The situation: Williams-Sonoma is raising prices on select items after its incremental tariff rate doubled since May—from 14% to 28%—due to higher duties on goods from China, India, and Vietnam. More pressure may be ahead after President Donald Trump recently signaled plans to increase tariffs on furniture imports.

Beyond price increases, the retailer is taking steps to blunt the impact of those duties, including:

• Securing vendor concessions on both existing and new products.
• Resourcing goods for better costs.
• Driving supply chain efficiencies across its network.
• Tightening cost controls and financial discipline.
• Expanding its Made-in-the-USA assortment, production, and partnerships.

Despite tariff headwinds and a stagnant housing market weighing on demand, Williams-Sonoma lifted its full-year revenue guidance following a strong Q2.

The numbers:

• Earnings per share of $2.00, up 19.8% YoY, topping the $1.80 analysts expected.
• Revenues of $1.84 billion, up 2.8% YoY, and ahead of the $1.74 billion analysts expected.
• Comparable sales rose 3.7%, well ahead of the 2.6% analysts predicted.

The company raised its full-year revenue growth guidance to a range of 0.5% to 3.5%, up from its prior guidance range of a 1.5% decline to a 1.5% increase. At the same time, it cautioned that tariff costs could pressure margins even if revenues rise.

AI strategy: AI was central to Williams-Sonoma’s strong performance, said CEO Laura Alber during the company’s earnings call, noting its impact in three areas:

• Customer experience: an AI-powered service assistant launched this summer at Pottery Barn Kids and is now rolling out across all brands.
• Supply chain: AI is improving forecasting, optimizing inventory, and increasing delivery accuracy.
• Internal operations: automation across finance, HR, and tech has boosted productivity, sped up software development, and improved creative output.

AI has had a “very real impact” on results, Alber said, delivering higher conversion, sales growth, and measurable cost savings.