Williams-Sonoma’s Drop Beats Forecasts

Williams-Sonoma Inc. reported a less-than-expected decline in second-quarter profit as it cut costs, and investors drove its stock up nearly 13%. The San Francisco-based retailer, whose chains include Williams-Sonoma, Grand Cuisine and Pottery Barn, said its earnings for the quarter ended July 29 dropped 73% to $1.4 million, or 2 cents a share, from $5.1 million, or 9 cents a share, a year ago. Analysts were expecting a break-even quarter, according to Thomson Financial/First Call.

Williams-Sonoma, like other retailers, is facing slower consumer spending and higher advertising costs.

Revenue rose 17% to $429 million. Sales at stores open at least a year rose 1%, as same-store sales at the Pottery Barn fell more than expected.

The company also said it expects third-quarter earnings of 5 cents to 7 cents a share, lower than Wall Street’ average estimate of 10 cents.

But analysts said Williams-Sonoma is back on its feet and advised against making too much of the forecast since the company had not previously issued estimates for the third quarter.

Shares of Williams-Sonoma rose $3.61 to $32.21 on the NYSE.