Williams-Sonoma Reaffirms Forecasts

Williams-Sonoma Inc. said Wednesday that its third-quarter and 2001 earnings should match forecasts, even though it expects a sales shortfall after the Sept. 11 terrorist attacks.

Shares of the San Francisco-based company climbed $4.85, or 22%, on the announcement to $27.05 in New York Stock Exchange trading. Year-to-date the company’s stock has risen by about 31%, versus a 5% drop in the Standard & Poor’s index of retailers.

Williams-Sonoma, which operates Pottery Barn and Hold Everything stores as well as its namesake upscale housewares chain, said it has implemented cost-reduction measures such as trimming catalog circulation in response to the uncertainty caused by the attacks in New York and Washington.

The company said it expects to meet its third-quarter earnings guidance of 5 to 7 cents a share. It did not provide fourth-quarter guidance.

The consensus forecast of analysts polled by Thomson Financial/First Call is 5 cents for the third quarter and $1.07 for the fourth quarter.

For the full year, Williams-Sonoma said it remains committed to its earlier guidance of $1.17 to $1.24 a share. Analysts on average had forecast $1.15 for the year.

The company cut its revenue outlook for the third quarter to a range of $460 million to $470 million, from $478 million to $492 million. For the year, it forecast revenue of $2.065 billion to $2.08 billion in 2001, down from previous guidance of $2.115 billion to $2.145 billion.

Williams-Sonoma said growth in sales at stores open at least a year has returned to positive low single digits in recent days, but it was cautious on the outlook.

Another high-end retailer, Tiffany & Co., on Wednesday cut its profit forecasts for the rest of fiscal 2001, citing slower sales because of the attacks and a weak economy.

Still, Tiffany’s shares jumped $2.82, or 14%, to $23.58, in NYSE trading on relief that its earnings might surpass the low end of Wall Street forecasts.

The jewelry retailer now expects profit of 12 to 15 cents a share in its third quarter, down from the 22 to 24 cents it forecast in August, with sales down about 10%. For the fourth quarter, it forecast earnings of 49 to 56 cents, down from earlier guidance of 60 to 65 cents.

Analysts polled by First Call had, on average, expected Tiffany to earn 19 cents in the third quarter and 55 cents in the fourth.

Tiffany said sales at stores open at least a year declined 19% in the August-September period, including a 36% drop since Sept. 11.