Williams-Sonoma Inc. reported better-than-expected second-quarter fiscal 2026 results, with net revenue up 6.7% year over year to $1.96 billion versus a $1.93 billion estimate. Adjusted diluted earnings rose 5% to $2.10 per share, ahead of the $2.08 estimate, while GAAP diluted earnings increased 42% to $2.84 per share. Comparable brand revenue grew 6.2% across all major brands. GAAP gross margin expanded 450 basis points to 51.6%, helped by $167.8 million in International Emergency Economic Powers Act tariff refund income, $6.3 million in related interest, occupancy leverage and supply-chain efficiencies. Adjusted gross margin fell 160 basis points to 45.5%, as tariff costs reduced merchandise margins by 230 basis points. Adjusted operating margin declined 60 basis points to 17.3%, while GAAP operating margin reached 22.9%. The company raised its fiscal 2026 comparable revenue growth forecast to 4% to 6.5%, net revenue growth forecast to 4.7% to 7.2%, sales outlook to $8.17 billion to $8.37 billion and adjusted operating margin guidance to 17.8% to 18.2%. Evercore ISI increased its price target for Williams-Sonoma to $245 following the strong quarter. Williams-Sonoma said the upgraded outlook reflects operating momentum and excludes tariff refunds and related interest. Shares were reported down 4.6% in premarket trading in an earlier update, but later traded up 0.11% at $235.00, according to Benzinga Pro data.