Williams-Sonoma Profit Climbs 60%

Williams-Sonoma Inc. on Tuesday said fiscal first-quarter profit climbed 60%, the biggest jump in more than a year, citing more furniture sales at its Pottery Barn chain.

Net income in the quarter ended May 2 rose to $21.4 million, or 18 cents a share, from $13.4 million, or 11 cents, a year earlier, the San Francisco-based company said. Sales, including shipping fees, gained 19% to $640.9 million.

Chief Executive Edward Mueller expanded offerings of leather couches and coffee tables at Pottery Barn and outdoor grills at Williams-Sonoma cookware stores. Catalog and Internet sales gains outpaced stores’ as the company filled orders faster. Mueller also is adding catalogs including Williams-Sonoma Home, to be mailed in the year’s second half, and PBTeen for teenagers.

“Not only are Pottery Barn stores better stocked this year, but the merchandise is being accepted well by consumers,” said Claire Gallacher, an analyst at Caris & Co. in San Francisco. She raised her rating on the company to “buy” from “above average” Tuesday and doesn’t own Williams-Sonoma shares. “Across the brands and distribution channels, the company is well positioned.”

Shares of Williams-Sonoma rose 75 cents to $32.10 on the New York Stock Exchange. They have fallen 7.7% this year.

Sales at stores open at least a year increased 6.8% from a year earlier, led by Pottery Barn’s 10% gain. The company has 520 stores, 33 more than a year earlier, including 241 Williams-Sonoma, 175 Pottery Barn and 81 Pottery Barn Kids locations.

Revenue at the company’s retail stores gained 15%, catalog and Internet sales rose 24%, and shipping fees jumped 28%.

Williams-Sonoma was expected to earn 16 cents a share, the average forecast of 19 analysts surveyed by Thomson First Call. The company in March projected first-quarter revenue of as much as $639 million and a same-store sales increase of 4% to 6%.

Williams-Sonoma said it still expected that second-quarter profit would increase to 18 cents to 20 cents a share as sales rise to $674 million. The average earnings estimate of 18 analysts surveyed by Thomson First Call was 19 cents. The company raised its full-year forecast by 1 cent to a profit of as much as $1.57 a share.

The retailer also said its board authorized the repurchase of as many as 2.5 million shares. It spent $115 million to buy back 4 million shares under a plan completed in February.