Profit Increases 58% at Williams-Sonoma
Williams-Sonoma Inc. on Monday reported a 58% jump in profit for its fiscal fourth quarter as the cookware and furniture retailer reduced expenses and boosted sales at its namesake and Pottery Barn stores.
But shares of San Francisco-based Williams-Sonoma fell $2.64, or 5.4%, to $46.40 on the New York Stock Exchange. The shares hit a 52-week high of $49.62 on Thursday.
Some analysts said investors were expecting the company to exceed profit forecasts it made two weeks ago.
“People had expected them to report better than what the company guided,” said Wedbush Morgan Securities analyst Joan Bogucki-Storms, who rates Williams-Sonoma a “buy” and doesn’t own any of the company’s stock.
The retailer said its upscale Pottery Barn chain posted particularly strong results, as shoppers stocked up on holiday items, linens and furniture. It also improved its gross margins through aggressive inventory management, which led to less promotional activity, and lower merchandise and freight costs.
Analysts have said Williams-Sonoma and other home-oriented retailers have benefited from people spending more time at home since the Sept. 11 terrorist attacks, and from a boom in the housing market.
Williams-Sonoma said net income for the quarter ended Feb.3 jumped to $70.4 million, or $1.20 a share, from $44.5 million, or 79 cents, a year earlier. Sales increased 17% to $787.4million.
Results were a penny short of the $1.21 average estimate of analysts polled by Thomson Financial/First Call.
Analysts raised their estimate from $1.16 after Williams-Sonoma said Feb. 25 that earnings in the year just ended would be as much as $1.32 a share.
During the quarter, sales at stores open at least a year rose 7% and 7.3% at Williams-Sonoma and Pottery Barn, respectively, the company said. Pottery Barn Kids same-store sales climbed 13%, the retailer said. Same-store sales at Hold Everything declined 16.7%.
For the current fiscal year, the company said it was keeping its earlier earnings guidance of $1.52 to $1.56 a share, compared with $1.32 for the year just ended.
