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Williams-Sonoma Earnings Rise 22% as Pottery Barn Furniture Sales Climb

Sales increase 12% in the fiscal first quarter. The board also approves a stock repurchase of 2 million shares.

May 25, 2005|From Bloomberg News

Williams-Sonoma Inc. said Tuesday that profit for its fiscal first quarter rose 22%, beating analysts' estimates, on higher sales of furniture at its Pottery Barn chain.

Net income rose to $26.2 million, or 22 cents a share, from $21.4 million, or 18 cents, a year earlier. Sales in the period ended May 1 rose 12% to $720.6 million, the San Francisco-based home-furnishings retailer said.

Williams-Sonoma sped deliveries of back-ordered furniture and began restocking stores daily after shortages hurt holiday sales. The increased sales shifted about 1 cent a share of profit to the first quarter that the company expected in the second quarter, Chief Executive Edward Mueller said.

"They were able to do the sourcing and supply-chain improvements faster," said Amy Ryan, an analyst at ThinkEquity Partners in New York. "They did well in the first quarter. They're being realistic for the balance of the year."

Williams-Sonoma was expected to earn 19 cents a share, the average estimate of analysts surveyed by Thomson First Call.

Williams-Sonoma forecast a rise in second-quarter net income to 24 cents to 26 cents a share from 23 cents a year earlier.

Mueller, 58, said the company remained cautious about the rest of the year because of uncertainty in the economy. The company forecast April 15 that profit this year would rise to as much as $1.88 a share from $1.60 last year. That forecast is unchanged.

Sales were strongest in kitchenware, lighting and furniture, including upholstered furniture, Mueller said on a call with analysts and investors. Furniture accounts for about 27% of sales, the company said.

Catalog and Internet sales increased 12% to $323.5 million, including a 36% gain in online sales. Sales at its stores open at least a year rose 5%, the biggest gain in three quarters.

Comparable-store sales fell less than 1% last quarter at the Williams-Sonoma chain because the company has been offering fewer markdowns to buffer profit. Leftover items are being shipped to outlets, where comparable-store sales jumped 20%.

Same-store sales fell 17% at Hold Everything, the company's shelving and storage retailer.

Williams-Sonoma shares rose 15 cents to $37.87 on the New York Stock Exchange.

Also, the board on Tuesday approved the repurchase of 2 million common shares.

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