WSM · Williams-Sonoma
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a weekly close below $240
Note written ·
Price against the kill line
5.9% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a weekly close below $240.00, on record since 10 November 2026; only a weekly close settles it. The shares are up 6.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A weekly close below $240, the level of Evercore ISI's price target and just under the 50-day average, which would show buyers giving up the post-August recovery. A cut to fiscal 2026 guidance below 4.0% comparable growth or 17.8% adjusted operating margin would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Consumer Discretionary
Quarter to 2 August 2026, filed 28 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,960
- Revenue, change on a year (%)
- +6.7
- Gross margin (%)
- 51.6
- Operating margin (%)
- 22.9
- Free cash flow, four quarters ($M)
- 1,344
- Price to earnings (×)
- 25.4
- Free-cash-flow yield (%)
- 4.5
All filed numbers
What Williams-Sonoma reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,960 | +6.7 | 51.6 | 22.9 |
| first filed | 1,806 | +4.4 | 43.9 | 16.2 |
| first filed | 2,357 | −4.3 | 46.9 | 20.3 |
| first filed | 1,883 | +4.6 | 46.1 | 17.0 |
| first filed | 1,837 | +2.7 | 47.1 | 17.9 |
| first filed | 1,730 | +4.2 | 44.3 | 16.8 |
| Pre-tax income ($M) | 461 |
| Net income ($M) four quarters: 1,179 | 338 |
| Diluted shares, change on a year (%) against the quarter to 3 August 2025 | −3.8 |
| Operating cash flow ($M) | 1,609 |
| Capital spending ($M) | 266 |
| Free cash flow ($M) | 1,344 |
| Cash and short-term investments ($M) | 1,029 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +7.0% on a year | 619 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 146 |
| Inventory ($M) | 1,447 |
| Shareholders' equity ($M) | 2,141 |
| Market value ($M) | 29,922 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 25.4 |
| Price to book value (×) | 14.0 |
| Free-cash-flow yield (%) | 4.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.6% of shares outstanding sold short, 5.5 days of average trading to cover, +20.8% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $8.7M |
| 12 monthsfrom | $0 | $49.7M |
The thesis
Williams-Sonoma's raised fiscal 2026 outlook still carries the case, and analysts lifted targets again on 12 November 2026. The third-quarter report, expected in the second half of November, decides whether comparable growth and adjusted margin hold once tariff-refund help fades. The company has not confirmed the date; third-party calendars list dates from 18 November to 25 November 2026.
The shares closed at $250.38 on 12 November 2026, after closing at $262.09 on 11 November 2026. The last close is 8.8% below the 52-week intraday high of $274.44 set on 5 November 2026, and the three-month change is 4.0%. News coverage for 12 November 2026 shows analyst target changes but no company announcement that explains the lower close.
On 12 November 2026, UBS kept its Neutral rating and raised its target to $265 from $247, and Gordon Haskett raised its target to $280 from $260, according to analyst rating news. Citigroup ($275) and TD Cowen ($300) had raised targets on 6 November 2026. Williams-Sonoma has reported no new business results since the 26 August 2026 release, so the November report is the test.
Bullish and bearish views on Williams-Sonoma, Inc.
The bull case on Williams-Sonoma, Inc. (WSM), in brief: guidance was raised in August. The bear case: reported profit included refunds.
Bull case
- Guidance was raised in August. The 26 August 2026 second-quarter release lifted fiscal 2026 comparable-growth guidance to 4.0%–6.5% and adjusted operating margin guidance to 17.8%–18.2%. A reaffirmation in November keeps the case intact.
- Growth came from both channels. The 28 August 2026 Form 10-Q reported second-quarter comparable brand revenue growth of 6.2%, with e-commerce up 6.5% and stores up 5.5%. That sits in the upper half of the full-year range.
- Four target raises landed in one week. Citigroup raised to $275 from $252 and TD Cowen set $300 on 6 November 2026. UBS raised to $265 from $247 and Gordon Haskett to $280 from $260 on 12 November 2026. All four targets sit above the last close.
- A home-goods peer reported solid demand. Wayfair's 4 November 2026 release showed third-quarter revenue up 9.7% to $3.4 billion, with US revenue up 11.4% to $3.04 billion.
- Earnings are expected to grow. Barchart's 28 October 2026 preview put the third-quarter consensus at $2.16 per diluted share, up 10.2% from $1.96 a year earlier.
Bear case
- Reported profit included refunds. The Form 10-Q recorded a $167.8 million tariff-refund reduction in second-quarter cost of goods sold. Reported results flatter the recurring margin.
- Another refund reaches the next report. The Form 10-Q said $29.3 million of tariff-refund income deferred in inventory should reduce third-quarter cost of goods sold. Adjusted margin, stripped of that effect, is the number that matters.
- Analysts remain split. Barchart counted 11 Hold ratings among 21 analysts on 28 October 2026, with an average target of $254.95. Evercore ISI cut its target on 28 October 2026, and its target is below the last close.
- Housing turnover remains weak. Mortgage News Daily reported on 16 October 2026 that September existing-home sales ran at a 3.99 million annual rate. Single-family sales fell 1.9% and condominium sales 5.4% from a year earlier.
- Insiders sold into the rally. SEC Form 4 filings show chief executive Laura Alber sold 35,000 shares at an average of $221.20 on 16 September 2026, and director Anne Finucane sold 794 shares at an average of $252.14 on 16 October 2026. Both sales were under Rule 10b5-1 plans, which are scheduled in advance.
Price setup
The shares closed at $250.38 on 12 November 2026, down from $262.09 on 11 November 2026 and from $258.61 on 5 November 2026, the day of the 52-week intraday high of $274.44. The last close is above the 50-day average of $240.80 and the 200-day average of $215.54, both from adjusted daily closes.
The three-month change is 4.0%, from a quoted close of $241.58 on 14 August 2026. The 52-week closing low was $168.64 on 15 May 2026. The 50-day average and the low-$240s closes of early October are the nearest downside reference points; the $274.44 high is the upside reference.
The report concentrates the price risk in one session within roughly two weeks. Recent SEC filings show a director's share grant on 2 November 2026 and the pre-scheduled insider sales above, and no share issuance.
Catalysts ahead
- ~19 November 2026 (est.): Williams-Sonoma third-quarter fiscal 2026 results; third-party calendars list dates from 18 November to 25 November 2026 and the company has not confirmed one. Tests whether the raised comparable-growth and adjusted-margin ranges hold after the tariff-refund effects disclosed in the 28 August 2026 Form 10-Q. Last year's report came on 19 November 2025.
- 20 November 2026: Payment date for the $0.76 per share quarterly dividend. Marks the payout date for the dividend declared on 17 September 2026.
What would change the view
A weekly close below $240, the level of Evercore ISI's price target and just under the 50-day average, which would show buyers giving up the post-August recovery. A cut to fiscal 2026 guidance below 4.0% comparable growth or 17.8% adjusted operating margin would also break the case.
The risks this note tracks, each with what would confirm it:
- Tariff-refund effects hide weaker recurring third-quarter profitability. Confirmed by: the next report lowers fiscal 2026 adjusted operating margin guidance below its 17.8% floor, or third-quarter adjusted margin falls short of the range.
- Analyst optimism reverses after the report, as 11 of 21 covering analysts sit at Hold. Confirmed by: target cuts at Citigroup, TD Cowen, UBS or Gordon Haskett that undo their 6 November 2026 and 12 November 2026 raises.
- Housing turnover stays weak and holds back furnishings demand. Confirmed by: October existing-home sales below September's 3.99 million annual rate, alongside third-quarter comparable growth under the 4.0% guidance floor.
- Freight, fuel and supplier cost increases squeeze retail margins. Confirmed by: Williams-Sonoma citing higher freight or supplier costs as a drag on third-quarter gross margin.
What it trades with
The shares trade with housing turnover and discretionary home spending. Wayfair's quarterly report and the National Association of Realtors existing-home sales figures move the same demand picture. Tariff news affects Williams-Sonoma through cost of goods sold, so trade-policy headlines and refund rulings shift margin expectations across import-heavy furnishings retailers at the same time.
The evidence, claim by claim (8)
- UBS maintained Neutral on Williams-Sonoma and raised its price target to $265 from $247. Analyst rating news, 12 November 2026 · as of
- Gordon Haskett raised its Williams-Sonoma price target to $280 from $260. Analyst rating news, 12 November 2026 · as of
- Citigroup kept Neutral and raised its target to $275 from $252; TD Cowen set a $300 target. Analyst rating news, 6 November 2026 · as of
- Williams-Sonoma raised fiscal 2026 comparable-growth guidance to 4.0%–6.5% and adjusted operating margin guidance to 17.8%–18.2%. Second-quarter fiscal 2026 earnings release · as of
- Second-quarter comparable brand revenue grew 6.2%, with e-commerce up 6.5% and stores up 5.5%; cost of goods sold included a $167.8 million tariff-refund reduction, and $29.3 million more was deferred in inventory. Williams-Sonoma Form 10-Q filed 28 August 2026 · as of
- Third-quarter consensus is $2.16 per diluted share, up 10.2% from $1.96 a year earlier; 21 analysts cover the stock, 11 at Hold, with an average target of $254.95. Barchart earnings preview via Yahoo Finance, 28 October 2026 · as of
- Wayfair's third-quarter net revenue rose 9.7% to $3.4 billion, with US revenue up 11.4% to $3.04 billion. Wayfair Form 8-K earnings release, 4 November 2026 · as of
- Chief executive Laura Alber sold 35,000 shares at an average of $221.20 on 16 September 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 18 September 2026 · as of
Sources
- Williams-Sonoma, Inc. announces strong second quarter 2026 results · ir.williams-sonomainc.com
- Williams-Sonoma Earnings Preview: What to Expect · finance.yahoo.com ·
- Wayfair Inc. - Form 8-K - FY2026 · sec.gov
- Mortgage News Daily ·
- Williams-Sonoma (WSM) Q3 2026 Earnings Date, Time & Estimates · marketbeat.com
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