Williams-Sonoma (WSM) Stock Forecast & Price Target

Williams-Sonoma demonstrated a solid financial performance with total sales increasing by 4.6% year-over-year, reaching $1.88 billion, indicative of robust demand across its diverse brand portfolio. The company achieved an expanded operating margin of 17.0%, outperforming key competitors, which signifies effective cost management and operational efficiency amidst rising SG&A expenses due to reinvestment in marketing and incentives. Additionally, the business-to-business segment showed notable growth, with a 9% increase in sales projected to generate $1 billion in 2024, highlighting the company's strategic focus on expanding into lucrative markets.

Williams-Sonoma is facing challenges due to increased inventory costs, with $48 million attributed to higher tariffs and a reduction in inventory-pullforward benefits, leading to concerns about the potential impact of tariffs on profitability. Despite a beat in 3Q25 earnings and an increase in operating margin guidance, the stock price declined, reflecting investor uncertainty in the broader macroeconomic environment and the home furnishings sector normalization following the pandemic. Additionally, the lowered earnings per share estimate for 2026, along with concerns about consumer spending shifts away from home goods towards services and entertainment, further contribute to a negative outlook for Williams-Sonoma's stock.