Williams Sonoma (NYSE:WSM) posted quarterly earnings ahead of analyst expectations on Wednesday and reported margin strength driven by higher same-store sales and steady demand across its brands. However, shares traded more than 3% lower intra-day.

The retailer reported third-quarter EPS of $1.96, surpassing consensus estimates of $1.87. Revenue increased to $1.88 billion, slightly ahead of forecasts of $1.86 billion. Comparable brand revenue rose 4%, marking another quarter of broad-based improvement across all banners.

Williams Sonoma reaffirmed its fiscal 2025 net revenue growth forecast of 0.5% to 3.5% and raised its operating margin outlook to 17.8% to 18.1%. The company noted that the updated guidance accounted for newly implemented tariffs, including higher duties on imports from China, India, and Vietnam, as well as additional steel, aluminum, and copper tariffs.

For fiscal 2025, the company projected approximately $35 million in interest income and an effective tax rate of about 26%.