Williams-Sonoma, Inc. (WSM) · Q4 2026 results and valuation

At −3.5% growth a year (3-year revenue growth), the model's fair value is $88.83 a share — the stock trades 195% above it. Today's price assumes 12.4% growth a year.

1. Key theme

   The main driver of Williams-Sonoma's lower gross margin was a 170 basis point decline in merchandise margins as the impact…

   Source quote

   “The main driver of our lower gross margin was a 170 basis point decline in merchandise margins as the impact... Moving down the income statement, Q4 gross margin was 46.9%, down 40 basis points versus last year. Occupancy costs contributed another 80 basis points to the deleverage, largely related to the fifty-third week.”

2. Guidance

   WSM updated fiscal 2026 guidance to expect net revenue comps of 2% to 6% and total net revenue growth of 2.7% to 6.7%.

   Source quote

   “We expect fiscal 2026 net revenue comps to be in the range of 2% to 6%, with total net revenue growth of 2.7% to 6.7%.”

3. Figure

   Q4 net revenues finished at $2.36 billion, representing a 3.2% comp, which tracks the company's primary revenue performance for the period.

   Source quote

   “Q4 net revenues finished at $2.36 billion for a positive 3.2% comp.”

4. Fading

   The company reported a 4% top line comparison in Q3 2025, exceeding expectations due to positive growth across all brands.

   Source quote

   “We are proud to deliver strong results in the third quarter of 2025 with an accelerating positive top line comp... And that focus continues to drive our results. In Q3, our comp came in above expectations at 4%, driven by another quarter of positive comps across all of our brands, and we continue to deliver on...”

Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 83% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.

Sentences that drove the tone

“Innovation was strong, and holiday gifting outperformed, driven by high-quality personalized gifts across life stages.”

“We just changed the words “returning to growth” to “accelerating growth.” We are going to accelerate growth, deliver world-class customer service, and drive earnings.”

“A key shift in the plan is a near doubling of capital investment in retail, reflecting the meaningful opportunity we see to accelerate growth through retail stores.”