Williams-Sonoma Posts Sales Gain

November 14, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2007 Williams-Sonoma, which operates Pottery Barn, saw positive signs in a 5 percent increase in revenues during a difficult third quarter, but officials expressed caution about the holiday shopping season, saying retail traffic has been down in October and the start of November.

Third-quarter net revenues totaled $895.1 million, and net income fell 7.1 percent to $27.1 million, or 25 cents per share. Same-store sales were up an anemic 1.1 percent, with Pottery Barn posting a 0.3 percent increase while Pottery Barn Kids increased 4.5 percent. The retailer operates 597 stores, and its Internet and catalogs accounted for $400.9 million of its sales.

Chairman and CEO Howard Lester said, “The home furnishings environment in the third quarter continued to be very challenging, particularly in the areas of the country where housing-related macro issues have had the greatest impact. Despite these challenges, however, we delivered positive top-line growth in all our brands and diluted earnings per share at the high end of our guidance. We are pleased with these results and believe they reflect what is unique about our business model – the strength of our brands, the power of our multi-channel strategy, and our proven ability to drive our business in difficult economic times.”

He said the company views its fourth quarter with “a heightened sense of caution” due to concerns the troubled housing market is having a greater impact on retail traffic than the company had previously anticipated. He called same-store results in October “disappointing,” even though the company posted an increase while many other retailers saw declines. Still, the company’s fourth-quarter guidance remains unchanged. Sales are expected to range from $1.387 billion to $1.417 billion, but Lester said the results will likely be near the lower end of that range based on lower-than-anticipated traffic in early November.