Williams-Sonoma (NYSE:WSM) reported financial results for the fourth quarter and fiscal year ended February 1, 2026, revealing a resilient top line tempered by significant macroeconomic headwinds.
The home furnishings retailer achieved a 3.2% increase in comparable brand revenue, signaling steady consumer demand across its portfolio, which includes Pottery Barn and West Elm.
Despite the sales growth, profitability faced pressure from multiple fronts.
Gross margin for the quarter landed at 46.9%, a 40-basis-point decline compared to the previous year.
This contraction was primarily driven by a 170-basis-point drop in merchandise margins and an 80-basis-point headwind from occupancy deleverage, with occupancy costs rising 4.9% to $215 million.
These losses were partially mitigated by a 160-basis-point gain from favorable physical inventory results and 50 basis points in supply chain efficiencies.
Operating income for the quarter totaled $478 million, resulting in an operating margin of 20.3%.
This represents a 120-basis-point decrease year-over-year, with management noting that the absence of the extra week present in the 2024 fiscal calendar accounted for half of that decline.