Williams-Sonoma’s first quarter results were met with a negative market reaction, as profit fell short of Wall Street’s expectations despite surpassing revenue forecasts. Management emphasized that growth was driven by improvements in furniture sales, successful brand collaborations, and ongoing strength across both retail and e-commerce channels. CEO Laura Alber noted, “We saw an acceleration of the positive comp trend coming out of Q4, despite consumer distraction with tariffs, continued geopolitical uncertainty, and no material improvement in housing market.” The company’s focus on newness, innovation, and customer experience enabled positive same-store sales growth, even as operating margin declined year over year due to higher input costs and tariff mitigation expenses.

Is now the time to buy WSM? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Williams-Sonoma’s Q1 Earnings Call

• Brad Thomas (KeyBanc Capital Markets) asked about the decline in merchandise margins and promotional strategy. CFO Jeff Howie clarified that promotional discipline remained unchanged, with increased full-price selling and higher input costs largely offset by supply chain savings.
• Peter Benedict (Baird) inquired about pricing strategy in response to tariffs. CEO Laura Alber explained that pricing decisions are made item by item rather than through broad adjustments, focusing on consumer value and product differentiation.
• Maksim Rakhlenko (TD Cowen) questioned whether merchandise margin headwinds would persist. Howie stated that while gross margin pressure from tariffs is expected, the mitigation plan should help maintain full-year operating margin guidance.
• Cristina Fernandez (Telsey Advisory Group) asked about reducing sourcing from China. Alber detailed the company’s flexibility to further decrease China exposure, already reduced from 50% to 23%, depending on future trade developments.
• Seth Sigman (Barclays) sought clarity on elevated inventory levels. Howie attributed the 10% increase to a strategic pull-forward aimed at managing tariff risk and supporting strong in-stock positions for customers.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will watch (1) the effectiveness of the six-point tariff mitigation plan and its impact on merchandise margins, (2) sustained positive trends in same-store sales, particularly within the furniture category, and (3) continued expansion and profitability of emerging brands and the B2B segment. Progress in AI-driven customer engagement and supply chain efficiency will also be important milestones.

Williams-Sonoma currently trades at $169.25, in line with $167.69 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

Our Favorite Stocks Right Now

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.