Williams Sonoma (WSM)

The sleeper story is WSM's retail expansion pivot - they're opening 20 stores after closing 18% of their fleet, betting on 6.4% retail comps vs 2.2% e-commerce growth. Everyone's focused on tariffs, but the real story is this capital allocation shift toward physical footprint. The obvious headline is margin pressure, but they successfully navigated 170bp tariff headwind in Q4 while maintaining 20.3% operating margins. The binding constraint is actually promotional discipline - Pottery Barn's stumble shows the risk when they pull back promotions too aggressively without enough newness. Laura's admission that they 'over-rotated' into decoratives and 'had too much reliance on best sellers from last year' is refreshingly honest. My view changes if the store expansion doesn't generate the comp lift they achieved in repositioned locations, or if they break promotional discipline to chase growth.