WILLIAMS SONOMA INC (WSM) Stock Analysis
WILLIAMS SONOMA INC (WSM) Stock Analysis
Analysis from 10-Q filed 2025-11-25. Data as of Q1 2026.
Overall Grade: F (Concerning)
WILLIAMS SONOMA INC faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 33.2% | Above industry average |
| FCF Margin | 13.5% | Healthy cash flow |
| Debt/Equity | 0.0x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 33.2% suggests durable competitive advantages and efficient capital allocation.
Explore WILLIAMS SONOMA INC: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: WILLIAMS SONOMA INC earns 33.2% ROIC, Top 5% in Consumer Discretionary
WILLIAMS SONOMA INC's trailing-twelve-month ROIC of 33.2% ranks Top 5% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 13.6% combined with asset turnover of 1.5x. Source: 10-Q filed 2025-11-25. Gross margin of 46.2% with operating margin at 18.1% reflects strong pricing power.
| Metric | WSM | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 33.2% | Excellent | Above sector median of 8.8% |
| Return on Equity (ROE) | 51.3% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 46.2% | Good | Strong pricing power |
| Operating Margin | 18.1% | Good | Efficient operations |
Cash Flow: WILLIAMS SONOMA INC generates $1.1B FCF at 13.5% margin, positive NaN/8 quarters
WILLIAMS SONOMA INC generated $1.1B in free cash flow (TTM), a 13.5% FCF margin, a margin that ranks Top 5% in Consumer Discretionary. Operating cash flow exceeds net income by 1.2x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-25.
| Metric | WSM | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 13.5% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $1.1B | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: WILLIAMS SONOMA INC at 0.0x leverage
WILLIAMS SONOMA INC's debt-to-equity ratio of 0.0x reflects conservative leverage. Source: 10-Q filed 2025-11-25.
| Metric | WSM | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.0x | Excellent | Conservative capital structure |
Valuation: WILLIAMS SONOMA INC trades at 22.8x earnings
WILLIAMS SONOMA INC trades at a P/E of 22.8x. Free cash flow yield of 4.2% reflects market expectations for growth.
| Metric | WSM | Rating | Context |
|---|---|---|---|
| P/E Ratio | 22.8x | Adequate | Premium valuation |
| EV/Sales | 3.1x | Good | Growth premium priced in |
| FCF Yield | 4.2% | Good | Lower cash yield |
| Dividend Yield | 1.3% | Adequate | Growth focus over income |
Capital Allocation: WILLIAMS SONOMA INC returns 4.7% shareholder yield
WILLIAMS SONOMA INC's total shareholder yield is 4.7% (dividends 1.3% + buybacks 3.4%). Source: 10-Q filed 2025-11-25.
| Metric | WSM | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 4.7% | Good | Dividend + buyback yield combined |
| Buyback Yield | 3.4% | Good | Active share repurchases |
| Total Capital Returned (TTM) | $1.2B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 33.2% | Top 5% | 3.8x above |
| Free Cash Flow Margin | 13.5% | Top 5% | 5.0x above |
| Gross Margin | 46.2% | Top 50% | 1.2x above |
| Operating Margin | 18.1% | Top 10% | 3.9x above |
| Return on Equity (ROE) | 51.3% | Top 10% | 4.8x above |
| P/E Ratio | 22.8x | N/A | - |
Financial Scorecard
| Metric | WSM | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 33.2% | Excellent | Top 5% of sector (median: 8.8%) |
| Free Cash Flow Margin | 13.5% | Good | Top 5% of sector (median: 2.7%) |
| Gross Margin | 46.2% | Good | Top 50% of sector (median: 39.5%) |
| Debt to Equity Ratio | 0.0% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 22.8x | Adequate | Fair value |
| Free Cash Flow Yield | 4.2% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is WILLIAMS SONOMA INC's Return on Invested Capital (ROIC)?
WILLIAMS SONOMA INC (WSM) has a trailing twelve-month Return on Invested Capital (ROIC) of 33.2%. This compares above the sector median of 8.8%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is WILLIAMS SONOMA INC's Free Cash Flow Margin?
WILLIAMS SONOMA INC (WSM) has a free cash flow margin of 13.5%, generating $1.1 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is WILLIAMS SONOMA INC stock overvalued or undervalued?
WILLIAMS SONOMA INC (WSM) trades at a P/E ratio of 22.8x, which is above the sector median of N/A. The EV/Sales multiple is 3.1x. Free cash flow yield is 4.2%, which is in line with market averages.
Q: Does WILLIAMS SONOMA INC pay a dividend?
WILLIAMS SONOMA INC (WSM) currently pays a dividend yield of 1.3%. Including share buybacks, the total shareholder yield is 4.7%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is WILLIAMS SONOMA INC's revenue and earnings growth?
WILLIAMS SONOMA INC (WSM) grew revenue by 1.2% year-over-year. Earnings per share increased by 0.6% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is WILLIAMS SONOMA INC buying back stock?
WILLIAMS SONOMA INC (WSM) repurchased $854.0 million of stock over the trailing twelve months. This represents a buyback yield of 3.4%.
Q: How does WILLIAMS SONOMA INC compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, WILLIAMS SONOMA INC (WSM) shows: ROIC of 33.2% is above the sector median of 8.8% (Top 0%). FCF margin of 13.5% exceeds the sector median of 2.7% (Top 2% of sector). Gross margin at 46.2% is 6.6 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with WILLIAMS SONOMA INC?
WILLIAMS SONOMA INC (WSM) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-11-25. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.