Retailer Posts 6% Profit Gain

Home furnishing retailer Williams-Sonoma Inc., which owns the Pottery Barn and West Elm brands, said Monday that its fiscal fourth-quarter profit rose 6% and initiated its first quarterly cash dividend.

The company also said it expected double-digit revenue growth to drive its profit well above Wall Street estimates in the coming year. Its shares fell 18 cents to $42.28.

Net income grew to $120.8 million, or $1.02 a share, in the three months ended Jan. 29 from $113.7 million, or 95 cents, a year earlier. Excluding a charge for its consolidation of the Hold Everything brand, the San Francisco-based company reported per-share earnings of $1.09.

Revenue rose 12% to $1.21 billion from $1.08 billion last year.

Analysts surveyed by Thomson Financial expected per-share earnings of $1.09 on revenue of $1.22 billion.

The company declared a quarterly dividend of 10 cents, payable May 24 to shareholders of record as of April 26. Williams-Sonoma also will buy back as many as 2 million shares of its stock. The company has about 115.4 million shares outstanding.

The company said fiscal 2006 earnings, including accounting changes and a charge to consolidate the Hold Everything brand, were expected to range from $1.90 to $1.94 a share, up 5% to 7% from 2005.

Excluding the charges, earnings per share are expected at $2.15 to $2.19, an increase of 14% to 17%. Analysts expect Williams-Sonoma to earn $1.98 per share for the year, according to a Thomson Financial survey.

Revenue is expected to be $3.9 billion to $3.97 billion, up 10% to 12% from 2005. Analysts forecast $3.98 billion in revenue.

Same-store sales growth -- an important measure of growth at stores open at least one year -- is projected to range from 3% to 5%, compared with 2005 same-store sales growth of 4.9%.

Direct-to-customer revenue, which includes catalog and Internet sales, is projected at $1.67 billion to $1.71 billion, an increase of 11% to 13% versus 2005.