Williams-Sonoma, Inc. Q4 FY2025 earnings call

• Q4 2025 comp was 3.2%, operating margin 20.3%, EPS $3.04. • Full year 2025 comp 3.5%, operating margin 18.1%, EPS $8.84. • Priorities in 2025: growth (positive top-line comps in all brands, collaborations, B2B growth, emerging brands growth), customer service (focus on perfect order, supply chain and AI progress), driving earnings (tight SG&A control, AI use for efficiency). • 2026 plan: accelerate growth (brand growth, product pipeline, brand heat, channel experience), deliver world-class customer service (AI for supply chain and call center), drive earnings (price testing, margin improvement, sourcing efficiencies).

In Q4 2025, retail team drove a 4.3% comp. Williams-Sonoma had a 7.2% comp, Pottery Barn children's business had a 4% comp, West Elm had a 4.8% comp. Full year 2025 had a 3.5% comp. B2B grew 10% in 2025. Emerging brands like Rejuvenation had double-digit comps. Williams-Sonoma brand had a 6.9% comp for the year, West Elm had a 2.9% comp for full year, kids and teens business had a 4.4% comp for full year.

• Fiscal 2026 comp brand revenue growth 2 - 6% midpoint 4%, operating margin 17.5 - 18.1% midpoint 17.8. • Capital expenditures ~$275M, ~95% for e-commerce, retail fleet, supply chain. • Plan to open 20 new stores and 19 repositions in 2026, net flat store count. • Dividend increased 15%, $1.3B remaining for share repurchases.

• Tariff landscape uncertain, policy can shift quickly. • Macro environment and geopolitics unpredictable. • Uncertainty around oil prices and transportation costs impacting margins.

Q: Chuck Rom asks about store growth in 2026, B2B, and margin phasing.

A: Laura talks about 20 new stores, 18 repositions, net flat, B2B growth, Jeff explains tariff impact on margin.

Q: Peter Benedict asks about design services 3.0.

A: Laura and Samir discuss AI use in design services.

Q: Oliver Wintermantle asks about quarter-to-date trends and winter storms.

A: Laura says winter storms didn't materially impact results.

Q: Kate McShane asks about real estate strategy and occupancy cost.

A: Laura talks about retail growth, design services, store repositioning and openings.

Q: Christina Fernandez asks about Pottery Barn performance and tariff impact on first half.

A: Laura talks about Pottery Barn's category balance and Jeff explains tariff impact shape.

Q: Jonathan Matuszewski asks about pricing and comps.

A: Laura and Jeff talk about pricing testing and comp guidance.

Q: Max Ruklimko asks about consumer health and shrink benefit.

A: Laura talks about consumer response and Jeff talks about shrink.

Q: Brian Nagel asks about short-term gross margin.

A: Jeff explains tariff impact on gross margin.

Q: Zach Fadum asks about tariff rate and freight contracts.

A: Jeff talks about uncertainty in tariff rate and freight, embedded in guidance