Williams-Sonoma Boosts Earnings Forecasts

Williams-Sonoma Inc. on Wednesday more than quadrupled its first-quarter earnings forecast and raised its full-year outlook by more than 10% as consumers spend more on their homes.

The San Francisco-based domestics retailer, which runs the high-end Williams-Sonoma, Pottery Barn and Hold Everything chains, also announced a 2-for-1 split of its common stock. Its shares soared to $53.91, their highest level since December, before closing up $5.49, or 11.6%, at $52.85 on the New York Stock Exchange.

“Sales and gross margins continue to be strong,” Chief Executive Dale Hilpert said. “The consumer response to new merchandise in Pottery Barn has exceeded our expectations.”

He said more sales at full price and fewer markdowns at all of its stores also boosted profit margins.

Williams-Sonoma increased its earnings target for the first quarter to 17 cents to 19 cents a share from a previous range of 3 cents to 4 cents. Analysts polled by Thomson Financial/First Call on average expected 4 cents for the quarter that began Feb. 4. It now sees first-quarter sales at its stores open at least a year rising between 4.5% and 5.5%, from an earlier range of 3.5% to 4.5%.

The company raised its full-year guidance to profit of $1.69 to $1.75, from the prior target of $1.52 to $1.56. The First Call estimate stands at $1.56.

Separately, Williams-Sonoma said it was lowering its previously reported fourth-quarter profit by 1.4%, after accounting changes in the timing for booking catalog sales.

The change, made after an internal review and discussions with the Securities and Exchange Commission, will not affect other quarters, it said.