Williams-Sonoma’s Same-Store Sales Flat

Williams-Sonoma Inc. said Tuesday that comparable-store sales during the holiday shopping season were little changed from a year earlier, hurt by results at its Pottery Barn chain.

Total sales rose less than the company expected, climbing 7.3% to $775.9 million in the eight weeks ended Dec. 26, the San Francisco-based retailer said. As with other major retailers, Williams-Sonoma said results were damped by the increased popularity of gift cards, which don’t count as revenue until they’re redeemed.

Williams-Sonoma Chief Executive Ed Mueller said consumers didn’t respond to holiday merchandising at Pottery Barn. On the bright side, he said, higher sales since Christmas and controls on costs will help the company meet its profit forecast for the fourth quarter ending Jan. 30.

Pottery Barn, which sells more linen and bedding than the company’s other chains, “didn’t get the right products in the store,” said JMP Securities analyst Kristine Koerber in San Francisco. “It was a so-so season.”

Shares of Williams-Sonoma, which also has the Pottery Barn Kids and West Elm chains, fell 51 cents to $34.28 on the New York Stock Exchange. They slipped 6% on Nov. 18, their biggest drop in 20 months, after the company cut its forecast for fourth-quarter profit because of a furniture inventory shortage and erratic sales.

Comparable-store sales, or sales at stores open at least a year, rose during the season at every chain except Pottery Barn, which represents a third of Williams-Sonoma’s more than 500 stores.

Catalog and Internet sales at Pottery Barn were also weaker than expected, the company said.

Sales of gift cards had “a significant year-over-year increase,” Williams-Sonoma said without being specific.

The company may have lost sales to customers who refused to wait for delivery of back-ordered furniture, Koerber said. Williams-Sonoma spokespeople did not return telephone calls for comment.

Williams-Sonoma on Tuesday also cut its sales forecast for the quarter while reiterating that net income will rise to 93 cents to 97 cents a share. The company was expected to earn 96 cents a share, the average estimate of 21 analysts surveyed by Thomson First Call.

The company had net income of $102.1 million, or 85 cents a share, in the fourth quarter a year earlier.

Fourth-quarter revenue will rise to $1.08 billion to $1.1 billion, less than the previous forecast of $1.11 billion to $1.13 billion, the company said.

Comparable-store sales will probably rise 0.5% to 1.5%, less than the earlier forecast of 2% to 4%.