Williams-Sonoma Profit Rises, but It Keeps Cautious Outlook

Williams-Sonoma Inc. said Tuesday that its quarterly profit rose nearly 12% on solid sales at its Pottery Barn and Pottery Barn Kids stores, but its shares fell on disappointment that the company maintained its full-year forecast.

The home goods retailer’s fiscal second-quarter profit was slightly better than Wall Street had expected, but San Francisco-based Williams-Sonoma said it was keeping its full-year forecast conservative because the roll-out of new retail brands added uncertainty.

The company’s diffidence about its outlook left some investors wary.

“People are generally concerned with retailers this month, and Williams-Sonoma is not immune to that investor concern,” said Neely Tamminga, a retail analyst at Piper Jaffray & Co.

Last week, Gap Inc. and Abercrombie & Fitch Co. disappointed Wall Street with their forecasts, raising concerns that consumers might be reining in their spending amid rising gas prices and higher interest rates.

Williams-Sonoma’s earnings rose to $30.8 million, or 26 cents a share, in its second quarter ended July 31, from $27.6 million, or 23 cents, a year earlier. Sales were up 12.6% to $776 million.

Wall Street analysts on average forecast earnings of 25 cents a share, according to Reuters Estimates.

The company said it still expected a full-year profit in the range of $1.84 to $1.88 a share. Analysts, on average, expect earnings of $1.88 a share.

Williams-Sonoma said it planned to distribute more catalogs in the second half of the year to support new retail brands including its West Elm furniture and home decor stores.

The company’s shares, down as much as 3.5% in early trading, ended off 44 cents, or 1%, at $40.29. They still are up 15% this year.