Williams-Sonoma posted a strong second quarter, with comparable brand revenue rising 6.2% and total revenue increasing 6.7% from a year earlier.
Operating income reached $449 million on a GAAP basis, up 500 basis points year over year, while GAAP operating margin expanded to 22.9%. On a non-GAAP basis, operating income was $338 million and operating margin was 17.3%, down 60 basis points from last year.
Earnings per share climbed sharply. GAAP diluted EPS came in at $2.84, up 42.0% from the prior-year quarter. Non-GAAP diluted EPS was $2.10, up 5.0%.
Gross margin widened on a GAAP basis to 51.6%, a gain of 450 basis points, while the non-GAAP gross margin was 45.5%, down 160 basis points. SG&A expense rose to $563 million on a GAAP basis, up 5.0%, while the non-GAAP SG&A total was $553 million, up 3.1%. As a percentage of revenue, SG&A fell to 28.7% on a GAAP basis and 28.2% on a non-GAAP basis.
Merchandise inventories increased 1.0% year over year to $1.45 billion. Occupancy costs were $208 million, up 3.3%.
The company ended the quarter with $1.0 billion in cash and generated $696 million in operating cash flow, including collection of $200.2 million of tariff refunds and related interest. It returned $90 million to stockholders through dividends.
Williams-Sonoma raised its full-year outlook. It now expects fiscal 2026 net revenue growth of 4.7% to 7.2%, compared with prior-year levels, and comparable sales growth of 4.0% to 6.5%. It also lifted its expected non-GAAP operating margin to 17.8% to 18.2%.
The company said it collected substantially all of its initial $197.8 million tariff refund claim by Aug. 2, with $3.2 million still receivable. As a result of these announcements, the company's shares have moved 3.03% on the market, and are now trading at a price of $241.86. Check out the company's full 8-K submission here.
