03:20 PM EDT, 08/14/2025 (MT Newswires) -- Williams-Sonoma's ( WSM ) fiscal second-quarter results are expected to surpass Wall Street's views amid strong transaction data and positive peer read-throughs, RBC Capital Markets said Thursday.

The brokerage now projects the home goods retailer to report adjusted earnings of $1.89 a share for the three-month period, up from $1.81 expected previously and above the Street's $1.77 view. RBC raised its comparable sales growth outlook to 3.6% from 1.2%, also ahead of the Street's model pointing to a gain of 1.9%, the firm said in a note to clients.

The new sales outlook is supported by recent transaction and site traffic data, as well as positive peer read-throughs, RBC analyst Steven Shemesh said. "Early reporters in the space have all posted strong sales accelerations," with two-year stack trends improving sequentially, Shemesh wrote. Williams-Sonoma's ( WSM ) transaction data "further supports this narrative."

In May, the company maintained its full-year outlook despite incremental costs from tariffs, while its first-quarter results came in stronger than expected.

"We think that much of the tariff mitigation costs were one-time in nature and should be significantly lower in (the second quarter)," Shemesh said.

The brokerage raised its price target on the Williams-Sonoma ( WSM ) stock to $212 from $182, with an outperform rating.

The retailer's shares were down 2% in Thursday late-afternoon trade. So far in 2025, the stock is up 11%.

Williams-Sonoma ( WSM ) said in May it continued to anticipate a 1.5% decline to a 1.5% growth in net revenue for fiscal 2025. It guided comparable sales to be flat to up 3% for the year.

A second-quarter print in line with RBC's new outlook would put the company on pace for the high end of its full-year guidance, the brokerage said.

"More favorable rate cut expectations should provide a layer of support to shares, but against high expectations, the focus will likely be on the sustainability of current comp momentum," Shemesh said. RBC expects tariff-led price hikes to become "more widespread" in the second half of the year, according to the note.

Price: 205.84, Change: -4.36, Percent Change: -2.07