GlobalData MD Neil Saunders, Williams-Sonoma’s brands achieved “good numbers” due to the company’s nudges to drive consumer purchasing interest, including strong product sets, merchandise, and customer service.

Gross margin surged to 47.1 per cent, with an increase of 220 basis points, including a 190bps lift in merchandise margins and a 30 bps gain from supply chain efficiencies.

“This growing outperformance has allowed us to raise our guidance on the top-line and reiterate our guidance on the bottom-line, despite continued macroeconomic uncertainty and the tariff environment,” said Laura Alber, president and CEO of Williams-Sonoma.

For the full-year fiscal outlook, the company expects annual net revenues in the range of 0.5 per cent to 3.5 per cent, with comps sales increasing by between 2 and 5 per cent.

“The potential tariffs on furniture could be an issue, but Williams-Sonoma is in a modestly better position because of its more balanced furniture and furnishings mix,” Saunders concluded.

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