Williams‑Sonoma Inc. reported that its net revenue grew 6.7% year over year in its fiscal Q2, even as the housing market remained stubbornly stagnant. Along the way, the home furnishings retailer expanded its lineup of artificial intelligence (AI)-powered shopping tools, including a new assistant, Otto, on the Pottery Barn website.
For the fiscal quarter ended Aug. 2, Williams‑Sonoma’s net revenue reached $1.96 billion, up from $1.84 billion a year earlier. Ecommerce comparable revenue rose 6.5%, slightly ahead of the 5.5% growth across Williams-Sonoma Inc.’s stores, chief financial officer Jeff Howie told investors on the earnings call.
Williams-Sonoma Inc. operates its namesake brand, Williams Sonoma, as well as West Elm, Pottery Barn and Pottery Barn Kids and Teen.
Total comparable brand revenue, which includes ecommerce, established stores and business‑to‑business (B2B) sales, climbed 6.2% in Williams-Sonoma’s Q2. Growth spanned its portfolio, with every brand posting positive results, CEO Laura Alber said. Williams‑Sonoma’s B2B operation and emerging brands were standouts, each delivering double-digit growth.
Those gains came even as the broader home furnishings industry remained largely flat and tariffs weighed on margins, Howie said. During Q2, Williams‑Sonoma also collected roughly $200 million in refunds and interest on tariffs it previously paid.
Williams-Sonoma Inc. is No. 22 in the Top 1000 Database. The market research tool tracks North America’s largest online retailers by their annual ecommerce sales.
Williams-Sonoma’s AI assistants gain traction
As ecommerce growth edged ahead of stores, Williams‑Sonoma detailed how its newest AI assistants are improving the online shopping journey. Alber said the company is using AI to “drive sales, improve service and make our teams more effective.”
Building on last year’s launch of Olive — an AI assistant on the Williams Sonoma site — the retailer introduced Otto earlier this month across its Pottery Barn portfolio. Both assistants recommend products and connect shoppers with the company’s free design services, Alber said.
Williams‑Sonoma has expanded Olive’s capabilities, with results “starting to show,” chief technology and digital officer Sameer Hassan told investors. Since the start of the year, engagement with Olive has increased 700%, while revenue associated with the assistant has risen 620%. Customers who use Olive convert at three times the rate of other shoppers, he added.
Otto is showing similar patterns, Hassan said. Although the rollout is still early, more than 70% of engagements with Otto have been resolved without transferring the customer to an employee.
“Otto will help you narrow down the right piece for your space,” Hassan said. “It will coordinate items that go together, sofa to rug. It works room by room. It knows rug sizing, outdoor materials, the way that our associates do.”
Otto can also book design consultations, he said, or hand customers directly to a Pottery Barn designer.
Hassan noted that Williams‑Sonoma is adding more personalization to its ecommerce sites. A personalized online visit now generates roughly nine times the revenue of an average visit, up from twice the revenue last year.
Beyond customer-facing tools, Williams‑Sonoma is applying AI across supply chain, inventory management, merchandising and corporate operations. Alber noted that while AI cannot replace the “tactile and taste-driven” parts of its business, its operations “can certainly be enhanced by it.”
Williams-Sonoma takes Q2 market share without a housing recovery
During Q2, Williams‑Sonoma gained market share while increasing the share of products sold at full price, Howie said. At 7.6% growth, the Williams Sonoma banner led the company’s major brands. West Elm grew 6.4%, Pottery Barn rose 5.1%, and Pottery Barn Kids and Teen increased 3.5%.
Growth spanned both direct-to-consumer (DTC) and retail. At Pottery Barn, DTC gained traction as Williams‑Sonoma sharpened its focus on product discovery, storytelling and photography, including some AI-generated imagery, Alber said.
During Q2, tariff refunds lifted Williams‑Sonoma’s pretax earnings by roughly $117 million. That comes after accounting for $47.5 million to reimburse vendors that offered tariff-related discounts and a $10 million contribution to employees’ “401(k) accounts for all their work during this difficult time,” Alber said.
The company also raised its fiscal 2026 outlook. It now expects net revenue to grow between 4.7% and 7.2%, compared to a prior 2.7% to 6.7% forecast. Williams‑Sonoma also increased its comparable brand revenue outlook to 4% to 6.5%, up from 2% to 6%. The outlook assumes that current tariffs will remain in place, with no meaningful improvement in interest rates or housing turnover.
“A strong national real estate market with more turnover would certainly be a tailwind for us,” Alber said. “But I believe that we have now proven that our business can succeed regardless of the housing market.”
Williams-Sonoma’s emerging brands and B2B add momentum
Williams-Sonoma’s three emerging brands — Rejuvenation, Mark & Graham and GreenRow — each delivered double-digit comparable growth during Q2. The company did not provide individual percentages.
Rejuvenation posted record results across cabinet hardware, bath and lighting as customer acquisition accelerated, Alber said. Mark & Graham benefited from personalized gifts, wedding products, corporate gifting and its new dorm collection. And GreenRow launched its first New York Botanical Garden collaboration, featuring textiles, decor and furniture “inspired by the archives of this historic garden,” she said.
Williams-Sonoma’s B2B operation, which sells furnishings to commercial clients and design professionals, also grew 14.5% in its largest quarter by volume to date. Major Q2 projects included Virgin Hotels in New York City, Signature Aviation at Miami Executive Airport, and multifamily and restaurant developments across the country, Alber said.
The company is also expanding B2B into what Alber called “underserved but high-growth markets,” including cruise ships, senior living and student housing.
Williams-Sonoma sees a path for B2B revenue to reach $2 billion over the next several years, although it has not provided a specific timeline. Howie also said Rejuvenation could eventually become a $1 billion brand.
The retailer ended Q2 with 508 company-operated stores worldwide. Williams-Sonoma expects that count to remain roughly flat for fiscal 2026 before growing between 1% and 3% each year, starting in fiscal 2027.
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